Hi Ghosh Ji
Thank you for starting such a GREAT THREAD ... I need to know about the following startegy
Tomorrw we are going to buy a call of
at support 4525 if it opens Gap up around 4530 or 4540
Nifty Aug 2009 4800 CMP 44.15
Nifty Strike Price 4800 @ 48 or 50 which ever we will get
SL we think should we 38.....
Is it good as per your startegy in first post .....
We have confusion about sideways strategy ... will that only be applicable around 10:30 to 10:45 and 3:00 PM to 3:15 Pls Clarify
Thanks in advance
Dear Sonu76,
There are two diferent strategies (a) Nifty Options trading using weekly R1 & S1 and (b) Daily Nifty Future trading with option hedging.
(a) For Nifty options R1 and S1 for the current week is calulated using last weeks high,low, close and R1 and S1 remains same for the whole curent week starting Mon.-Fri.
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.
And suppose you are holding the position for next day, offcourse after hedging then, next day either square off both or hold on to profit making option and exit from loss making option. This all depends on once risk appetite.
If R1 - S1 is outside (300,400] then, we trade as per sideways strategy. Means we buy equal no. of calls or puts as per trend check. Means when Nifty is up by 20pts from previous time line then, suppose we buy 1 call at S1 strike price. And if Nifty is down by 20pts from previous time line we 1 put at R1 strike price.
And if R1 - S1 is within (300,400] then we trade as per normal trend check strategy depending on trend, if trend is up means for last 15 days trend is up, then we buy more calls say 2 calls at S1 and when Nifty is down by 20pts then, we buy lesser puts say 1 put.
Do not reco. to trade in current month's options after 20th of the month.
(b) We go long in NF as per trend and hedge our position by buying near money or AT money option.
Once Sup. is broken by 10pts, we go short and we go long once Res. is broken by 10pts.
Trade as per trend so far these sup. and res. hold good, once these broken go short or long as stated above.
To make it simple, trade as per trend when price is between Res. & Supp.
and once Sup. is broken go short and once Res. is broken go long.
But always hedge your position by buying AT or near money option.
Hope this helps.
Regards
