Trending F&O Stocks

stockBond

stockBond

Well-Known Member
#42
#42
Riskyman said:
I'm mostly a positional trader when it comes to stocks so i tend to look at charts on the daily/weekly TF. Here is a chart of Bharat forge. A lot of damage has been done with the stock falling from 1300 to 900. Presently, stock is taking support at previous low made in Jan 2015.

Price/volume divergence telling that much of the selling is done with and the stock could bounce, specially if the earnings turn out well. However, I would not want to buy it now so will wait for a good pullback towards the support zone. Also, buying futures is not making sense for this trade as Im looking at this trade from a 2-3 month perspective. So maybe buying 1050 calls for December is a better idea. Risk will limited to the premiums I put down.

Click to expand...
December calls won't be liquid dude. You will loose out on spread.
 
Riskyman

Riskyman

Well-Known Member
#43
#43
bapu4 said:
Hi Risky bhai,
I was curious how buying 1050 ce Dec because even if you buy it in nov the the premium will be too high ,how do you manage the trade in that case without spending further...kindly enlighten.
There are many a times such opportunities which call to buy/sell options of far months,for eg there is expectation that there is going to be a deep correction to 7500 and below in Nifty some where in nov dec.2015 so i wud like to buy aPE of DEc '15 but the premium is hefty,now I wana buy it at lowest (minimum possible premium) how to go about it?or I sell
CE ?
Similarly how to go about(buying) other stock PE/CE of farther months at lowest possible premium ?
RGDS
Click to expand...

Far months premiums are never cheap so dont go looking for it. Also you have to factor in time decay when you take far out positions . The only thing that saves you is when your trade becomes ATM or goes deep in the money.
With reference to bharat forge, like i said, I would buy it only if there is a pull back to support area. Im looking to play for the bounce. If I buy close to support and if support breaks, then I have a choice of reversing my trade to the downside.

As far as your question about premiums being expensive... Well you can also sell options if you sure about the direction of the trade. Higher premiums are good if you want to sell. For example.. If you are bullish on Bharat forge and you expect it to go towards 1050 by dec, then you can sell puts.. There are plenty of things you can do apart from buying just naked calls.
 
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Riskyman

Riskyman

Well-Known Member
#44
#44
JSW STEEL DAILY (SPOT)



JSW STEEL HOURLY (SPOT)



On closing, Max OI pe side was at 900 with 40500 and Max OI Ce side at 82,250.
Should put some pressure on PE writers if 900 breaks.
 
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