My first trade in option

S

sjerry4u

Member
#1
#1
I feel market will fall by dec. and nifty wil not reach 5700. (it is jst my feeling not prediction):D
so I want to SELL put 31-Dec-2009 NIFTY stk 5,700.00 prem 53.70
my profit will be limited to 53.7*50 per lot
and i will be in loss if nifty crosses 5753.7 @ expiry..

if mkt falls then prem val will decrease(am i correct?) and i have a choice of squaring off by buying back the call.
but if mkt rises prem val will increase(?) so i cant square off without loss but if market still doesnt reach 5700 then i can still
retain prem as profit at expiry.

as i am new plz correct if i am wrong in calculations
how safe is this game, looking at current market???
do i have to pay some margin (like in intra day)???

how brokers charge brokerage on options ie.
brokerage on premium or on strike price or lot.
i use icici for trading it will be a help if any one knows icici brokerage schemes for options
 
Last edited:
R

rkkarnani

Well-Known Member
#2
#2
sjerry4u said:
I feel market will fall by dec. and nifty wil not reach 5700. (it is jst my feeling not prediction):D
so I want to SELL put 31-Dec-2009 NIFTY stk 5,700.00 prem 53.70
my profit will be limited to 53.7*50 per lot
and i will be in loss if nifty crosses 5753.7 @ expiry..

if mkt falls then prem val will decrease(am i correct?) and i have a choice of squaring off by buying back the call.
but if mkt rises prem val will increase(?) so i cant square off without loss but if market still doesnt reach 5700 then i can still
retain prem as profit at expiry.

as i am new plz correct if i am wrong in calculations
how safe is this game, looking at current market???
do i have to pay some margin (like in intra day)???


how brokers charge brokerage on options ie.
brokerage on premium or on strike price or lot.
i use icici for trading it will be a help if any one knows icici brokerage schemes for options
Click to expand...
Yes , you are wrong!!! When youare bearishon the market: Sell a Call!! You sell a Putwhen you are Bullish!!!
When you sell an option the margine is equal to the normal margine of trading in one lot of Nifty Futures!!

Your Profit on selling 5700 PUT shall be limited to the Premium you earn, and you loose rupee for a rupee for any close below 5700. Your BEP shall be 5700 less 53.70 (not considering the brokerage stt etc.)

If you like u may gothrough the basics of Options at this link :
http://tinyurl.com/czz7uk
Please enter options with full knowledge, and more so when you contemplate SELLING (Writing) Options!!
All trhe best!!
 
MurAtt

MurAtt

Well-Known Member
#4
#4
gkpc said:
You got one opinion, no harm in seeking another!!! Even some seniors are prone to errors!!!
Click to expand...
Well Mr GKPC, the same applies to you too -- read what has been written and digest it, analyze it and then give your comments on whether the person is right or prone to to errors ...

Also do check up what "prone to errors" mean and what "to sometimes err" mean ...
 
krishna23

krishna23

Active Member
#5
#5
bearish...buy a put option or as RK put it sell a call...
my advice ,since u seem to be new to options buy a put or even better do a put spread ie BUY 5100 PE 31 DEC 09 & SELL 4800 PE 31 DEC 09...there are many threads on debit spreads in the forum,do look at them before initiating a trade...
 
S

sjerry4u

Member
#8
#8
point taken...
I'm working on studying abt these instruments and it is
little too soon to start a serious trade for me...
but then there is always a first step...
pls suggest me other options :)
 
P

ppmatkari

Member
#9
#9
1) Develop a view based on solid (fundamental or technical) analysis rather than predicting blindly or based on intuition.
2) Read about options strategies, when to use, risks & rewards associated, all in detail.
3) Practice on paper or with smaller amount at first.
4) Take only those positions which you can manage in the worst case scenario.
5) Minimize losses & extend profits.

Here's a link where you can learn & simulate (strategy screener) various option strategies ---

http://www. optionseducation .org/advanced/index_options_4.jsp (remove spaces before & after optionseducation)
 
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