Trade with options data

[uttamkamlesh]

One of key trading rules for option trading is: Book your profit/loss

Often the price movement looks so small: 2/3/4/5 rupees, ki aadmi sochta hai: lets wait it'll come back...... or go up more...

by the time you are done thinking, the market moves up/down and one gets stuck....

Second trading rule is to identify: whether you are investor or trader

--- Mostly folks move from equity investment to options for lure of good
return, which is good as they say "Greed is good"

---- But the investor mindset will not work for options... So if you brought say SBIN today and took delivery, and it is in loss, you wait....

and pray and hope it comes back up... and then exit... at profit or breakeven
or taking minor loss..

Options: investor mentality doesn't work: Options is not for investing, rather trading

If you are of investor mindset, trade futures, that too is leveraged. but you
have option to carry over to next expirty with small loss, as compared to
options which will be ZERO on expiry if your investor mindset made you
to hold when you are on wrong side of trade

InTheMoney Options of next month expiry can be used as one of the option for swing trading/investing.... with negligible time decay.

 

[dashr]

FII ka kamaal
Is it a short straddle and a long straddle by one FII.

ABC Capital Investments buys from XYZ Investment Fund huge amounts of 5500CE and 5500PE. They are both subsidiaries of a single parent company.

Now if the market corrects in the coming days, ABC will start offloading when 5500PE is deeper in the money. And ABC will make profits.

Also, notice that other than 5500CE and 5500PE, next two actively written options were 5600CE and 5400PE which indicates that at expiry market will be between 5600 and 5400 and these could expire worthless.

If that is the case, that means after correction markets may claw their way back to 5500. At that stage XYZ will convert their position and profits.

 

[kiranjakka]

JP seems to be bullish one can write 85 puts options or go long keeping a stop at 84.5-84



no trades on jp today as market is negative we will try to trade shorting stocks

 

[kiranjakka]

low OI in puts just because puts are not sold that easily than calls

 

[kiranjakka]

still data favours shorters

 

[manish9300]

kiran ,
what is ur view on yesterdays bulk deal in 5500 pe ce .last time we has such deal in 5200 pe ce in oct a day before expiry if i remember correctly and nifty closed at around 5200!!

 

[kiranjakka]

mee too expecting a close at 5500 spot. lets wait and watch for now

 

[manish9300]

5400 put is not supported by writers and heavy writing seen in 5500 call.Seem to suggest that we may see nifty at 5400 before expiry.Only doubt is becoz of 5400 call getting covered.

 

[anilnegi]

http://www.nseindia.com/live_market...t=OPTIDX&date=-&segmentLink=17&segmentLink=17

long holders to be careful

 

[valuable_earner]

mee too expecting a close at 5500 spot. lets wait and watch for now

Hello Kiran,

Any reason for the above interpretation? As 5500 call writing is more and heavy than 5500 put ... please clarify

Thanks

Regards