Trading With CrossOver And BB

[lancer]

Hi Lancer,

Another One To Keep An Eye On Is RELCAP & TTML....Check For Closest Strike Price CALLs & Futures For These.....TTML Is A Slow Mover But Is Probably Safer.....& On Choppy Days Gives Good Trading Opportunites For The Laid Back.

Happy & Safer Trading

SavantGarde

Here are the latest call prices for the stocks quoted by Savant. Clearly he has reccommnded for "Keep An Eye" that is "Buy On Dips"

1. TTML 30 Jul '09 LOT 10450 Call 40.00 2.70
2. RELCAP 30 Jul '09 LOT 276 Call 1000.00 60.00
3. IFCI 30 Jul '09 LOT 7880 Call 60.00 4.65

For all those insisting upon you to start a new thread and interested in Futures may look into it.

Multiply the lot size with the CMP and you get the margin money required to trade. Here the risk is limited to this investment and the upside is extreme. I am new to it as well , though I have burnt my fingers with Futures with substantial gains as well.

Infact as I have been going though various sectors of FNO, and find that buying Call Options are better investments with mimimized risk as your EOD exposure is much less. It can support capitals with limited portfolios.

No doubt that is the very reason that Savant has been asking to look for Call Options with the nearest strike price to maximize the returns.

Thank You Savant For Intro To This New Investment Stratergy In FNO.


Wishes,

Lancer.

 

[lancer]

Correct me if I am wrong.
Here Stochastic (5,3,4) means : %K=5, %D=3 and which value is 4 ???

Hi Mogembo,

Stoch 5,3,4 means

1. Avg period :- 5
2. % K period :- 3
3. % K Slow : - 4

If you are using Sharekhan trade tiger, it has the builtin study to support all your indicators.

Wishes,

Lancer.

 

[SavantGarde]

Hi Lancer,

You Might Want To Look At CAIRN, APIL & TATAMOTORS For Futures....

Happy & Safer Trading

SavantGarde

 

[lancer]

Hi Lancer,

You Might Want To Look At CAIRN, APIL & TATAMOTORS For Futures....

Happy & Safer Trading

SavantGarde

Hi Savant,

Why is it that I feel comfortable dealing with Call Options than the Futures ? Is it that the exposure is huge ? This is what I got into today though my timing of entry into IFCI CA 60 was definitely inappropriate. But another lot can be added next day on a dip.

What is rather surprising is that when there is a fall of about 5% in the stock value, the value of the call has depreciated by about 30%. And the same proportion is likely to be trend when there is an appreciation.Further, there is no MTM deep pocket losses as in the case of Futures. So the risk management in the Calls is optimized.

So why not buy calls of the nearest price than going for Futures, when the profits appear to be equivalent ? Further, the capital requirement being nominal one can always keep adding lots on dips Am I wrong? Are there any other pitfalls associated with CALL Options ?

ScripCode ExchangeCode OrderType ExecDate ExecTime ExecQty ExecPrice TradeValue OrderId InstrumentType SecurityName
RELCAP NSE-FO Buy 30/06/2009 15:26:21 276 40.00 11040.00 36375975 OPTSTK RELCAP 30 Jul 2009 CA 1000.00
TTML NSE-FO Buy 30/06/2009 14:29:21 10450 1.85 19332.50 36371240 OPTSTK TTML 30 Jul 2009 CA 40.00
IFCI NSE-FO Buy 30/06/2009 11:53:25 7880 4.30 33884.00 36361060 OPTSTK IFCI 30 Jul 2009 CA 60.00

And Cross Overs Do Aplly To CALL OPTIONS.

Wishes,

Lancer.

 

[lancer]

The List Of Scrips Added So Far By Savant For FNO Are......
1. IFCI
2. TTML
3. RELCAP
4. CAIRNS
5. TATAMOTORS
6. APIL
7. SUZLON
8. JPASSOCIATES
9. ADLABS.
10. PUNBANK.

