Option Buy Recomendations

[ghosh_ak34]

Dear Mr Ghosh

As I could understand from the first post, the sideways strategy look very much similar. Except that in the case of sideways strategy, the prices are taken at 10:30-10:45 AM and 03:00-03:15PM only where as in normal strategy, Price check is done at 9.30-9.45, 11.30, and 03.30 (or at convenient intervals). However, in various posts earlier, when other members displayed thier daily results, even during side ways strategy, price is checked and positions entered at 10.30-10.45 and at 11.30 (12.30 earlier) also. Will you please clarify?
regards

Dear Ghosh,

I have the following doubts also

1. In view of change in timings, whether we can check trend at 9.30-9.45, 11.30, 1.30 and 3.00 (2 Hrs interval) or only at 9.30-9.45 , 12.30 and 3.00 PM?

2. Whether the idea is to enter when there is 20 points up or down from the previous time check or this can be done only at the defenit time interval mentioned? For example, if 9.30-9.45, price is within 20 points from opening but at 10.00 it goes above 20 points. Whether as per strategy we can enter at 10.00 PM or we have to wait and check the position at next stage (12.30)

3. Yesterday exactly at 9.45 it was above 20 points (4760)and reversed immediately. at 10.30 again it was down beyond 20 points (4738). As per strategy we would have entered at 9.45 (4700 call at 140.00). Now whether we can enter again at 10.30 (4900 put at 217.00). If we check again at 12.30 nifty spot is 4685 more than 20 points down.(so we have to buy 4900 put at 258). But at 01.00 PM again nifty is higher beyond 20 points from 12.30 price. (4711) .Whether we can buy call again at 01.00?
Please kindly clarify.

Dear Gkn,

In sideways strategy as well the time starts at 9:05 followed by 9:30-9:45, 10:00, 10:30, 12:30 AM etc, I have updated in the begining of the 1st post of this thread that as per new timings time for entry starts at 9:05.

In sideways we buy equal no. of call or put as per strategy i.e. R1-S1 is outside 300,400 range.

In nomal strategy i.e R1 - S1 is between 300,400 then, we buy atleast 2 calls if trend is up by 20 pts as per trend check or buy atleast 2 puts if trend is down by 20pts as per trend check strategy.

One can have there own time frames, I reco. this as I tested using the rec. time frames.

Dear Ghosh,
I have also certain queries.
1. Whether we need to enter into fresh trade only on Monday and that too at early morning. If we miss to enter on Monday, can we enter on any other day of the wek since the R1 and S1 is valid for the entire week.

2. What is the difference in the strategy if R1 - S1 is between 300 and 400 and if r1 - s1 is not between 300 and 400, as stated in your first post?

regards
Sujit Talukder

Dear Sujit,

One can enter any day fresh. We reco. to square off our positions by day end or carry till next day with hedge. As per this strategy we square off all positins by Friday EOD and start fresh on next Monday as per new R1 and S1.

Regards

 

[ghosh_ak34]

Dear Friends,

For Nifty Future traders who would like to trade as per trend check strategy posted in 1st post of the thread, Nifty levels for tomorrow are as under:

Resistence at 4845
Support at 4735

If you go short 1 lot then, buy 1 lot at money or near money call and if you go long 1 lot then, buy 1 lot at money or near money put to hedge. Reco. to trade as per trend check strategy posted in 1st post of this thread.

Regards

 

[ghosh_ak34]

Dear Friends,

For Nifty Future traders who would like to trade as per trend check strategy posted in 1st post of the thread, Nifty levels for tomorrow are as under:

Resistence at 4810
Support at 4682

If you go short 1 lot then, buy 1 lot at money or near money call and if you go long 1 lot then, buy 1 lot at money or near money put to hedge. Reco. to trade as per trend check strategy posted in 1st post of this thread.

Regards

 

[Gkn]

For week starting 15.02.10
H - 4844
L - 4675
C - 4827
P = 4782
R1 = 4889 (4900 strike price for option buying)
S1 = 4720 (4700 strike price for option buying)
Narrow range, sideways strategy

 

[Gkn]

Dear Ghosh
I went through all the pages
Still some more doubts. Pl be kind enough to clarify.

1. As per Ist post, the stop loss is 20-30% and target 40-50%. On P/189, you have explained as below:-

"You need to trade as per trend, buy calls at S1 when Nifty is up 20pts at 10:30 AM from the opening price at 10:00AM and use trailing SL =10% from CMP and hold. If Nifty goes down by 20pts by 12:30PM w.r.t. price at 10:30 AM, then obviously the trailing SL of call bought at 10:30 will get hit so exit from it and buy puts at S1 and hold with trailing SL=10% from CMP. And again if at 3:00 PM / 3:15 PM not 3:30PM. the price is up 20pts, then you can either buy calls at S1 to hedge your position or exit from the previous put bought at 12:30PM. Its reco. not to hold any naked options. Always hedge it before you call it a day."

- At what stage we apply trailing stop loss rather than actual stop loss? When the price reach target or as and when price increases? For example we bought call at 10.30 for Rs 100 as per trend. But thereafter if price goes on declining, then it should be covered at Rs 70 (30 % stop loss). but If by 12.00 PM the call price had gone to 125 and at 12.30 PM Nifty is down by 20 points from 10.30 and the call is priced at 115 then we should keep SL at 112.5 (10 % from high) or 95 (30 from buy price)?.

2. Suppose we bought call at 10.30 AM and put at 12.30 PM as per trend check. If by 3.00 PM call hits SL but put is up by only 15 %. Then we have to close both the position for the day in loss? Because having SL hit in the call and closed the position, it seems there is no point in buying another lot for hedging.

 

[ghosh_ak34]

Dear Ghosh
I went through all the pages
Still some more doubts. Pl be kind enough to clarify.

