Option Buy Recomendations

[vasanth_ece]

Dear Kaushik,

Ans 1: Yes, we will keep checking the trends at 10:30-10:45 AM, 12:30 PM and 3:00 PM, we should maintain our SL=30% from our buy price. If you are not comfortable at any point then, better do not trade.

Ans 2: Trailing SL = 10% of CMP. In this case it will be 540 where CMP= 600 and buy price = 500.

Regards

Hi Ghosh,

When we need to put Trailing Stop loss,after 40% profit or before?In the above example Trailing stop loss is put at 25% profit itself.

Plz advice.

Reg
Vasanth

 

[ghosh_ak34]

Hi Ghosh,

I am having difficulty in Setting targets for Option premiums..2 times i Squared off positions too early

What factors we need to consider when Setting targets as it difficult to Hold on profits unlike Stocks..

Currently i hold 2 positions 1 Nov PUT 3100 @ 130 & Nov CALL 3400 @ 120...(i bought call this on friday evening after Squaring off my 3100 Oct PUT @179 ,bought at 90, as you always mentions not to Hold @ EOD any positions without hedging)

Thanks & regards
Kumar

Dear Kumar,

This is a common problem among traders. Firstly let me state the rules:

1- Your SL % should always be less than Target %, means if you are maintaining SL=30% then, Target >30% e.g. 40%
2- If you are not maintaining the above then, your SL should be less than average monthly profit or last profit per lot earned by you. Means if your average monthly profit or last profit per lot is Rs 5000 then, your SL should be less then, Rs 5000 atleast Rs 3000.

Our 1st motive should be to save our hard earned money 1st. See now a days Nifty is very choppy and so traders are mostly scared so they square off their positions quickly. Well what I suggest is, its time to follow rule no.2.

The moment you are in profit keep a trailing SL=10% from CMP. E.g. suppose you bought the call at 80 and it went to 110 so your trailing SL= 110-11=99 and suppose the CMP increases to 150 then, increase trailing SL=150-15=135. You did the correct thing by hedging your position and buying Nov. series.

I hope above helps.

Regards

 

[ghosh_ak34]

Hi Ghosh,

When we need to put Trailing Stop loss,after 40% profit or before?In the above example Trailing stop loss is put at 25% profit itself.

Plz advice.

Reg
Vasanth

Dear Vasanth,

Keep min. of 25% as target then, keep trailing SL. As now a days market is choppy. Read the previous post for the SL/target rules.

Regards

 

[nagendra_gb]

Hi Ghosh sir,
Am planning to enter oct series state bank call strike at 1410 whts ur opinion.. and also moser baer 100 call option.. please provide me ur suggestions

 

[kumark]

Hi Ghosh,

Thanks very much for reply...

From now on i will try to follow these rules as strictly as possible..
main problem is lack of decipline which is very important for trading,trying to improve in this aspect.

Regards

Kumar

Dear Kumar,

This is a common problem among traders. Firstly let me state the rules:

1- Your SL % should always be less than Target %, means if you are maintaining SL=30% then, Target >30% e.g. 40%
2- If you are not maintaining the above then, your SL should be less than average monthly profit or last profit per lot earned by you. Means if your average monthly profit or last profit per lot is Rs 5000 then, your SL should be less then, Rs 5000 atleast Rs 3000.

Our 1st motive should be to save our hard earned money 1st. See now a days Nifty is very choppy and so traders are mostly scared so they square off their positions quickly. Well what I suggest is, its time to follow rule no.2.

The moment you are in profit keep a trailing SL=10% from CMP. E.g. suppose you bought the call at 80 and it went to 110 so your trailing SL= 110-11=99 and suppose the CMP increases to 150 then, increase trailing SL=150-15=135. You did the correct thing by hedging your position and buying Nov. series.

I hope above helps.

Regards

 

[kumark]

Hi Nagendra,

Sorry for replying to post directed at Ghosh,

But as i read in this thread he always Suggest not to Trade in Near month series from 20th of that month..

Thanks & regards

Kumar

Hi Ghosh sir,
Am planning to enter oct series state bank call strike at 1410 whts ur opinion.. and also moser baer 100 call option.. please provide me ur suggestions

 

[tomdickpary]

sri as i know ur our guru. pls i have one problam .i dont know whats its mean R1~S1<300or>400. can u pls solved my fought .[ R1~S1].thanks a lot

 

[arjit]

Hi Tom, Go to page 1 to get R1-S1.Rules are described there.

 

[ghosh_ak34]

sri as i know ur our guru. pls i have one problam .i dont know whats its mean R1~S1<300or>400. can u pls solved my fought .[ R1~S1].thanks a lot

Dear Tomdickpary.

R1~S1 means difference between R1 and S1 and [300,400) means >=300 but <400. I used mathematical notations.

Regards

 

[ghosh_ak34]

sri as i know ur our guru. pls i have one problam .i dont know whats its mean R1~S1<300or>400. can u pls solved my fought .[ R1~S1].thanks a lot

Dear Tomdickpary,

R1~S1 means difference between R1 and S1 and [300,400) means >=300 but <400. I used mathematical notations.

Regards