Option Buy Recomendations

[ghosh_ak34]

Hi,
I bought nifty option puts at strike price 4800 (Rs-80 ) of September 24th 2009.

Please tell me is it good to keep few more days or its better to sell it now.

Is this market is going to come down in this month?, because from last last six days it continuously increasing

Dear eswar001,

Nifty seems to consolidate for a while within a narrow range 4900 - 4700.

Have you hedged your position ? When Nifty moves in narrow range then options suffer. So, try to make an exit asap.

Regards

 

[addme_1]

How will you rate selling 1 lot nifty call of strike 5000 @ Rs 31 and 1 lot nifty put of strike 4600 @ Rs 35 of current month? Though only 8 days are remaining in expiry i am worried because of low volatility.

 

[sameer999]

How will you rate selling 1 lot nifty call of strike 5000 @ Rs 31 and 1 lot nifty put of strike 4600 @ Rs 35 of current month? Though only 8 days are remaining in expiry i am worried because of low volatility.

nifty is expected to close lower than 5000 but far upper than 4600,

u will earn arrnd 3000 Rs. premium by selling but thing is u need to place heavy margin.

Also, why r u worried for low volatility? its always gud for a seller!

 

[terminator_123]

nifty is expected to close lower than 5000 but far upper than 4600,

u will earn arrnd 3000 Rs. premium by selling but thing is u need to place heavy margin.

Also, why r u worried for low volatility? its always gud for a seller!

Periods of low volatility are generally followed by bigger moves. Also the premium collected will be less. That's the reason its more profitable to write options when implied volatility shoots too much above historical vol.
3000/40000 is around 7.5% for 8 days. I would gladly pay for some thing like that..

 

[sameer999]

whn the volatility will is less, market being in a bit steady state , less volatile, so isnt that helpful for options writter coz the premium values r not going to take big moves in either direction.

as the premium moves in direction that is not favourable, additional need to fund more money for MTM comes so placin more money means adding more risk

 

[terminator_123]

whn the volatility will is less, market being in a bit steady state , less volatile, so isnt that helpful for options writter coz the premium values r not going to take big moves in either direction.

as the premium moves in direction that is not favourable, additional need to fund more money for MTM comes so placin more money means adding more risk

Yes, that's correct. But that's after we are already in the trade. Before we enter the trade, we would like volatility to be a little more so that we will collect fat premiums

 

[aditya14]

Periods of low volatility are generally followed by bigger moves. Also the premium collected will be less. That's the reason its more profitable to write options when implied volatility shoots too much above historical vol.
3000/40000 is around 7.5% for 8 days. I would gladly pay for some thing like that..

Sameer actually uses his own calculations for the margin requirements.

 

[[email protected]]

Ghosh sir,
I have face some prob.
(1) If
nifty spot
pre.close----4819
4848-----> open 10.00
4626 ----> 10.30
4636 ----> 10.45
can we go for put4800 or call 4600

Thanks & regards,
som

 

[[email protected]]

Sir,
Thank u very much sir .I was afraid when I post my query I think u can not interested in my query .but u reply me .May God give u very happiness in Ur life .

Thanks & regards,
som

 

[ghosh_ak34]

Ghosh sir,
I have face some prob.
(1) If
nifty spot
pre.close----4819
4848-----> open 10.00
4626 ----> 10.30
4636 ----> 10.45
can we go for put4800 or call 4600

Thanks & regards,
som

Dear Som,

Are you sure your data is correct. Nifty is at 4800 not 4600. Wil take price at 10:00 to compare it with price at 10:30 etc. as per Nifty option buy strategy posted in the 1st post of this thread.

For the week starting Mon.-Fri. R1 = 4900 and S1 = 4700.

Regards