Advanced Options Strategies

optionity · #1 3rd October 2007, 07:53 PM

Folks, I have just registered in this forum. I thought we could discuss about advanced strategies using options in the indian markets. I have a considerable background trading options in the US markets. I have relocated to Chennai and I am in the process of developing a website for options trading in India. I would be happy to share any info. about trading queries as well as I could also learn from other's experiences.
Happy Trading !!!

ranj_2k · #2 3rd October 2007, 08:04 PM

I am trading in Options but not having technical knowledge about the same. It is just guessing. Some times I gain some time there are losses. I would like to learn about the option trading from you. I am holding 5300 PE Oct @ Rs.180. Pl advise. I would also like to know the methods where I can hedge my positions of Future or CA/PA. Any other methods where chance of losses are minimum and to get maximum gain.

rkkarnani · #3 3rd October 2007, 08:45 PM

Quote:

Originally Posted by optionity

Folks, I have just registered in this forum. I thought we could discuss about advanced strategies using options in the indian markets. I have a considerable background trading options in the US markets. I have relocated to Chennai and I am in the process of developing a website for options trading in India. I would be happy to share any info. about trading queries as well as I could also learn from other's experiences.
Happy Trading !!!

There are a few VERY GOOD threads under options, please go through them, should be helpful.

Krishnan1980 · #4 3rd October 2007, 11:24 PM

I am an options trader. I believ in buying deep calls and deep puts 9Volatility is money). My fav for last six mnths has been IFCI& RNRL for calls and Infy and Satcom for deep puts. ?ever now iam excited abt TTML & Balchi can anybody update on TTML deep calls. I beieve in Straddles for NIFTY as the volatility has been generally high. pls share other extremely volatile stocks in options. and also your expert views

Thanks in advance

viratdg · #5 7th October 2007, 12:21 PM

Hello all,
Options market is one of the most interesting market, it has limit of loss... & profit which can go rocket sky. But i still have doubts on whether a person will buy a call or put or <sell a call/put> when the premium gets over SPAN margin...

For e.g - DLF 780 call rose from rs.20 rose to top of @ 120 in next day in when it rose rs.100 from its strike price.

My question SPAN margin is near 45k to 50k, will bang more then SPAN margin in Options.

Experts please advise.

optionity · #6 7th October 2007, 06:47 PM

Mr. Krishnan,
The ideal time to buy straddles is when the vols. are low (you anticipate the vols to go up) so you don't shell out a ton for the premiums. Straddles are ideal for options that have 60 days or more to expiration so you give time time for the breakout to occur. To find great straddles :

Look for a consolidating market (wedge formation in price graphs)
Find if options are cheap (check Imp. Vol. relative to historical vol.)
Find if options have 60 days or more to expiration
Enter before the possible breakout (upcoming coming announcements, Govt. data, etc.)
Exit position 30 days to expiration (because of theta risk, an option loses 80% of its time value 2 weeks prior to expiration).

One good technical indicator to look for low vols. and price consolidation is bollinger bands. Look for bollinger bands that are contracting to a point where the daily range of the stock is close to touching both the upper bands and lower bands. This indicates that the stock is tightening and will propel itself into one direction. Happy Trading!

tulika · #7 7th October 2007, 07:52 PM

but dear optionity ,, in india most next month options are not liquid enough to be traded... so v hv vry less time in hand.. so i think it is a risky business to jump into ,unless one has enough knowlegde about opton trading.. not as simple as it seems ..but definitely vry interesting and rewarding wen understood properly.
tulika

Krishnan1980 · #8 10th October 2007, 01:28 AM

Thanks a ton

that was insightful.

But my style of investing is not into technicals of stock.

I study financial papes and blogs and look for triggers especially news triggers.

So once i have a decision trigger and ub\nderstand that the average volatility is high on an average. I would confirm myself that the price will go up or down constantly.

For ex: the next trigger is infy, if the results posted i better or even matches analyst expectation the stock would shoot up. If the results are bad then there is high possibility of the markets to come back to lesser valuations.

So i would say a trigger is what dcides on a specified day to indicate the option price

I always trade on options only during the first two weeks of the month then i shift myself to futures.

Please provide me with opinions on the above strategies and also give me an insight on how to trade on options which are just about expiry.

Thanks and regards

ghosh_ak34 · #9 16th October 2007, 09:37 PM

Dear Friend,

Whats your views on SBI 1980 CA@48? i think it will give good returns before expiry. SBI results are expected to be good. These are my views only.

Regards

rkkarnani · #10 16th October 2007, 10:07 PM

Quote:

Originally Posted by ghosh_ak34

Dear Friend,

Whats your views on SBI 1980 CA@48? i think it will give good returns before expiry. SBI results are expected to be good. These are my views only.

Regards

With the P Note circular from SEBI being projected by CNBC as a BIG negative for Mkt....u may get the Call at much lower tomorrow..