Nifty Future And Stock Option

safespeculator · #1 18th August 2007, 06:39 PM

HELLO EVERYBODY FOR THE LAST ONE YEAR I AM READING POSTS OF VARIED SUBJECTS ON TRADERJI AND OTHER FORUMS MANY A TIME I HAVE THOUGHT OF STARTING A THREAD WITH THE OBJECTIVE OF LEARNING NEW SKILLS AS WELL AS SHARING MY IDEAS/THOUGHTS WITH OTHER.
I AM AN ACTIVE TRADER IN THE MARKET FOR THE LAST 5 YEARS AND HAVE SEEN EVERY PHASE OF MARKETS INITIALLY I WAS VERY INDISCIPLNED AND ADAMANT BUT TIMES HAVE TAUGHT ME TWO LESSON TO SURVIVE IN THIS MARKET THEY ARE 1) DISCIPLINE AND 2) PATIENCE

SO ALSO I BELONG TO A HYBRID GROUP WHICH INCLUDE PEOPLE FROM ALL STRATA OF STOCK TRADING THERE ARE RETAIL INVESTOR WHO ARE HOLDING STOCKS FROM 25 YEARS, THERE ARE PURE SPECULATORS, THERE ARE PEOPLE WHO STARTED IN THE PRE HARSHAD MEHTA ERA AND HAVE LOST EVERYTHING BUT ARE STILL IN THE MARKETS OF GAINING EVERYTHING WHICH THEY HAVE LOST OUT, THERE ARE PERSON WHO ARE EXPERT IN TECHNICAL ANALYSIS/FUNDAMENTAL ANALYSIS.
I HAVE GAINED A LOT FROM THE EXPERIENCE OF THIS PEOPLE AND WOULD LIKE OTHERS, WHO HAVE LOST OUT OR HAVE NOT GAINED THEIR DUE SHARE OR ARE NEW TO THIS JUNGLE OR ARE OPERATING IN THIS MARKET TOO SHOULD GAINED FROM IT. THE MAIN OBJECT OF STARTING THIS THREAD IS MUTUAL HELP I M NOT HERE TO TEACH OR TO IMPOSE SOMETHING I AM ONLY HERE TO GIVE WAT I POSSESS AND IN TURN WANT UR BLESSINGS.
EVEN IF ONE PERSON IS ABLE TO MAKE MONEY OR IF I CAN SAVE A SINGLE FROM LOSING MONEY IN THIS MARKET I WILL THINK THAT THE OBJECT OF MY THREAD IS FULFILLED
IN THIS THREAD I WILL SHARE WITH YOU NIFTY STRATEGIES WITH THE PASSAGE OF TIME I HAVE FOUND THAT NIFTY HEDGE STRATEGIES ARE BEST SINCE THEY REQUIRE LESS CAPITAL, ARE LESS RISKY AND PROVIDE A HANDSOME GAIN OF 5 - 7%
ALSO I WILL GIVE PROVIDE SOME IDEAS BASED ON STOCK OPTIONS AS I THINK THEY ARE LESS RISKIER AND ALSO PROVIDE A GOOD RETURN.
BEFORE BEGINING AB INITIO I WOULD LIKE TO MAKE IT CLEAR THAT I HAVE SELECTED THIS INSTRUMENT BECAUSE THEY CARRY A LIMITED RISK NEVER WE WILL GO FOR UNLIMITED RISK BUT I WOULD LIKE TO REQUEST YOU ALL THAT BEFORE ENTERING INTO TRADE PLEASE THINK 10 TIMES THAT THIS IS YOUR HARD EARNED MONEY. SO ALSO EVEN I AM TRADING IN IT(DISCLOSURE).

rajeevpp · #2 19th August 2007, 11:49 AM

I have gone through your writing would like to know more into it. First question which came to me is that you have indicated that 5-7% return, can i guess it is annual return ?
Regards

safespeculator · #3 19th August 2007, 06:18 PM

Hello Buddy
When I say 5 - 7% returns it means per trade we will aim for it. It would be a positional call so we need to b patient. If the calls go wholly in our favour we ill earn 7 % if it goes partially in our favour we will atleast get 4 - 5%.
Hope I have answered your query
Bye

rkkarnani · #4 19th August 2007, 11:51 PM

A welcome thread for a novice like me who wishes to learn abt Options. I have keen interest in options.
Had paper traded on Friday :
Bought 1 lot of SBIN 1590 Call at 24.40 and sold 1 lot 1680 call at 9.20
Is my strategy correct? Would it be still better to sell one more call of 1710 at around Rs.6.60

safespeculator · #5 20th August 2007, 11:07 AM

selling option is a riskier bet and require special set of skills as compared to buying options so also the roi is less as compared to naked options but risk is also minimized in bull spread or bear spread as of when u r dealing in naked options

rkkarnani · #6 20th August 2007, 11:26 AM

Quote:

Originally Posted by safespeculator

selling option is a riskier bet and require special set of skills as compared to buying options so also the roi is less as compared to naked options but risk is also minimized in bull spread or bear spread as of when u r dealing in naked options

Sir, as stated I have only done the trade "ON PAPER" not actual. Trying to learn. As i had both bought and sold calls it was i presumed not a naked SELL. Your views please.
Regards.
-rkk
PS.: Have sold at open one lot of 1710 call at 13.40

rkkarnani · #7 20th August 2007, 12:05 PM

Sir, My view was that even if sbi touches all time high 1800, what do i loose :
(1800-1590-24.40)=185.60
(-1800+1680+ 9.20)=-110.80
(-1800+1710+13.40)=-76.60
i.e. max risk on upside 187.40-185.60=1.80
max risk on downside = 24.40-9.20-13.40= 1.80
I am in profit above 1600

Sir, is my calculation correct ????

ranj_2k · #8 20th August 2007, 01:16 PM

Dear Mr Karnani,
As per my assumption, If you got the opportunity of buying 1 lot of SBIN 1590 Call at 24.40 and sold 1 lot 1680 call at 9.20. The difference in price of your the both position at any given time is 56. So you will earn 56x250=Rs.14000 at the end of expiry. Please correct me if I am wrong? Why you are taking another call?

safespeculator · #9 20th August 2007, 01:22 PM

NIFTY IS LOOKING BULLISH
Buy Nifty 4200 Aug CE at 100 - 105 SL 79 Target 160 - 180

safespeculator · #10 20th August 2007, 05:06 PM

Quote:

Originally Posted by rkkarnani

Sir, My view was that even if sbi touches all time high 1800, what do i loose :
(1800-1590-24.40)=185.60
(-1800+1680+ 9.20)=-110.80
(-1800+1710+13.40)=-76.60
i.e. max risk on upside 187.40-185.60=1.80
max risk on downside = 24.40-9.20-13.40= 1.80
I am in profit above 1600

Sir, is my calculation correct ????

ur calculation is correct but y wanna take a naked position on 1710 CA and want to lose all ur profits if sbi moves above 1800 then u will b in unlimited losses I have given my view based on ur naked short position in 1710 CA
Hope I have answered ur query

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