Buy On Dips Only And Keep An Eye For Bargain Hunting.

Wishes,

Lancer.

 

[SavantGarde]

'JAI BABA'

Hi Lancer,

It Is Probably Comfort Zone Because Of What You Understand Of Options So Far.

a) Firstly There Is A Time Decay....After 16th Decay Is A Lot Faster
b) Adding Same Strike May Not Be Advisable
c) Moreover, There Will Be Days Where You Need To Trade It Actively, Irrespective Of What Premium You Paid For It. Even Small 10-20 Paise Trade In IFCI Call Is Quite A Bit Of Money.


There Are Lots Of Things In Understanding Options, When My Other Laptop Starts Will Send An Excel For Options, There Was A Bit Of Work Still Left To Complete, But Have To Revive The Laptop First.

Therefore, It Is Not A Good Idea To Always

A) Add On Dips
B) Adding Of Same Strike


Let's See How The Market Behaves Tomorrow....Perhaps 55 Strike May Become More Active....

Happy & Safer Trading

SavantGarde

Hi Savant,

Why is it that I feel comfortable dealing with Call Options than the Futures ? Is it that the exposure is huge ? This is what I got into today though my timing of entry into IFCI CA 60 was definitely inappropriate. But another lot can be added next day on a dip.

What is rather surprising is that when there is a fall of about 5% in the stock value, the value of the call has depreciated by about 30%. And the same proportion is likely to be trend when there is an appreciation.Further, there is no MTM deep pocket losses as in the case of Futures. So the risk management in the Calls is optimized.

So why not buy calls of the nearest price than going for Futures, when the profits appear to be equivalent ? Further, the capital requirement being nominal one can always keep adding lots on dips Am I wrong? Are there any other pitfalls associated with CALL Options ?




And Cross Overs Do Aplly To CALL OPTIONS.

Wishes,

Lancer.

 

[lancer]

'JAI BABA'

Hi Lancer,

It Is Probably Comfort Zone Because Of What You Understand Of Options So Far.

a) Firstly There Is A Time Decay....After 16th Decay Is A Lot Faster
b) Adding Same Strike May Not Be Advisable
c) Moreover, There Will Be Days Where You Need To Trade It Actively, Irrespective Of What Premium You Paid For It. Even Small 10-20 Paise Trade In IFCI Call Is Quite A Bit Of Money.


There Are Lots Of Things In Understanding Options, When My Other Laptop Starts Will Send An Excel For Options, There Was A Bit Of Work Still Left To Complete, But Have To Revive The Laptop First.

Therefore, It Is Not A Good Idea To Always

A) Add On Dips
B) Adding Of Same Strike


Let's See How The Market Behaves Tomorrow....Perhaps 55 Strike May Become More Active....

Happy & Safer Trading

SavantGarde

'JAI BABA"

Hi Savant,

This is what I sum up from your suggestions for Call Options.

1. Get in early in the series and do not hold the call after 20th of the month as the decay starts after 16th.

2. Now that I have gone for a IFCI 60 call @ 4.30 with 3.20 being the closing price, it is not prudent to add another lot of the same call. However, I may add a lot of Call 55, as the spot price has reached below 55, if the market shows upmove only. So adding on dips exactly does not always pay dividents. However, the volumes of both Calls have been good with 4.2 and 2.4 crores each.

3. Now the trading part of it. How do I start trading IFCI @ lower than 4.30 incurring initial losses unless it makes an up move above this price. Or do you reccommend to start trading @ and around 3.20 , depending on the market going short and long even at this level with trailing profits ? Or is it that I start trading once the break even point of of 4.30 is reached ?

Have I been caught on the wrong foot? CALLS and PUTS are very little understood facets of F & O. But the learned traders say that good and safe profits can be made from these if one understands the dynamics of the system. Please enlighten on the topic.

Believe there are infinite reasons to start a new thread, when you find it appropriate. Thanks.

Wishes,

Lancer.