1. As per Ist post, the stop loss is 20-30% and target 40-50%. On P/189, you have explained as below:-

"You need to trade as per trend, buy calls at S1 when Nifty is up 20pts at 10:30 AM from the opening price at 10:00AM and use trailing SL =10% from CMP and hold. If Nifty goes down by 20pts by 12:30PM w.r.t. price at 10:30 AM, then obviously the trailing SL of call bought at 10:30 will get hit so exit from it and buy puts at S1 and hold with trailing SL=10% from CMP. And again if at 3:00 PM / 3:15 PM not 3:30PM. the price is up 20pts, then you can either buy calls at S1 to hedge your position or exit from the previous put bought at 12:30PM. Its reco. not to hold any naked options. Always hedge it before you call it a day."

- At what stage we apply trailing stop loss rather than actual stop loss? When the price reach target or as and when price increases? For example we bought call at 10.30 for Rs 100 as per trend. But thereafter if price goes on declining, then it should be covered at Rs 70 (30 % stop loss). but If by 12.00 PM the call price had gone to 125 and at 12.30 PM Nifty is down by 20 points from 10.30 and the call is priced at 115 then we should keep SL at 112.5 (10 % from high) or 95 (30 from buy price)?.

2. Suppose we bought call at 10.30 AM and put at 12.30 PM as per trend check. If by 3.00 PM call hits SL but put is up by only 15 %. Then we have to close both the position for the day in loss? Because having SL hit in the call and closed the position, it seems there is no point in buying another lot for hedging.

Dear Gkn,

Will reco. to use trailing SL after you have acheived the target price so as to maximize the profit. Trailing SL is calculated from CMP. Will not reco. to adjust our SL (i.e 30% of our buy price)

We hedge only when we want to go for next day and as per our risk appetite.

Even if call hits SL at around 3:00 PM while puts is gainng then, if I decide to go for next day then, will add one more put and will not square off the loss making call by EOD. Normally, the previous days sharp trend by EOD continues next day on opening so would like to capitalize the same.

Regards

 

[ghosh_ak34]

Dear Friends,

For Nifty Future traders who would like to trade as per trend check strategy posted in 1st post of the thread, Nifty levels for tomorrow are as under:

Resistence at 4810
Support at 4682

If you go short 1 lot then, buy 1 lot at money or near money call and if you go long 1 lot then, buy 1 lot at money or near money put to hedge. Reco. to trade as per trend check strategy posted in 1st post of this thread.

Regards

 

[Gkn]

Dear Ghosh,

Thank you very much for your prompt replies.

Sorry for repeated doubts. But even after repeated reading Im still confused as below:-

In Ist post in sideways strategy you have told " If Nifty opens gap up and remain 20 Pts till 10.30AM buy calls at S1"

But in some other posts you have told the difference between sideways and normal strategy is only in No. of calls / put to be bought as per long term trend.

The above two posts seem confusing. As such will you please tell me what should be the action as per your strategy in the following situations?

1. Previous close - 4600, Opening price at 9.05 - 4640 Price at 10.30 - 4645 (opens gap up and remain above 20 points till 10.30 satisfy sideways strategy 1st para but 4645 - 4640 = <20 does not satisfy normal strategy condition for buy call)

1. previous close - 4600, Opening price at 9.05 - 4700, Price at 10.30 - 4675 (Opens gap up 100 points and settles at 75 points. Whether this to be considered as uptrend or down trend?). As per Ist post if opens gap up 100 pts and settles at 20 pts is down trend so if settles at 75 from 100 is up trend or down trend? As per normal strategy it is down trend because 4700-4675 = >20 pts.

Please clarify

 

[ghosh_ak34]

Dear Ghosh,
....
what should be the action as per your strategy in the following situations?
[/B]
1. Previous close - 4600, Opening price at 9.05 - 4640 Price at 10.30 - 4645 (opens gap up and remain above 20 points till 10.30 satisfy sideways strategy 1st para but 4645 - 4640 = <20 does not satisfy normal strategy condition for buy call)

1. previous close - 4600, Opening price at 9.05 - 4700, Price at 10.30 - 4675 (Opens gap up 100 points and settles at 75 points. Whether this to be considered as uptrend or down trend?). As per Ist post if opens gap up 100 pts and settles at 20 pts is down trend so if settles at 75 from 100 is up trend or down trend? As per normal strategy it is down trend because 4700-4675 = >20 pts.

Please clarify

Dear Gkn,

Previous days Nifty close we don't count as per stated strategy. We check price at 9:05 AN and then, at 9:30 AM / 9:45AM then, 10:30 AM etc

4675 < 4700 (CMP - open price or previous interval price) so what does it mean => down trend. Diff. is > - 20 pts

Have told earlier, that strategy for normal is when R1-S1 is between 300,400 and sideways when R1-S1 is out side 300,400 range.

And we trade the week starting Mon-Fri. using the identified strategy.

In sideways we trade with equal no. of call/puts.

In normal we trade with unequal no. of calls/puts.

If trend is bullish then, we buy more calls i.e. atleast 2 calls and less put(s) and vice versa.

How to know that trend is up: If Nifty trend remains up for atleast 14 days then, trend is up or we can say ADX=14, W %14 or any other indicator confirms an up trend.

Down trend, reverse of the above.

Regards

 

[ghosh_ak34]

Dear Friends,

For Nifty Future traders who would like to trade as per trend check strategy posted in 1st post of the thread, Nifty levels for tomorrow are as under:

Resistence at 4833
Support at 4776

If you go short 1 lot then, buy 1 lot at money or near money call and if you go long 1 lot then, buy 1 lot at money or near money put to hedge. Reco. to trade as per trend check strategy posted in 1st post of this thread.

Regards