Option Buy Recomendations

[ravalsb]

Dear Ghosh,

What are your views on TATAPOWER. Have seen reasonable amount of OI build up in call options for august series.

Regards

 

[praveen taneja]

Dear Anil,

Your strategy will result in profit when Nifty moves down. So, hold Nifty 4100 put with SL= 50 max. and square off MiniNifty whenever you get an oppourtunity. This strategy is good in bearish market not in sideways market.

Buy calls and puts are per strategy stated below:

If Nifty opens with gap up and remain above 20pts till 10:30AM - 10:45 AM buy calls at S1 with SL 20-30% from your buy price. Book profit if your target is achieved or buy puts at R1 around 3:00 PM-3:15 PM and hold call with a trailing SL of say 10%.

If Nifty opens with gap down and remain below 20pts till 10:30AM - 10:45 AM buy puts at R1 with SL 20-30% from your buy price. Book profit if your target is achieved or buy calls at R1 around 3:00 PM-3:15 PM and and hold put with a trailing SL of say 10%.

Vary calls and puts nos. according to the trend.

Regards

sir can u make it lil bit more clear that in the event of gap up n remain above 20 points till 10.30-10.45 buy calls wat u mean by it.is it that at watever rate mkt open like if on monday if nifty open at 4475 so v should wait for 4495 n wait till 10.30-10.45 n then v should buy a call on frst sppt n at 3.00pm we buy a put at R1 for hedging wat if then rate is somewhere between S1 n R1 or at S1 pls make it clear i m confuse on it thnx n forgive me for my ignorance god bless u alll

 

[ghosh_ak34]

sir can u make it lil bit more clear that in the event of gap up n remain above 20 points till 10.30-10.45 buy calls wat u mean by it.is it that at watever rate mkt open like if on monday if nifty open at 4475 so v should wait for 4495 n wait till 10.30-10.45 n then v should buy a call on frst sppt n at 3.00pm we buy a put at R1 for hedging wat if then rate is somewhere between S1 n R1 or at S1 pls make it clear i m confuse on it thnx n forgive me for my ignorance god bless u alll

Dear Praveen Taneja,

When market opens gap up or down by 20pts then, we need to wait till 10:30-10:45AM for it to remain up or down by 20pts. Normally, Nifty stabilizes around 10:30 AM-10:45 AM and shows some direction either up or down. Then, depending on 20pts up or down buy a call at S1 or put at R1 with SL=30% from your buy price and hold it till your target is met or hold it with trailing SL = 10% (max) till 3:00 PM-3:15 PM and square off your position. Suppose you do not want to square off then, at 3:00 PM-3:15 PM buy put at R1 or and call at S1 to hedge your position so as to minimize your risk from gap down or gap up opening the next day. There is no need to worry about the nifty levels before you buy these options.

I hope this helps.

Regards

 

[ghosh_ak34]

Dear Ghosh,

What are your views on TATAPOWER. Have seen reasonable amount of OI build up in call options for august series.

Regards

Dear Ravalsb,

Tata power looks okay on charts. But I will not recommend an entry atleast at this point.

Regards

 

[jace48]

Dear Praveen Taneja,

Normally, Nifty stabilizes around 10:30 AM-10:45 AM and shows some direction either up or down. Then, depending on 20pts up or down buy a call at S1 or put at R1 with SL=30% from your buy price

Dear ghosh_ak34,

Is S1 R1 on strict basis or every rally upwards to be treated as R1 and every downward to be treated as S1?

Thanks..!

 

[ghosh_ak34]

Dear ghosh_ak34,

Is S1 R1 on strict basis or every rally upwards to be treated as R1 and every downward to be treated as S1?

Thanks..!

Dear Jace48,

As stated earlier, these R1, S1 are weekly levels.

Regards

 

[jace48]

Dear Jace48,

As stated earlier, these R1, S1 are weekly levels.

Regards

So does that mean it's not necessary to trade daily but in the entire week whenever we reach our R1 or S1 level in coming week?

If my understanding is correct we can take position close to R1 or S1 level as well, say 20 or 30 points close to it since it is not necessary nifty may hit our levels.

Thanks...!

 

[ghosh_ak34]

So does that mean it's not necessary to trade daily but in the entire week whenever we reach our R1 or S1 level in coming week?

If my understanding is correct we can take position close to R1 or S1 level as well, say 20 or 30 points close to it since it is not necessary nifty may hit our levels.

Thanks...!

Dear Jace46,

Yes, its not necessary to trade daily. Whenever nifty trades up with 20 or more points buy call at S1 and whenever nifty trades down with 20 or more pts buy put at R1. Do not enter into trade before 10:45 AM and do not carry any open position home , always hedge your position before you call it a day so as to avoid any risk arising out of Nifty gap up or gap down opening.

Always maintain a strict SL=20-30% from your buy price. Have a target = 40-50% from your buy price and square off when your profit is met or hold your profit making position with a trailing SL=10% (max).

Hope this helps.

Regards

 

[balaj78]

sir,
This is raj from chennai . i have a dou't in options .
for eg nifty is at 4430 . i bought a call option 4300 call at rs 157.
if at the expiry nifty was at 4550 the price of the call option would be
(4550 - 4300) = 250. suppose i forget to close the open position it will be automatically
exercised by the exchange or i have to inform the broker to excersice the contract . what will happen when i din't close the position .

 

[skarpio]

if at the expiry nifty was at 4550 the price of the call option would be (4550 - 4300) = 250. suppose i forget to close the open position it will be automatically
exercised by the exchange or i have to inform the broker to excersice the contract . what will happen when i din't close the position .

No. Read up on option greeks that tell you how to calculate option prices. Its not just a simple difference.

Index options get closed at expiry i.e. they are squared off. Read up on the difference between exercise and square off. The former doesn't really happen here in India though.