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Nifty option strategy |
bismillah
White Belt
Joined: 25 Sep 2009
Posts: 35
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Post: #16  Posted: Thu Oct 04, 2012 10:27 am Post subject: Nifty option strategy |
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Hi all
I Just cant stop myself from commenting abt ur discussion of option trading,
As per My little knowledge which i got from the markets as an arbitrageur & analyst i would like to share my views.
If u want to trade options then plz go through the options strategies which u will find on google.
As per me, first decide the mood of the mkts & trade according to that.
I love to use a strategy & have taken following positions yesterday.
1) Short 1 lot 5700 Call @ 114.90
2) Long 2 lots 5800 Call @ 63.95,
Following was the options components @ time
Delta = 11
Gamma = 0.04
Theta slightly positive
Vega positive
Maximum loss risk = 5650
Maximum Profit = unlimited
Maximum Loss range = 5700 - 5900, BELOW 5700 LOSS OF ONLY 650 RS.
Profit above 5900 till expiry, currently getting 900 rs.
Hope it will help u
Best of luck
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Gemini
White Belt
Joined: 28 Apr 2009
Posts: 166
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| Post: #17 Posted: Thu Oct 04, 2012 7:19 pm Post subject: |
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Bismillah : Interesting post. Thanks for sharing.
I have noted today's parameters and calculated Theoretical call and put prices using Black Scholes calculator. Can you please let me know if the parameters that I have taken are correct and values arrived at are correct ? If no, please let me know corrections required.
Nifty Spot : 5787, 5800 Call Volatility ( taken value shown as Implied Volatility from NSE India Call price table) : 15.2, 5800 Put Volatility : 14.6
Theoretical Values : 5800 Call : Rs. 91, Actual : Rs. 97.95, 5800 Put : Rs. 74.11 Actual: Rs. 69.3
Interpretation: Bullish trend as Calls are overpriced, Puts are underpriced.
Thanks in advance. .
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bismillah
White Belt
Joined: 25 Sep 2009
Posts: 35
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| Post: #18 Posted: Fri Oct 05, 2012 12:46 am Post subject: Nifty option strategy |
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Hi
Sorry but i m out of station, will it be ok to revert u back on saturday
Regards
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Gemini
White Belt
Joined: 28 Apr 2009
Posts: 166
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| Post: #19 Posted: Fri Oct 05, 2012 11:51 pm Post subject: |
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Bismillah : Thanks. Take your time but do respond in detail. 
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bismillah
White Belt
Joined: 25 Sep 2009
Posts: 35
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| Post: #20 Posted: Sat Oct 06, 2012 11:24 am Post subject: Nifty option strategy |
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hi Gemini
Could u plz plz tell me wht value u have entered in stock price cloumn, if possible then calculate it now, i m online, & will share views
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drsureshbs
White Belt
Joined: 22 Oct 2008
Posts: 58
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| Post: #21 Posted: Sat Oct 06, 2012 11:58 pm Post subject: Re: Nifty option strategy |
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| bismillah wrote: | Hi all
I Just cant stop myself from commenting abt ur discussion of option trading,
As per My little knowledge which i got from the markets as an arbitrageur & analyst i would like to share my views.
If u want to trade options then plz go through the options strategies which u will find on google.
As per me, first decide the mood of the mkts & trade according to that.
I love to use a strategy & have taken following positions yesterday.
1) Short 1 lot 5700 Call @ 114.90
2) Long 2 lots 5800 Call @ 63.95,
Following was the options components @ time
Delta = 11
Gamma = 0.04
Theta slightly positive
Vega positive
Maximum loss risk = 5650
Maximum Profit = unlimited
Maximum Loss range = 5700 - 5900, BELOW 5700 LOSS OF ONLY 650 RS.
Profit above 5900 till expiry, currently getting 900 rs.
Hope it will help u
Best of luck
|
sir how is that above 5800 u will vb in loss range pl explain .pl do note my knowldge in this is limited my understanding is that loss is offset by the 2 lot5800calls u hav bought
regards
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SwingTrader
Site Admin
Joined: 11 Aug 2006
Posts: 2903
Location: Hyderabad, India
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| Post: #22 Posted: Sun Oct 07, 2012 8:18 am Post subject: Re: Nifty option strategy |
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| drsureshbs wrote: | sir how is that above 5800 u will vb in loss range pl explain .pl do note my knowldge in this is limited my understanding is that loss is offset by the 2 lot5800calls u hav bought
regards |
Even though the two lots of 5800 calls offset the short 5700 call, they are continuously losing value due to time decay. The scenario bismillah has explained is at expiry. If one plans to hold this position until expiry then the price will have to close a bit above 5900 for this position to breakeven and profit. There is risk between 5700 & 5900 with greatest risk at 5800 (if NF closes here at expiry) as both long calls will expire worthless and short call will be in loss by 100 pts.
This position is basically a volatility play. If NF breaks out to upside then position will quickly profit (it will profit immediately too if price moves to upside quickly). If NF breaks down then below 5700 the risk is quite limited.
I have attached two graphs - first one is the position profitability as of today (this shows how position profits if price starts moving immediately). The second one is the position profitability at expiry.
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Srikanth Kurdukar
@SwingTrader |
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bismillah
White Belt
Joined: 25 Sep 2009
Posts: 35
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| Post: #23 Posted: Sun Oct 07, 2012 10:15 am Post subject: Re: Nifty option strategy |
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| drsureshbs wrote: | | bismillah wrote: | Hi all
I Just cant stop myself from commenting abt ur discussion of option trading,
As per My little knowledge which i got from the markets as an arbitrageur & analyst i would like to share my views.
If u want to trade options then plz go through the options strategies which u will find on google.
As per me, first decide the mood of the mkts & trade according to that.
I love to use a strategy & have taken following positions yesterday.
1) Short 1 lot 5700 Call @ 114.90
2) Long 2 lots 5800 Call @ 63.95,
Following was the options components @ time
Delta = 11
Gamma = 0.04
Theta slightly positive
Vega positive
Maximum loss risk = 5650
Maximum Profit = unlimited
Maximum Loss range = 5700 - 5900, BELOW 5700 LOSS OF ONLY 650 RS.
Profit above 5900 till expiry, currently getting 900 rs.
Hope it will help u
Best of luck
|
sir how is that above 5800 u will vb in loss range pl explain .pl do note my knowldge in this is limited my understanding is that loss is offset by the 2 lot5800calls u hav bought
regards |
Dear
Suppose, today is expiry & nifty is going to expire @ 5880 level,
now calculate each of ur call price theoretically
5700 ce will be 180 points
5700 ce will be 80 points means 2 lots = 160 points
we have shorted 5700 ce & long in 5800 ce
now u can see, we r still getting loss in the above strategy
but if this will be the seen in next few days say 20 oct.
then we will be able to recover from loss
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drsureshbs
White Belt
Joined: 22 Oct 2008
Posts: 58
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| Post: #24 Posted: Sun Oct 07, 2012 5:31 pm Post subject: |
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Dear S T and Bismilla sir thank u sparing ur timme and sharing the knowldge with me Thank u again
Regards
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