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SwingTrader
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Post: #166  Posted: Tue Oct 16, 2012 8:40 pm Post subject: |
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| vinay28 wrote: | "............ but around 2:30 ............"
It looks like you are watching option sentiment regularly intraday. If so, good since market is giving sharp and sudden swings. As long as it happens intraday fine but when it happens due to gap up/down opening, it is scary. |
Options sentiment is based on EOD data, I can't watch it intraday. I have been anticipating this break since the last few days, I even posted about a possible down move yesterday. I just used today's strong move down to initiate a small position which is more a partial hedge for my stock positions than a speculative trade.
About gaps....I believe as long as positions are designed well, one can withstand gaps comfortably. The gaps on 27th Jul, 06th Aug & 7th Sep were all against the positions I was holding at that time. I think ITM options & mainly spreads are special. ATM/OTM option trades get destroyed in case of gaps (against the position), ITM & spread positions can usually be adjusted comfortably to reduce risk and in many cases even profit if the move in the direction of gap continues.
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vinay28
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| Post: #167 Posted: Tue Oct 16, 2012 8:42 pm Post subject: |
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| oh ok. |
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SwingTrader
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| Post: #168 Posted: Tue Oct 30, 2012 9:21 pm Post subject: |
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I have not posted updates for a while now as there was nothing much to write as market was drifting in the range. Today we seem to have broken down from that range, it remains to be seen if we see follow through for this break down. That is important for any sustained move down.
Options sentiment continues to be in sell mode. The chart that worries me most (as I do have some long positions) is the market breadth chart. Ideally I would have liked to see the short term breadth bottom out and move recover instead of the medium term breadth turning down which is happening. Next few days will be important. Basically I would be closely watching this chart to see if the upcoming moves will move the breadth like Jul-to-Sep move (bullish indication) or Feb-to-May move (bearish indication).
*** Jul-to-Sep move : Even though medium term breadth deteriorated, market did not collapse.
*** Feb-to-May move : Market just dropped (in sync with short term breadth cycles) once medium term breadth collapsed.
I continue to hold NOV 5700-5500 PUT spreads. I may add more put spreads in the next couple of days based on the market action.
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Srikanth Kurdukar
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vinay28
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| Post: #169 Posted: Tue Oct 30, 2012 9:30 pm Post subject: |
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| ST, it's just possible that tmrw may be the bottom and then consolidation before take off by next weekend. it will be interesting to see your study next week. |
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apka
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| Post: #170 Posted: Wed Oct 31, 2012 7:41 am Post subject: |
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yesterday for 1st time i paid attention to traded value and nifty fut traded value was near 9000cr whereas 5700ce was near 13000cr... if all strike options are added, nifty fut traded value must be 5% of all... such is the importance of options  |
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SwingTrader
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| Post: #171 Posted: Wed Oct 31, 2012 10:43 am Post subject: |
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| apka wrote: | | yesterday for 1st time i paid attention to traded value and nifty fut traded value was near 9000cr whereas 5700ce was near 13000cr... if all strike options are added, nifty fut traded value must be 5% of all... such is the importance of options |
hmm...I have never thought about it before either. Thanks for the info.
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pkholla
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| Post: #172 Posted: Wed Oct 31, 2012 10:48 am Post subject: |
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Apka: One thought for you
NSE counts one trade of 5000 call X 50 shares say at 100 premium as Rs 5100 X 50 = Rs 2.55 lakhs
But money invested in option was only Rs 5000
NSE counts one trade of NF at 5100 X 50 = Rs 2.55 lakhs
While money invested in future was Rs 2.55 lakhs
So is it fair for you to compare volumes by value ASSUMED by NSE?
Warm regards, Prakash Holla |
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apka
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| Post: #173 Posted: Wed Oct 31, 2012 11:11 am Post subject: |
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| pkholla wrote: | Apka: One thought for you
NSE counts one trade of 5000 call X 50 shares say at 100 premium as Rs 5100 X 50 = Rs 2.55 lakhs
But money invested in option was only Rs 5000
NSE counts one trade of NF at 5100 X 50 = Rs 2.55 lakhs
While money invested in future was Rs 2.55 lakhs
So is it fair for you to compare volumes by value ASSUMED by NSE?
Warm regards, Prakash Holla |
i assumed option price will not be as per nifty value. needs to be clarified i guess.
i quickly took few minutes back 5700ce traded volume 5003150 * 56.15 (ATP) = 28.09 crs... but terminal is showing 5700ce traded value something 2880.00 crs... so im confused  |
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pkholla
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| Post: #174 Posted: Wed Oct 31, 2012 11:35 am Post subject: |
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Apka: Look at NSE FnO sheet showing most popular Nifty based futures and options. Trading value is certainly calculated somewhere around NF market value and NOT at option purchase value for calls/ puts. That's why we see such high values for NSE FnO trading. I call it cheating! (And charging us STT on full value inc. strike+premium, at expiry is also cheating)
Regards, Prakash Holla
Example: So far NSE reports 118016 contracts of 57 call ie 59 lakh options which they value for TURNOVER as Rs 339648 lakhs. So Rs 5757 per option ie they have taken 5700 strike + 57 premium which looks correct: as today hi is 60.3 and lo is 51.6
http://www.nseindia.com/live_market/dynaContent/live_watch/derivative_stock_watch.htm |
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SwingTrader
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| Post: #175 Posted: Wed Oct 31, 2012 12:38 pm Post subject: |
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I think even if the amount invested in an option is very less, it is still controlling the underlying futures contract (of course, OTM options control a bit less but the control of ITM option is significant). The control exerted by options is still quite significant due to the leverage.
But, yes, estimating how many equivalent futures contract the options as a whole are controlling is slightly cumbersome but possible. I am not sure how large the figure is going to be but the leverage factor itself makes is quite significant.
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vinay28
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| Post: #176 Posted: Wed Oct 31, 2012 1:07 pm Post subject: |
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| the % will drop once cash based buying starts |
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SwingTrader
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| Post: #177 Posted: Wed Oct 31, 2012 1:38 pm Post subject: |
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| vinay28 wrote: | | the % will drop once cash based buying starts |
What % will drop? Please clarify...
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Srikanth Kurdukar
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vinay28
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| Post: #178 Posted: Wed Oct 31, 2012 1:40 pm Post subject: |
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| % posted by apka |
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apka
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| Post: #179 Posted: Wed Oct 31, 2012 1:50 pm Post subject: |
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| vinay28 wrote: | | % posted by apka |
in that case i assume % would remain there only, but increase would be in put option traded value as calls would shed OI incase of cash buying taking us up... |
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vinay28
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| Post: #180 Posted: Wed Oct 31, 2012 1:57 pm Post subject: |
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| may be apka but cash to fno turnover ratio will increase not just because of cash buying alone but also due to drop in fno volume |
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