BankNifty PUTs & CALLs

[Blackhole]

Explanation of the post

Edit : This thread was started by Columbus, but later in merging two posts somehow the thread starter's name changed to Blackhole. Credit to Columbus please.

In BANKNIFTY the open interest is low, rather very low compared to Nifty.
In nifty OPEN INTEREST used to take care in deciding the boundaries
of CALL and PUT windows.Moreover the BID-ASK rates are wide apart ,which
discourage many to go for BANKNIFTY options,so interest is low.

So we have to devise a method ,which takes care of decaying in options.
Decreasing the width of the range with time ,is one method.

On an average we have 22 trading days per month.First 7 trading days
let us suppose 40~400 decides the boundaries of PUT& CALL windows.
Next 7 days 30~300 decides the boundaries and 20~200 for the rest.
Let us see ,how it pans out !!!!

Day=1 BankNifty=10341(+337)

The philosophy is like this,if the market is bullish then the present 10100CE
trades more than the present 396.90 and CALL window will move to higher
strikes.On the other hand if market is bearish ,then the present 10500PE
trades at higher than present value of 350.00 and goes out of PUT window.
PUT window seeks lower strikes.

What is this complex image mean exactly?

best man to answer your query is columbus(thread owner) and timepass(moderator and follower of thread) still will try to simplify a bit.


top left has Vix...that helps sellers and buyers to place their bet accordingly......for instance high no of vix like 22 or so premiums or the options would be high and sellers get more aggressive,good trade managers earn good with selling and strategy playing.


MAxpain ;;; +/- 50 -70 is a strike where series expiry is expected. It can also change daily based on heavy movements.

on top right we have put call ratio that suggest the sentiments of sellers/buyers.....like below 1 its said to be bearish whereas above 1.25 is bullish but overbought.

left side we have monthly expiry mentioned ....or right side we have monthly gain or loss(expired based on index)

bottom right we have ...max Open interest standing on both put and call...that helps in swing positions or strategies and for intraday we have intraday open interest changes.


this are just indicator that can help u place strategies with the data analysis before hand.......like i had straddle /strangle sold in last series helped me earned over 50% of credit received without adjustments.


for some strategy volatility is good for some its bad....for some time decay is good for some its bad.....please go thru strategies , learn everything theta vega implied volatility beforehand.

suggestion : please follow columbus thread and thread mentioned in his signature

http://www.traderji.com/options/66083-put-call-options.html



hope this helps.

 

[sudris]

Let us see ,how it pans out !!!!

Hi Columbus, I recall your other thread on similar study for the Nifty options.
Off lately, didn't go through it to learn if any conclusion was derived by looking at those ranges (pls excuse my ignorance.)

Rather than observing the outcome eventually as it happens, why not analyze the past records?
Of course, I don't mean to say that live analysis is indistinct.

 

[columbus]

Hi Columbus, I recall your other thread on similar study for the Nifty options.
Off lately, didn't go through it to learn if any conclusion was derived by looking at those ranges (pls excuse my ignorance.)

Rather than observing the outcome eventually as it happens, why not analyze the past records?
Of course, I don't mean to say that live analysis is indistinct.

Hi sudris,
Yes.I have similar thread on Nifty Options also.When I started trading,there
are hardly any threads on today's action on options,in SIMPLE terms.So my
objective is to present the data without much emphasis on Interpretation but
to keep abreast with latest information.

 

[columbus]

JUL series Day-2 BankNifty=10412 (71)

In JUL series 2UP days as follows.
UU

For more details ,refer to post.1.

 

[ashish2010]

Columbus,
I am really amazed by the way you guys are doing all these research works. really appreciate it and will be looking forward for a successful journey.

Thanks & Regards,
Ashish

 

[columbus]

JUL series Day-3 BankNifty=10481 (62)

In JUL series 3UP days as follows.
UUU

The Expected Zone moved to (10300~10600) from yesterday's (10200~10600).

 

[columbus]

JUL series Day-4 BankNifty=10529 (48)

In JUL series 4UP days as follows.
UUUU

The Expected Zone moved from yesterday's (10300~10600) to (10300~10800). Unlike Nifty's zone BankNifty's expected zone moves
fast, as expected.

CRR
Also called the Cash Reserve Ratio, refers to
a portion of deposits (as cash) which banks have to keep/maintain with
the RBI. This serves two purposes. It ensures that a portion of bank
deposits is totally risk-free and secondly it enables that RBI control liquidity
in the system, and thereby, inflation by tying their hands in lending money.
If CRR is cut ,that portion of money is released into system.
(Source:Internet)

 

[columbus]

JUL series Day-5 BankNifty=10642 (113)

In JUL series 5UP days as follows.
UUUUU


The Expected Zone moved from yesterday's (10300~10800) to (10400~10900).

CRR
Also called the Cash Reserve Ratio, refers to
a portion of deposits (as cash) which banks have to keep/maintain with
the RBI. This serves two purposes. It ensures that a portion of bank
deposits is totally risk-free and secondly it enables that RBI control liquidity
in the system, and thereby, inflation by tying their hands in lending money.
If CRR is cut ,that portion of money is released into system.
(Source:Internet)

 

[columbus]

JUL series Day-6 BankNifty=10670 (28)

In JUL series 6UP days as follows.
UUUUUU


The Expected Zone has not moved from (10400~10900).

After 6 days of UP move continuously ,we can expect a small correction in a day or two.

Please refer Post#1 for more details.



Expected zone HIGH and LOW (range) is shown below.

Repo Rate (Repurchase Rate)
Repo rate is the rate at which banks borrow funds from the RBI
to meet the gap between the demand they are facing for money
(loans) and how much they have on hand to lend.If the RBI wants
to make it more expensive for the banks to borrow money, it
increases the repo rate; similarly, if it wants to make it cheaper
for banks to borrow money, it reduces the repo rate.
At present REPO rate stands at 8%.
(Source:Internet)

 

[columbus]

JUL series Day-7 BankNifty=10602 (-68)

In JUL series 6UP and 1DOWN days as follows.
UUUUUUD

The Expected Zone moved downwards from (10400~10900) to
(10300~10900)

The expected zone is intersection of CALL and PUT windows.Today's zone
is shown in YELLOW colour ,yesterday's zone is indicated by LINE window.

CRR
Also called the Cash Reserve Ratio, refers to
a portion of deposits (as cash) which banks have to keep/maintain with
the RBI. This serves two purposes. It ensures that a portion of bank
deposits is totally risk-free and secondly it enables that RBI control liquidity
in the system, and thereby, inflation by tying their hands in lending money.
If CRR is cut ,that portion of money is released into system.The
present rate is 4.75%.
(Source:Internet)