Option Buy Recomendations

[awachat]

Hi Ghosh Sir,

I have gone through your provided update under this thread which helps me to understand Option trading.

I am also new in Option trading till last week I was investing money in Equity/ Mutual Fund for long term investment. Now I want to try Option trading. In fact I have taken PUT call for Nifty 4200 on Friday and got some profit as well. I am downloading every days NSE data and inserting in MS access database and using query option crating some reports which are providing information about Put/Call ration or variation in volumes and OI. Using this I can fan-out which contract volume are started decreasing and incising.

If you guide me more then we can build system which well help us to find profit making scripts which will help us everyone.

 

[ghosh_ak34]

Sir,
thank you for the informative thread.I have a query,what happens if i buy one lot of nifty in the morning and sell in the evening for profit/loss,am i liable to providing delivery of underlng security at the end of the month.
thank you

Dear learn2trade08,

No you are not liable to buy the stock. To learn refer 888option dot com

Regards

 

[awachat]

Hi Anupam

I am downloading options EOD from nseindia where I am getting full detail information of each transaction which happen on NSE.

This EOD file is available for everyone. You can visit nseindia website go to F&O tab > Market information > Market today > Bhavcopy download > Download file in CSV format

You can open this file in MS excel or notepad. I feel its more useful if you open in excel then you can use excel filter option and filet required data.

Same file I am inserting in ms access and crating querys using day or volume or OI same you can do with excel but when you want to filter more then 7 days data then you will required some database.


Let me know any more querys if you have or any suggestions

 

[awachat]

Hi All,

At starting I am doing this trading only for learning and understanding options.

I am new in option trading. Yesterday bye contract of OPT-NIFTY -31-Jul-2008-4000-PE @ 145 and sold at 194 Quantity was 50. Nifty Initial Margin was 14 %


I want to know how to calculate and what is the best way to get more profit:-

1) Initial margin I have to pay 14 % of 145 which is = 20.30 quantity was 50 so total will be 1015. My calculation is right? Do I need to pay margin while selling also?

2) So profit calculation will be

(Sell order * Qty) – (Buy order * Qty) = Initial profit, Initial profit – Margin 14% - Brokerage = Actual profit.

(194*50) – (145*50) = 2450, 2450 – 1015 – 350 = 1085

Is that Right?

In given scenario I have transfer the contract to another person where I got minimum profit. There is any another way to get more profit?

Please help me

 

[awachat]

Dear learn2trade08,

No you are not liable to buy the stock. To learn refer 888option dot com

Regards

Hi Ghosh Sir,

I have visited 888 option web site but its little difficult to understand terms as I am not having financial or accounting background. So I have posted some queries in this thread I hope you will not mind.

 

[nitu20]

Dear Optiontrader,

R1~S1 > 300 but its less than 400. So, we can still buy calls for next month at S1 (4200/4250) and puts at R1 (4500/4550). Market is currently bearish so you need to buy more puts than calls. Ratio could be 2 puts to 1 call atleast.

Do not buy options for the month of June as its already nearing expiry.

Regards

Dear Ghosh Sir,
I have some queries regarding your formula for buying call and put options.
1. As you have told earlier that R1-S1 > 300 but lesser than 400. So it means that we should only buy Call and put option if R1-S1 is between 300 and 400.
2. For the week calculation we should take only data between Monday to Friday or we can take any last five day data and trade.

Waiting eagerly for your prompt reply.
Priyank

 

[ghosh_ak34]

Dear Ghosh Sir,
I have some queries regarding your formula for buying call and put options.
1. As you have told earlier that R1-S1 > 300 but lesser than 400. So it means that we should only buy Call and put option if R1-S1 is between 300 and 400.
2. For the week calculation we should take only data between Monday to Friday or we can take any last five day data and trade.

Waiting eagerly for your prompt reply.
Priyank

Dear Priyank,

Below are the answers to your queries:
1. Yes. If R1~S1 is outside 300-400 range avoid trading in options as per the strategy stated above.
2. Have taken Week as Monday to Friday. Have tested with this and would recommend the same.

