Trade with options data
- Thread starter kiranjakka
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Option Value is combination of : Stock/Index Price + Time Value
You can always use option calculators to calculate option value based on current stock price, target stock price. You can do same for index to answer your question
But if u keep waiting for that value, the time decay eats up the time value part, and you will end up losing, unless the horizon is intraday.
For example: I brought 5400 CE@ 94 4 days earlier. The value of 5400CE@94 was based on 5350 + time value..
In last 4 days, the time decay has eaten up that value, so today at same index value o.e. 5350, it was trading at 77.
Most of new option traders dont understand completly the time value. And get trapped between : I brought for 94, so even today the value is 94. No today's value could be 70 or less due to time value lost.
Best to trade options is:
1. Do not calculate any values using option calculators
2. Understand support and resistance : For stock or index
3. buy options at support and sell at resistance : If you are purchasing
Option writing is opposite game itself
You can always use option calculators to calculate option value based on current stock price, target stock price. You can do same for index to answer your question
But if u keep waiting for that value, the time decay eats up the time value part, and you will end up losing, unless the horizon is intraday.
For example: I brought 5400 CE@ 94 4 days earlier. The value of 5400CE@94 was based on 5350 + time value..
In last 4 days, the time decay has eaten up that value, so today at same index value o.e. 5350, it was trading at 77.
Most of new option traders dont understand completly the time value. And get trapped between : I brought for 94, so even today the value is 94. No today's value could be 70 or less due to time value lost.
Best to trade options is:
1. Do not calculate any values using option calculators
2. Understand support and resistance : For stock or index
3. buy options at support and sell at resistance : If you are purchasing
Option writing is opposite game itself
Hi Kiran,
Wud u mind having a look at SAIL Options data & suggest what is cooking in it?
On EOD chart it gave a bullish breakout & I wud like a confirmation on Options to take a trade in it.
http://imagebin.org/198085
Thx in advance.
Regards
Abhi
Wud u mind having a look at SAIL Options data & suggest what is cooking in it?
On EOD chart it gave a bullish breakout & I wud like a confirmation on Options to take a trade in it.
http://imagebin.org/198085
Thx in advance.
Regards
Abhi
Both options data and volumes are showing uptrend. 110 level is confirmed, can go up to 115 levels.
Volumes in SAIL derivatives have been higher for last couple of days with yesterday being highest.
But enter on dip in stock, which will come as market will open down, and tata steel bad results will be sector dampner
Volumes in SAIL derivatives have been higher for last couple of days with yesterday being highest.
But enter on dip in stock, which will come as market will open down, and tata steel bad results will be sector dampner
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