NIFTY Options Trading by RAJ

[travi]

thanks ravi bro ...:thumb:
but this file not give any IV figures I think

See, you wish came true.

From morning, the calls were in heavy demand bcos those naked optins traders were buying calls and making money while hedgers doing same.
So calls had high IV, means expensive price.

Now, with 12:10pm sell-off, ppl started dumping calls and running for puts.
IV has reversed now and puts are in demand.

IF you see "-", means IV is basically like 0 and option is trading dirt cheap
In auto sheet you can see IV.

Once you understand Greeks, you will know what is happening to them only by looking at Futures chart

Eg. Just like you know, when BNF going up, puts are falling and calls are rising.

So if you know, delta is 0.5 at ATM and 3-5 strikes away its 1 & 0.1,

1. A 20pt move will have 10pt move in price of ATM option.

2. Keep the max pain value in mind and see if that changes, bcos naked eye can't compute that fast.

3. Else OI/C_OI also moves in relation to underlying.

Biggest challenge is NSE gives this data with around 3m delay so not useful for scalping but very good for higher TF 15m onwards (swing/pos etc).

 

[nikhil.daiya]

can anyone share the latest Nifty OAT & BANKNIFTY OAT files with me. The one I am having does not refresh the data even after changing expiry date. Thanks in Advance

 

[travi]

can anyone share the latest Nifty OAT & BANKNIFTY OAT files with me. The one I am having does not refresh the data even after changing expiry date. Thanks in Advance

You should read the earlier posts properly

Use my link http://www.mediafire.com/file/030dglhzlx78djd/OAT_orig.zip

 

[VJAY]

I have changed the date to 25/jan/17 , now itis working for Jan 17 also ....below the link...
https://www.mediafire.com/?3d2z37zahttartt

Dear mmca,
When I open file this circular error coming though its not effects in data.see image
and also pivot sheet not updating ...is this the reason for error?

 

[travi]

Dear mmca,
When I open file this circular error coming though its not effects in data.see image
and also pivot sheet not updating ...is this the reason for error?

Vijay Bhai, just click ok and ignore it. happens when data cells go bank.
For pivots,
You can enter the Prev Close, Open high low in the cells to calculate pivot.
Scroll down to Cell B98

The file linked by mmca is different, not OAT Nifty.

 

[Option.Trader]

See, you wish came true.

From morning, the calls were in heavy demand bcos those naked optins traders were buying calls and making money while hedgers doing same.
So calls had high IV, means expensive price.

Now, with 12:10pm sell-off, ppl started dumping calls and running for puts.
IV has reversed now and puts are in demand.

IF you see "-", means IV is basically like 0 and option is trading dirt cheap
In auto sheet you can see IV.

Once you understand Greeks, you will know what is happening to them only by looking at Futures chart

Eg. Just like you know, when BNF going up, puts are falling and calls are rising.

So if you know, delta is 0.5 at ATM and 3-5 strikes away its 1 & 0.1,

1. A 20pt move will have 10pt move in price of ATM option.

2. Keep the max pain value in mind and see if that changes, bcos naked eye can't compute that fast.

3. Else OI/C_OI also moves in relation to underlying.

Biggest challenge is NSE gives this data with around 3m delay so not useful for scalping but very good for higher TF 15m onwards (swing/pos etc).

There is lot of wisdom in what Raj had theorized on Options earlier. Many of his observations hold lot of value for people interested in forming strategies on them... i dont think anyone had even thought of these before and greatness lies in openly sharing.. a few things that i noticed.. thanks to travi for sharing the file

Date Nifty Max Pain CHGOI
1/5 8235 8200 8000-8300 Sustaining here, indicated a 250 point move
1/9 8233 8200 8000-8400
1/10 8285 8200 8200-8500
1/11 8386 8250/8300 8300-8500 Ideal to write 8300PE as Max pain level changed
1/12 8397 8300 8300-8500
1/13 8398 8300 8300-8400
1/16 8412 8300 8400-8600
1/17 8400 8300 8300-8500
1/18 8420 8300 8450-8500
1/19 8420 8350 8400-8400 write 8400PE as Max pain shifted
Max pain gives early indication of levels if changed... along with CHGOI (daily), OI could be used to write safely

 

[travi]

There is lot of wisdom in what Raj had theorized on Options earlier. Many of his observations hold lot of value for people interested in forming strategies on them... i dont think anyone had even thought of these before and greatness lies in openly sharing.. a few things that i noticed.. thanks to travi for sharing the file

Date Nifty Max Pain CHGOI
1/5 8235 8200 8000-8300 Sustaining here, indicated a 250 point move
1/9 8233 8200 8000-8400
1/10 8285 8200 8200-8500
1/11 8386 8250/8300 8300-8500 Ideal to write 8300PE as Max pain level changed
1/12 8397 8300 8300-8500
1/13 8398 8300 8300-8400
1/16 8412 8300 8400-8600
1/17 8400 8300 8300-8500
1/18 8420 8300 8450-8500
1/19 8420 8350 8400-8400 write 8400PE as Max pain shifted
Max pain gives early indication of levels if changed... along with CHGOI (daily), OI could be used to write safely

Also, don't forget to check with IV levels.

When IV levels are low, and you expect volatility to increase in a certain period, buying options is better.
Eg. in BN, a 5% (which is small) jump in IV can cover theta loss of 3-4 days so writers can get screwed there.

Through the period of sample data above, IV has been mostly below AV.

 

[VJAY]

Dear Ravi bro,
Thanks for sharing and helping insights about options here .can you please eloberate more about IV using data above said ?

 

[Option.Trader]

Also, don't forget to check with IV levels.

When IV levels are low, and you expect volatility to increase in a certain period, buying options is better.
Eg. in BN, a 5% (which is small) jump in IV can cover theta loss of 3-4 days so writers can get screwed there.

Through the period of sample data above, IV has been mostly below AV.

I've not been able to make sense of IV in indian markets. For eg, I've only made money by writing pairs ... only 1/4 chances provides money through buying...maybe i'm more tuned to writing...

 

[travi]

I've not been able to make sense of IV in indian markets. For eg, I've only made money by writing pairs ... only 1/4 chances provides money through buying...maybe i'm more tuned to writing...

Being short of time, I'm just quoting an excerpt from HealthRaj Bhai's Summary.
Its an R:R thing, when IV is low and you write options, its like having a bad R:R, chances are risk is 2x.
I'll try and post in detail later.

The way option buyers have Theta (Achilles Heel), Option writers also have to manage Vega.
That's why options ideally are written as early as possible, generally 1 or 2 expiries ahead.

TRADING IN OPTIONS - MY CHANGE IN UNDERSTANDING COMPARED TO JUL-13.

One obvious thing which I may be overstated and overemphasized was the Credit Spreads. I was always for Credit Spreads because it worked very well in JUL-13 and which gave good Results in JUL-13, when the VOLT was FLAT and market was Going UP.

Credit Spreads do not work always. Basically one should not overlook the VOLT and its influence on Options. High VOLT will affect the Credit Spreads very badly.

So at the end of the Day we have to be find out whether to go for Debit Spreads or Credit Spreads. One might be confused whether to go for Debit Spread or Credit spread because it is not something to do with the Direction of the market but a function of VOLT.

So those who are Trading with Options, you should first have view of where the VIX or VOLT is heading and correspondingly Take the Credit or Debit Spreads.