Regards

 

[optionstrader]

Hi Ghosh Sir,

I was out of station from some time.
Just returned. I could not calculate the R1 & S1 for this week.

Sir, did you calculate it? If yes, could you please guide us ?

Sir, i was thinking of another strategy, kindly guide me if i am wrong,
and also kindly give you suggestions.


Actually i was thinking, that if we purchase a put of Nifty ,
and trade the nifty futures, long for at least 50-70 points, and then exit,
and leave the put just to waste for the whole month.

Then again we buy nifty at lower levels and again sell at 50-70 points,
do you think this would work ?

If yes, then at what strike price shall the put be purchased ?

For example, if nifty spot is at 4000 and nifty future at a discount of 50 points,
say at 3550, then which strike price put shall be purchased ?

And also, since we hold the put, and nifty futures come down, what should we do,
exit the nifty future at a stop loss of 100 points, since it has a support at 100 points,
and enter at lower levels, or shall we go short on nifty futures, still keeping the put intact ?

Ghosh sir,
can we do it with stock futures also, like RPL, Reliance etc.
Kindly guide with the strategy with minimum loss, as i understand that in this market,
there is no 100% profit making strategy, but kindly guide for the one,
in which we can minimize the loss.

Kindly guide us and also give your suggestions.


Awaiting your quickest response,

Thanks & Regards,
Optionstrader

 

[ghosh_ak34]

Hi Ghosh Sir,

I was out of station from some time.
Just returned. I could not calculate the R1 & S1 for this week.

Sir, did you calculate it? If yes, could you please guide us ?

Sir, i was thinking of another strategy, kindly guide me if i am wrong,
and also kindly give you suggestions.


Actually i was thinking, that if we purchase a put of Nifty ,
and trade the nifty futures, long for at least 50-70 points, and then exit,
and leave the put just to waste for the whole month.

Then again we buy nifty at lower levels and again sell at 50-70 points,
do you think this would work ?

If yes, then at what strike price shall the put be purchased ?

For example, if nifty spot is at 4000 and nifty future at a discount of 50 points,
say at 3550, then which strike price put shall be purchased ?

And also, since we hold the put, and nifty futures come down, what should we do,
exit the nifty future at a stop loss of 100 points, since it has a support at 100 points,
and enter at lower levels, or shall we go short on nifty futures, still keeping the put intact ?

Ghosh sir,
can we do it with stock futures also, like RPL, Reliance etc.
Kindly guide with the strategy with minimum loss, as i understand that in this market,
there is no 100% profit making strategy, but kindly guide for the one,
in which we can minimize the loss.

Kindly guide us and also give your suggestions.


Awaiting your quickest response,

Thanks & Regards,
Optionstrader

Dear Optiontrader,

R1~S1 < 300, for the current week. So, would not recommend any trade this week.

Regarding your strategy, yes, you can do that with the R1 & S1 calculation as per stated strategy. Go long in Nifty futures at S1 and buy put at R1, only when R1~S1 >=300 and =<400. Future trading and writing options is risky so, I generally avoid it. It depends on your risk appetite. But remember - trend is our friend so your ratio (no. of lots of Nifty future Buy : no. of lots of Nifty put buy) should favour the trend only, for success.

The above strategy is for Nifty only and not for stocks.

Regards

 

[optionstrader]

Hi Ghosh Sir,

Thank you so much.

That means, i should go for long futures, only when the R1~S1 > 300 and buy R1 put.

Sir kindly guide, if R1~S1 < 300, shall i go opposite,
that means buy a call at S1 & go short on Nifty Futures, or shall i do not trade at all ?

Kindly also guide , since futures are risky , should i go for this strategy or would the
strategy that we are using of R1 & S1 to trade only in options would be ok ?

Kindly guide, as i am totally confused.

Awaiting your response,


Thanks & Regards,
Optionstrader