So anybody is actually in profits just trading Options

[sumeetsj]

My rationale for taking this second trade also i had posted n the same thread:

the link is as follows:

http://www.traderji.com/futures/55174-nifty-real-time-discussions-225.html#post582269

and the latest one:

http://www.traderji.com/futures/55174-nifty-real-time-discussions-225.html#post582269

 

[dhariawad]

Hi virendra,

Thanks for the informative posts.
You have mentioned that you have started with 17k. But for shorting a option itself needs margin = one nifty future lot as per my understanding. Is this correct? If so, how you have managed to short nifty option.

Can you also please clarify the following queries::

How much margin is blocked by your broker per credit spread entry? (i.e, sell one nifty option and buy one nifty option)

Does your broker allow you to place multi-leg order with LIMIT so that you can get the credit as expected? can i know who is your broker?

Thanks,
...Summasumma

Thanks Summasumma for your contribution and interest. Sorry for getting late at responding I was seriously busy with reducing my learning curve and growing as a better trader (derived from Alexander Elder)
Yes you are right that shorting options obligate you to put margin against it. Being short of the capital I initially moved with a broker local sub-broker to provide me a leverage on my low capital. He used to open my limits for a trading week on a condition of not exceeding my loss to my account size on a daily basis (which unfortunately is now not available due to SEBI's guideline of exposure penalty policy)
Once the account reached a respectable size; I adopted a very strict money management formula to avoid seeing a ground again. Having grown my account size I am working with my psychology part these days. BTW on a good note I am still trading with my same broker with low brokerage i.e. 15 Rs lot, though still cheaper options are there but its a part of thanks giving sort of thing.

regards

virendra

regards

 

[abyscorporate]

Yes I make profits from trading options.I trade only on Index options and strictly intraday

 

[columbus]

Yes I make profits from trading options.I trade only on Index options and strictly intraday

......I think it is TOUGH during expiry week...............

 

[SexyTrader]

Options are good for hedging.

But just doing options will sooner or later turn into losses, if one does not know the correct pricing methods.

"Betting" that price will rise or fall...is not a sure-fire way always...hence most people lose in options.

 

[darshanshukla]

Dear Friends,
Option is always beneficial and profitable to every one with minimal loss ratio
The main thing is you should time your trade and need very good follow through...
You can check my account that I am right or wrong??
Option is profitable and better to trade than Futures.
Happy trading ahead in New year,
Darshan

 

[krishere]

I also think options are far better than futures.....

 

[viharpatel]

Really option are far better than futures.By trading in futures I lost money, but now with options I am able to minimize the risk and earn some money.

I also think options are far better than futures.....

 

[prst]

Dear Friends,
Option is always beneficial and profitable to every one with minimal loss ratio
The main thing is you should time your trade and need very good follow through...
You can check my account that I am right or wrong??
Option is profitable and better to trade than Futures.
Happy trading ahead in New year,
Darshan

Hi Darshan,

could you please elaborate about the profitability part of options.
we are talking about the buying options and not short selling (main reason being the margin part of it)

one thing i agree with options, is that they limit your risk. you'll be certain of the amount u'll lose at most, but your profits are unlimited(ideally).
but doesn't this mean that you are already defensive on your trade at the start , you feel that your trade will go against your plan?

please excuse me for my ignorance on the part of options, but this is just what i feel about buying options.

would be helpful if seniors enlighten me on the funda of strike price selection.
for example, if i current price of my security is 19 and i buy put option of strike price 17.5. now price of my security has stayed at same price for 2 days and reduced to 18.95 on third day. how does it affect the value of my options?
hoping a useful discussion on this ..

thanks
Prashanth

 

[DanPickUp]

Hi Prashanth

Depending on how far away option expiration is and how much volatility is in the market, you will have various prices.

We start with what you give us:

Then comes the change of the underlying level and the change of time to expiration:

Now we stay with that and volatility drops:

And here the opposite when volatility rises:

I could go further in the subject, but I think you should get the idea about it.

Most important factor on any time frame is the change of volatility. When you ask which strike to choose, you have to check the Implied Volatility on the options on each strike level beside the open interest.

In general you buy the onces which have lower Implied Volatility and you would sell the onces with higher Implied Volatility. But this depends also on the strategy you have in mind to implement in the market.

Happy new year

DanPickUp