I have bought Nifty option 4550 Call@88 !!!

Hi all,

I have bought huge positions in Nifty option 4550 Call@88 on last friday and got stuck, now Nifty option 4550 Call is @66, so down 22rs and Monday markets looks bleak, can some one guide me what should i do, is there any counter stratergy to adopt to minimize losses.

Nifty option 4550 Call@88
CMP(closing) 4550 Call@66

Hai Paisapower,

If you believe market will tank on monday simply sell your positions and buy it back later or buy another position in higher strike price.

Sankoorikal

Hi,

Thanks for the reply, but i want to know what would be my loss as i am holding 1500 Nifty option 4550 Call@88.

Any Coverup stratergies or Spreads would work?
Loss is how much if i exit on monday?

Regards,
Paisapower

I'm still trying to figure out how you bought calls on Friday when the market was tanking. IMO, expect Monday to be the same or worse.
Better to close your positions now and take a fresh position after the fall is over, in a weeks time or so, or buy puts and hope the market falls further, so that you cover the loss.

30 lots without SL

dear

its strange .........no STOP LOSS....Can't believe....
after this incidence, now you will never forget STOP LOSS....

some people are lucky by birth...
some people learn by others experience....
some people learn by their experience....
and others...........

have a nice day
JB

Here is an article from The Times of India. It may seem strange to us but lots of such folks around.

Farmers bet future on market they don’t grasp



Speculation on commodity futures has become a dangerous addiction in small towns of north-west UP. Farmers, traders & labourers are going broke, some even killing themselves. But the betting goes on...


Avijit Ghosh & Prabhakar Sinha | TNN



Sambhal: It’s a small cubicle, barely six by eight feet. It’s crowded inside with everyone’s eyes fixed on the red and blue markers on the computer screens. It’s as if they are watching the slog overs of a pulsating one-day cricket match. Only, this is no game—it’s people tracking the fate of their money invested in commodities.
This isn’t a big city and these men are not the usual punters. They are traders, small farmers and even labourers speculating on the futures commodity market that has become a collective and dangerous addiction for thousands in this small town in north-west Uttar Pradesh.
Many such investors can’t read or write and are totally unaware of the modalities that govern futures trading. Even cricket betting, if allowed, would be more informed for them. Yet lured by the prospect of making a fast buck, they put their hardearned money on commodities ranging from pulses, potatoes, gold and crude oil, to natural gas and zinc. The itch to gamble is irresistible even though it has devastated many. Of course, the exchange itself cannot be blamed if someone makes a bad investment decision.
Many of those who spoke to TOI claimed to have lost sums ranging between Rs 1 lakh and Rs 5 lakh in the commodity market. At least two persons in Sambhal town have committed suicide due to the losses suffered in the last year. Others have barely survived. House painter Mohammed Nabi lost Rs 3.5 lakh and his sanity—now he is a cart puller (see box inside). Another regular, Nathu Singh, had to sell his house to pay off debts.
But few lessons have been learnt. “Addictions,’’ said Joseph Frascella of the US National Institute on Drug Abuse to Time magazine recently, “are repetitive behaviours in the face of negative consequences, the desire to continue something you know is bad for you.’’ It’s no different with hundreds in Sambhal.
But this is not just Sambhal’s story. “In several other small towns and qasbahs such as Amroha, Chaundasi, Moradabad, Bahjoi and Rampur, people are trading in the futures commodity market. It’s almost like playing blind in a card game,’’ says jeweller Anil Kumar Rastogi, who himself has lost over Rs 3 lakh.
It wasn’t always like this. Sambhal is a Muslim majority town located 150 km east of Delhi that used to be part of Mulayam Singh Yadav’s Lok Sabha seat. Situated at a rail terminus, it has traditionally been a trade centre for agricultural produce. The town’s fortunes changed for the better after mentha grass was introduced in the area 15-20 years ago.
The oil and aroma produced from the grass is used for medicine, food flavours, cosmetics, beverages and menthol-based lozenges. Soon, small distilleries and manufacturing units came up, ushering in big money. In no time, Sambhal became one of the most important centres for producing mentha oil in the world. “There was a time when a profusion of Sumos often jammed the town’s narrow streets,’’ says a local. “Now there are only a few.’’

dear friend please remember that this week the market fell and rose so much, so implied volatility is also higher, u are a victim of high IV
and secondly always keep a delta neutral trade, which means you must hedge your position

so now you have 30 long calls.
DON'T buy puts now they will be expensive, and straddles and strangles( buying puts and calls together)have breakevens that are too far fetched.
if you really feel that the market will fall further than on monday itself sell 4500 aug, NOT if market is positive.wait for the market to fall about 60-70 points(hope it does) in about 2 or 3 days and then square off both.your losses will be minimized.Even if market just stagnates at these levels then book the loss in your long call and keep the short call, as it wil expire out of the money, and you can kepp your premium recieved.
Contraraian thinking, like you have done by taking long calls should be at the end of a trend, use ADX to see how strong we are.I frankly DON't know where the market is goin. My colleagues at Angel broking say its gonna resume upwards in august itself, other are saying bears are out in the open blah blah blah.
AND YES THE ADVICE I'VE GIVEN YOU IS THEORETICALLY THE WORST,BUT ITS POSSIBLE, I GURANTEE. AND RISKS ARE INVOLVED,PLEASE COPY THIS MESSAGE AND SHOW TO YOUR BROKER OR ANALYST AND ASK HIM TO CALCULATE YOUR EXACT BREAKEVENS AND RISKS INVOLVED

i'l tell you my strategy if it helps
i bought september calls 4500 @ 99, plus i sold this month 4500 calls @ 66 a day before(on thursday) when IV was higher , its called butterfly or diagonal whatever, i don't care abt names.
i did this bcoz i think by september the market should recover, but i might be wrong too,and mainly time value is important in long positions

First of all- Dont trade options like stocks. An option quote tells you very little except what it costs! YOu need to be aware of the "greeks" of your position.


The good thing is you can get out or modify your position based on your view . First get an estimate of your "position Delta" and neutralize it going the opposite way- For example if you have 100 Shares the position delta would be 100 if- say the call option position delta ( nothing but delta of the option mutiplied by no of calls- and is usually negative number) you should buy equivalent shares.

I am assuming you dont have too much capital- and in your situation- it is best to convert your position into a vertical spread ( either credit or debit depending on your current view).

Please dont buy straight calls and puts unless you understand these fundamental things- you might as well help a poor guy across the street.