iCharts Discussions

[NORBE_1958]

In the course of the run for eg if the prices do increase above 5000 and over to 5100 should we not get out of the previous and reenter to the new one based on the same formula

My only confusion is the time decay which is made known as the greatest enemy in option has that point been taken care by going with the less premium paid, is the so called premium the decay(time) so the less the premium paid is the less decay
for eg a premium of Rs8 sacrified what extra loss can one have isnt it no less than Rs8
Cost of 4400 ITM is (4400+605-4997) = 8
Quote
Again, your question would be,if the market goes against us we will lose only limited money in OTM/ATM options. I would say what are SLs for? Place SLs in options & trade, you will not see more losses than ATM/OTM options.

PLease elaborate as per the above quote the risk factor as per calculation and based on the above example the NF price is at 4997
and at 4400 ITM and if tthe price do ever comes down by 100 points to 4897 on expiry, The loss would be only rs 100 + the premium in which case is Rs8 = Rs108 or is it 100-8 =Rs92

second point is it not the same above the premium paid to OTM ATM or ITM the difference of price is going to be same ie 4997- eg expiry price 4897 =Rs100 for all whatever premium paid

and so the conclusion would have to be that u pay the less premium and extract the maximum profit YES

[ConMan]

Hi Norbe....

No you should not try and renter this again and again until unless you get an opposite signal to cover you long positions.

By re-entering new options again and again...you'll end up paying huge premiums and brokerage off course.

Premium is the one that dies with time...so by getting in lost cose ITM you have already taken care of it.

[NORBE_1958]

I have edited my last request please educate me in my second thought of doubt I am waiting for the signal to get into trades and deterrmined to stay put till that time comes hope the next swing comes soon and bring me along with the trend
Thanks a lot

[ConMan]

Please elaborate as per the above quote the risk factor as per calculation and based on the above example the NF price is at 4997
and at 4400 ITM and if tthe price do ever comes down by 100 points to 4897 on expiry, The loss would be only rs 100 + the premium in which case is Rs8 = Rs108 or is it 100-8 =Rs92

It will be 108

second point is it not the same above the premium paid to OTM ATM or ITM the difference of price is going to be same ie 4997- eg expiry price 4897 =Rs100 for all whatever premium paid

In OTM...ull lose only the premium

and so the conclusion would have to be that u pay the less premium and extract the maximum profit YES

[hansraj456]

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[hansraj456]

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[SwingTrader]

[ConMan]

Dear Hansraj

Dont spam my thread please.....

[hansraj456]

Hi

I am sorry i indicated my email at this forum. I didn't know the rules.

Thanks