Small value options

[pos_trader]

Folks

This post is based on my observation today and seek your opinion on this.

If one trades in 'small value options' then downside risk is low but possibility of upside is still there.

Example: Nifty 10500 CE today traded in the range 15.50 to 19.50 for large part of the day (Close 16.90).
When Nifty spot fell by 15 points between 2:57 pm and 3:04 pm, this CE merely came down from 17 to 16... that is delta of 1/15 or 0.06 (on the fall side).

However, if Nifty goes up by 30 points then this CE will surely rise by Rs 4 (or even Rs 5) . So during rise, delta works out much better at 4/30 or 2/15 or 0.13. So, this looks like a good day-trading strategy.
(Note: After about 15th of a month, choose next month's active strike cos current month will loose fast).

Is anybody regular at day-trading 'LOW VALUE OPTIONS' (which trade with high volume)?
To me it seems like a 'low risk -- low capital -- moderate reward' opportunity (10 am - 2 pm) but requires trader to watch the screen actively.

Thanks
pos_trader

 

[sumantra]

Folks

This post is based on my observation today and seek your opinion on this.

If one trades in 'small value options' then downside risk is low but possibility of upside is still there.

Example: Nifty 10500 CE today traded in the range 15.50 to 19.50 for large part of the day (Close 16.90).
When Nifty spot fell by 15 points between 2:57 pm and 3:04 pm, this CE merely came down from 17 to 16... that is delta of 1/15 or 0.06 (on the fall side).

However, if Nifty goes up by 30 points then this CE will surely rise by Rs 4 (or even Rs 5) . So during rise, delta works out much better at 4/30 or 2/15 or 0.13. So, this looks like a good day-trading strategy.
(Note: After about 15th of a month, choose next month's active strike cos current month will loose fast).

Is anybody regular at day-trading 'LOW VALUE OPTIONS' (which trade with high volume)?
To me it seems like a 'low risk -- low capital -- moderate reward' opportunity (10 am - 2 pm) but requires trader to watch the screen actively.

Thanks
pos_trader

Nice, i also follow this strategy.

 

[OptionQuant]

Guys, you have told about the product. What strategy do you use? When do you buy and when do you sell?

 

[Raju]

I used to buy BankNifty OTM call/put with value 5-20 /- for scalping with gain of few points .It had good liquidity.
One fine day 15/- value went upto 55+ , I was happy sold it. But there is a risk when we trade on expiry day. Such OTM call/puts can become 0.5/1 suddenly .

 

[anuragmalik]

I just trade in BNF weekly on expiry day, in between 9.30 to 10.30 keep eye on CEs of 200-300 higher from spot that time , if get in price range of 2-2.50-3 , bought that for target of double... triple... or more,,, with SL 0.05, its like pure bet, ( like this expiry got 25200 CE at 2 after my buy price went upto 10 rs, i booked @8 rs , 1 trade in a week in options.

 

[OptionQuant]

Hey Guys, this is AWESOME. What if we buy calls and puts at the same time?

I would like to back test it . Is there a place I can get historic options data minutewise?