option strategies????

[nandu]

new 2 options ....help me??.

1. Can I sell an option today and buy the same 2 days before expiry?. or "SELL" is purely based like "short sell"? in cash market.

2. what is the difference between below 2 strategies?.say nifty spot is 5400.

a. i buy 1 lot of 5700-CE@65 and 1 lot of 5500 -PE@55?.

b. buy 1 lot of 5700-CE@65 and SELL 1 lot of 5900-CE@15?

C.sell 1 lot of 5500-PE@55 and sell 1 lot of 5700-CE@65?

now, nifty spot say 5600.

 

[nareshch]

new 2 options ....help me??.

1. Can I sell an option today and buy the same 2 days before expiry?. or "SELL" is purely based like "short sell"? in cash market.

2. what is the difference between below 2 strategies?.say nifty spot is 5400.

a. i buy 1 lot of 5700-CE@65 and 1 lot of 5500 -PE@55?.
On expiry if nifty is in the range 5500- 5700 , you will loose 65+55 == 120 points. you will be in profit either nifty is below 5380 or above 5820 .


b. buy 1 lot of 5700-CE@65 and SELL 1 lot of 5900-CE@15?
You will loose 50 points if nifty closes below 5700 . you will be in profit above 5750 till 5900 .Doesnt matter how high it go above 5900 ( Anyway , i dont think we wil lsee 5900 in this settlement)


C.sell 1 lot of 5500-PE@55 and sell 1 lot of 5700-CE@65?

you will be in loss if nifty is below 5380 or above 5820
The max profit in this case is only 120 points where as Loss is Unlimited ..be careful with this type of strategies ..

Naresh

 

[nandu]

new 2 options ....help me??.

1. Can I sell an option today and buy the same 2 days before expiry?. or "SELL" is purely based like "short sell"? in cash market.

2. what is the difference between below 2 strategies?.say nifty spot is 5400.

a. i buy 1 lot of 5700-CE@65 and 1 lot of 5500 -PE@55?.
On expiry if nifty is in the range 5500- 5700 , you will loose 65+55 == 120 points. you will be in profit either nifty is below 5380 or above 5820 .


b. buy 1 lot of 5700-CE@65 and SELL 1 lot of 5900-CE@15?
You will loose 50 points if nifty closes below 5700 . you will be in profit above 5750 till 5900 .Doesnt matter how high it go above 5900 ( Anyway , i dont think we wil lsee 5900 in this settlement)


C.sell 1 lot of 5500-PE@55 and sell 1 lot of 5700-CE@65?

you will be in loss if nifty is below 5380 or above 5820
The max profit in this case is only 120 points where as Loss is Unlimited ..be careful with this type of strategies ..

Naresh

thanks for your guidance naresh. You did'nt reply 2 me, whether i can SELL an option on one day and can BUY the same on a different day., say after 2-3 weeks. - As these questions will be a baby Class questions.? kindly help me 2 understand.

 

[nagakiran]

I read in the same forum that we can short sell some option today and buy back before expiry.
But it's better if someone also confirms the same..

 

[nareshch]

I read in the same forum that we can short sell some option today and buy back before expiry.
But it's better if someone also confirms the same..

You can . Thats the advantage of derivatives

Naresh

 

[nandu]

You can . Thats the advantage of derivatives

Naresh

thanks naresh...coz., geojit people misguided me stating, if u sell an option u must buy back on the same day.

Thanks for Clarifying my doubt.

 

[rkkarnani]

thanks naresh...coz., geojit people misguided me stating, if u sell an option u must buy back on the same day.

Thanks for Clarifying my doubt.

When you sell an OPTION, you have to give margine which is equivalent to the margine required for selling a Future Lot. Maybe they do not charge this extra margine hence insist on squaring the position the same day.

 

[siddharthpathak]

new 2 options ....help me??.

1. Can I sell an option today and buy the same 2 days before expiry?. or "SELL" is purely based like "short sell"? in cash market.

2. what is the difference between below 2 strategies?.say nifty spot is 5400.

a. i buy 1 lot of 5700-CE@65 and 1 lot of 5500 -PE@55?.

b. buy 1 lot of 5700-CE@65 and SELL 1 lot of 5900-CE@15?

C.sell 1 lot of 5500-PE@55 and sell 1 lot of 5700-CE@65?

now, nifty spot say 5600.

Hi Nandu;

i have read your thread and would like to clearify that:

1. you can definately short sale an option and even not needed to square off two days before expiry, you may even allow exchange to square off your trade on expiry. hence if the option is in the money you need not pay any thing and amount received as premium may be termed as your net profit. but in that case you need to pay a margin that is almost equivelent to a future contract.

2. these are the two different strategy and can be used betting as :

a. here you are betting on extreme volatile market but you donot know which way it may head
b. you are betting on stagnent bullish market. strategy is better known as bull spread. this may be done where you cannot afford a margin of future or you are not willing to take infinite risk. limited risk - limited returns. buying an appropriate bear spread may lock riskless profits.

 

[rahi.sinha]

hi,

thee are many excel sheets which can gv u automatic trading range once u combine ur optins in a butterfly or any other strategy. this way u can see abv what or below what will u be profitable.

 

[siddharthpathak]

can also be developed one .... a small macro is developed to identify the opportunities... but i cannot find a place to attach here ....