Day Trading Stocks & Futures

[Tuna]

:lol: :thumb:



discussed in my thread..aaisa to hona hi tha,, woh 30% shifted to weekly options. I m one of them..Slippage increased in futures since weekly options introduced..breakeven increased...



Traders main aim is to earn money, they always shifted to better options...

unless govt reduce the huge tax on nifty futures, more traders are bound to shift to options.. tab govt ko malum parega..

Abhi GST lag jayega to Service Tax 18%?:annoyed:

This is indeed $hit. Can't believe the loot what is going on in the name of charges.


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[Tuna]

Day trading Nifty & Stock Futures

Heady (and other option traders): I have a question. Suppose on my Intra Multi lot I am trading with 12 lots of NF future, my RR is 2 (8 and 16 points).

Now if I have to move to options (Long only, CE or PE) - how many Lots I need, considering I book loss/profit (w.r.t Future movement at same scale 8 or 16). I am sure it does not work in this way specially near to expiry where an ATM becoming a OTM even by 8 points will bleed or if IV is changed. But still is there any tool or excel I can calculate this?

 

[headstrong007]

Heady (and other option traders): I have a question. Suppose on my Intra Multi lot I am trading with 12 lots of NF future, my RR is 1.5 (8 and 16 points).

Now if I have to move to options (Long only, CE or PE) - how many Lots I need, considering I book loss/profit (w.r.t Future movement at same scale 8 or 16). I am sure it does not work in this way specially near to expiry where an ATM becoming a OTM even by 8 points will bleed or if IV is changed. But still is there any tool or excel I can calculate this?

I can't exactly comment on this.. as I trade on weekly options.
Only 5-6 day premium attached with it.

But I can share some idea...To generate maximize points along without compromise on liquidities..
I target Rs 60-120 options for Buying and 120-220 for Selling.

For example, today my buying instruments 21700CE,21400PE... Intra Selling instruments 21500 CE, 21600 PE,, ALL next wk options due to exp today..

 

[dreammerchant]

Re: Day trading Nifty & Stock Futures

Heady (and other option traders): I have a question. Suppose on my Intra Multi lot I am trading with 12 lots of NF future, my RR is 2 (8 and 16 points).

Now if I have to move to options (Long only, CE or PE) - how many Lots I need, considering I book loss/profit (w.r.t Future movement at same scale 8 or 16). I am sure it does not work in this way specially near to expiry where an ATM becoming a OTM even by 8 points will bleed or if IV is changed. But still is there any tool or excel I can calculate this?

Tuna, if u r looking to replace your futures with options go with ATM CE/PE...

I'm doing that only, I'll go with 4 lots of ATM options whose net delta will be around 1.6 to 2, which is higher than future. (for every 1 point of future movement we'll have 2 points of movement in options all together)

Price range of ATM option will be 50 to 100.

In this case your maximum investment is not more than 20k and u have the liberty of taking it for delivery.

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[manish9300]

Re: Day trading Nifty & Stock Futures

Heady (and other option traders): I have a question. Suppose on my Intra Multi lot I am trading with 12 lots of NF future, my RR is 2 (8 and 16 points).

Now if I have to move to options (Long only, CE or PE) - how many Lots I need, considering I book loss/profit (w.r.t Future movement at same scale 8 or 16). I am sure it does not work in this way specially near to expiry where an ATM becoming a OTM even by 8 points will bleed or if IV is changed. But still is there any tool or excel I can calculate this?

At the money option will give you about 3 points for a 10 point move in future in your favour and will give you 5 point loss for a 10 point move in future against you.The ratio gets worse for out of money options and also as expiry nears.No movement in future will almost always results in some loss if you hold option for more than an hour.

 

[pannet1]

Re: Day trading Nifty & Stock Futures

At the money option will give you about 3 points for a 10 point move in future in your favour and will give you 5 point loss for a 10 point move in future against you.The ratio gets worse for out of money options and also as expiry nears.No movement in future will almost always results in some loss if you hold option for more than an hour.

super manish.

and to add on the positive .. if your target/stop loss hitting is getting delayed .. you could close out the options in part .. a privilege .. you will not get with futures .. unless .. it has many lots

- courtesy
dream merchant

 

[travi]

For those who have mechanical trading systems in EQ or Fut, it still beats me how they'll replace Fut with options.
A simple challenge mimicking the above, is how does one place an SL?
1-2% rule of Trading Capital on an options trade sure as hell doesn't work.

Oh my SL in Fut used to be 10pt, so i'll take ATM option and put 20pt SL.
Then on some days one opens terminal in the afternoon and sees underlying has moved 5pts and SL is hit.
Theta is not just overnight and IV has no formula.
so apart from get direction right, which in itself is the toughest job, now u have to go figure if IV is gonna jump or theta will kick in and how many days to expiry etc etc

 

[Tuna]

Day trading Nifty & Stock Futures

One option could be 50% rule , Expect 50% decay in total value. So if ur SL and Size on Fut result a 5k loss, u can buy 10k worth options. Profit will be restricted but SL will be respected. Thats the thing I tried last time. The funny part , if you buy ATM during low IV and BB squeeze, a directional blast in favour of ur entry will exceed ur RR by leaps and bound. But downside is limited. I am advocating only CE or PE longs , no selling. But doing an 1:1 mapping with Future trading SL TGT for option trading. - I guess not possible


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[travi]

Ravi bhai, your inputs :lol::lol:
I guess no one would've played around with options as much as him.
IF he has moved from options to Fut, there must be something to learn for us.

 

[Tuna]

Me too bro- Future to Option to Future


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