@Aimer
Nice to see you starting a thread about option trading. As you have gone through my thread and most probably through other option threads, you already showed that you are interested in the subject. As options are a bit like chewing gums it is some times not so easy to understand why they are priced the way they are at that certain moment we buy or we sell them. So some time is needed to get a grip on the concept of options and how they are priced. You already toke that time and congrats from my side to do that. :thumb::clapping:
You requested mentoring from me and of course from others, as there are other good option traders as well in this forum. Mentoring on a forum is time consuming and not an easy task. So I can take my time to follow your post and will do a note from time to time when needed. Real mentoring is a bit difficult and not what I can do, but helping a bit I can do.
As you did read all the posts about the option greeks in my thread, I guess that part is understood, as to explain them under different conditions is most difficult and that time again to do so I do not have.
Now to your trading idea you posted. I quickly checked the daily chart here
http://chartink.com/stocks/asianpaint.html and here the option chain
http://www.nseindia.com/live_market...t=OPTSTK&date=-&segmentLink=17&segmentLink=17 The daily chart show a typical ascending triangle in any way which is explained here
http://thepatternsite.com/at.html . But patterns are patterns and trading purely on them would be to dangerous. So using OI as an other tool gives a more neutral look at. If we now add the OI to that pattern and even take notice of the S&R levels in the end of day chart (08. Dec. 2014), we start to see why the max OI range at the moment in this share is placed between the 700 put and at 800 call. People either expect a break out through the current resistance at around 800 or a correction down to the support at around 700. The pure chart pattern loses its value through that analyzes and brings us back to what is behind the chart and not only what could be seen on the chart.
Some words to the long straddle:
http://i61.tinypic.com/dbh1u9.png and here is the end of day screen shot which shows a number which is not in line to other numbers
http://i62.tinypic.com/2n7fh4j.png This numbers (IV, move in the underlying and itm or otm option strike level) you have to understand and then it will be clear why the price of any option on your used strike levels is like it is.
IV on the call and put side are quit different. The call 810 has an IV of 36.04 where as the 810 put itm has an IV of 27.10. So if you speak about the low vola then I consider you speak from the vola from Nifty
http://www.nseindia.com/live_market/dynaContent/live_watch/vix_home_page.htm ? Kindly correct me if I am wrong and if so, then where do you get your data from to see the vola of the share?
Now if the share makes a drop back to around 750 or maybe even 700, the long put will rise in value because of getting deeper itm and it will rise in value because most probably the IV of the options could rise as it in most cases does when market moves south.
Now if you go long with an option strategy, it is better to have a bigger time frame until expiration, as time decay will less hurt you (In this case at the moment the call will be hurt as it is otm compare to the put which is itm). This is a safer way and still all opportunities to handle the trade are open. As far as I see, this way of going for the further out of month options seem to be a problem in your market in this share. Kindly correct me if I am wrong. So the question I would ask: Do you need to trade options on shares or would it be fine for you to do it on Nifty or even BNF?
Hope the above post does well for you. Today over here we got the first snow in the place I live. I love it. Take care and good trading / Dan
Edit as I see you ask about R:R for your trades:
If you spend, as you did 58 Rs x 50 = 2'900 Rs per straddle, the outcome is not predictable at the moment you enter. So any question about R:R is at the moment you enter the strategy open. Your break even points you have to know. Do you know them? Your post gives no clue about what you want to risk. Do you want to risk the whole amount, so your risk is 2'900 Rs per straddle. Now if you take this as Risk, then R is one. If you expect a reward of one, then you will need a profit of 2'900 Rs. Now on which side do you expect that to happen? On the put side or on the call side or by legging with new legs or by legging out leg/s? Even here your post says nothing atoll. That is why you may ask for live mentoring over the forum. What I guess at the moment is that you are more bearish in both examples you showed, as you in both cases bought the itm put which will add quicker value compare to what the call as a whole value can lose. If this should work to the end, then both of your shares must move down to certain levels. Further I have posted the basic in my thread about strangles and straddles, but this basics can be improved in many ways. To teach such, advanced stuff over a public forum in dept is too time consuming, at least from my side in the long run. If others want to take the time to try to do so, I will support them from time to time, but no time to do that live from over here.