 

[SavantGarde]

'JAI BABA'

Hi Lancer,

Point 1 & 2 Are Correct

Now Coming To Point 3 - It Is A Little Tricky, In The Sense, If One Can Find The Range To Trade So That Eventually Your Entry Price Gets Reduced From 4.30, & End Of It All You Are Still Holding CALL, Whether You Find The Range In 60 Strike Or Any Other Strike Is Immaterial As Long As You Trade The Most Active Strike.

Now If The Most Active Strike Happens To Be Other Than The One You Are Holding, Will Mean Extra Capital Required To Trade The Different Strike.

Let's See How The Next 2 Trading Days Go.....

Will Look Into Posting Something On Options.

Happy & Safer Trading

SavantGarde

'JAI BABA"

Hi Savant,

This is what I sum up from your suggestions for Call Options.

1. Get in early in the series and do not hold the call after 20th of the month as the decay starts after 16th.

2. Now that I have gone for a IFCI 60 call @ 4.30 with 3.20 being the closing price, it is not prudent to add another lot of the same call. However, I may add a lot of Call 55, as the spot price has reached below 55, if the market shows upmove only. So adding on dips exactly does not always pay dividents. However, the volumes of both Calls have been good with 4.2 and 2.4 crores each.

3. Now the trading part of it. How do I start trading IFCI @ lower than 4.30 incurring initial losses unless it makes an up move above this price. Or do you reccommend to start trading @ and around 3.20 , depending on the market going short and long even at this level with trailing profits ? Or is it that I start trading once the break even point of of 4.30 is reached ?

Have I been caught on the wrong foot? CALLS and PUTS are very little understood facets of F & O. But the learned traders say that good and safe profits can be made from these if one understands the dynamics of the system. Please enlighten on the topic.

Believe there are infinite reasons to start a new thread, when you find it appropriate. Thanks.

Wishes,

Lancer.

 

[lancer]

'JAI BABA'

Hi Lancer,

Point 1 & 2 Are Correct

Now Coming To Point 3 - It Is A Little Tricky, In The Sense, If One Can Find The Range To Trade So That Eventually Your Entry Price Gets Reduced From 4.30, & End Of It All You Are Still Holding CALL, Whether You Find The Range In 60 Strike Or Any Other Strike Is Immaterial As Long As You Trade The Most Active Strike.

Now If The Most Active Strike Happens To Be Other Than The One You Are Holding, Will Mean Extra Capital Required To Trade The Different Strike.

Let's See How The Next 2 Trading Days Go.....

Will Look Into Posting Something On Options.

Happy & Safer Trading

SavantGarde

'JAI BABA'

Hi Savant,

Got your point. If I feel appropriate, may exit with the loss of 1 point and pickup on another dip to sell at a higher level to bring my price at par with the market. Have to look for the price band of trading if it comes to trading zone . The Prime factor remains the Price of the main stock. If it shows an upmove with good volumes one may hang on to get some gains.



Shall keep you posted of the progress.

Wishes,

Lancer.

 

[shantanu_chamola]

Hi,

I have a very basic question regarding FnO. Not sure if i am asking in the right forum. I know theory of FNO so want to know if we can make profit by following strategy.
Say my uderlying stock is "A" for FNO.Now i buy 1 lot of Futures for it and on other hand i also buy put option for same underlying.

The advantage is that in both Futures and Options gains are unlimited but losses can be limited in Options.

Here we have 2 scenarios :
1) if we make a loss in futures, then we make gain in options for same underlying as we have put option and the final result is that we end up with very little or no loss in futures as that wud be hedged by put option !!. Ultimately we end up paying little loss.

2) But on other hand if we make profit in Futures then iwe wud end up making lot of profit due to the fact losses in options are limited.So here we have the case that we have unlimited profit but limited losses.

Going by above theory we either make big profits or make small losses. Am right in thinking what i mentioned above or am i missing something here? I request Seniors in this forum to please guide me if i am correct in my thinking or not