Option Buy Recomendations

nitu20 · #**401** 4th July 2008, 06:24 PM

Quote:

Originally Posted by ghosh_ak34

Dear Optiontrader,

If R1~S1 <300 or >400, recommend not to trade. Trade becomes very unpredictable and chances of failure increases.

Sometime its wise not to trade. Its not important to trade everyday but its important to save your hard earned money everyday.

Choose a system of your choice. Follow its rule and stick to it. How boring a system is, stick to it, after all nobody wants to jeoperdize a winning combination.

Regards

Dear Ghosh Sir,
As I have calculated the R1 and S1 for this week, its coming at 3855 and 4170. So we should buy calls at 3850 or 3800 and puts at 4150 or 4200. And after buying when should we sell it. Should we hold it full week and sell it on Friday together (call and put together) or should we sell it separately on the days those are much high from our buy levels.
Regards

ghosh_ak34 · #**402** 4th July 2008, 08:49 PM

Quote:

Originally Posted by nitu20

Dear Ghosh Sir,
As I have calculated the R1 and S1 for this week, its coming at 3855 and 4170. So we should buy calls at 3850 or 3800 and puts at 4150 or 4200. And after buying when should we sell it. Should we hold it full week and sell it on Friday together (call and put together) or should we sell it separately on the days those are much high from our buy levels.
Regards

Dear Nitu20,

You are correct! R1 = 3855 and S1= 4170. Buy calls at 3850/3800 and puts at 4150/4200. As per the strategy exit the loss making option and hold the profit making one with trailing SL say 10-20% from the profit levels. And if your trailing SL is not hit hold the same . Buy calls and puts as per next weeks S1 and R1 and do the same as earlier. Provided R1~S1 >300 and <400.

Currently Nifty is bearish so buy more puts than calls. Recomended ratio could be 2 puts to 1 call.

Offcourse you can square off both calls and puts as per your wish. All depends on your risk appetite.

Regards

GRORICH · #**403** 4th July 2008, 09:12 PM

Quote:

Originally Posted by ghosh_ak34

Dear Nitu20,

You are correct! R1 = 3855 and S1= 4170. Buy calls at 3850/3800 and puts at 4150/4200. As per the strategy exit the loss making option and hold the profit making one with trailing SL say 10-20% from the profit levels. And if your trailing SL is not hit hold the same . Buy calls and puts as per next weeks S1 and R1 and do the same as earlier. Provided R1~S1 >300 and <400.

Currently Nifty is bearish so buy more puts than calls. Recomended ratio could be 2 puts to 1 call.

Offcourse you can square off both calls and puts as per your wish. All depends on your risk appetite.

Regards

Dear Mr Ghosh,

Let me first thank you for starting such a wonderful thread of helping fellow members. I am new to this thread, even though I have been trading options for some time now.

I tried to do some calculations as per your formula. I am getting R1-S1 = 298.9 . I have attached the excel file. Could you pleae tell me where I had gone wrong ?
Thanking you very much

Grorich

optionstrader · #**404** 4th July 2008, 10:25 PM

Hi Ghosh Sir and GRORICH ,

Following is the strategy for next week :

p= 4163 + 3848 + 4016 / 3
p= 4009

s1= 4009 x 2 - 4163 = 3855
r1= 4009 x 2 - 3848 = 4170

4170-3855 = 315
315>300=<400

So as, ghosh sir, suggested & guided, buy calls at S1 which is 3855
and puts at 4170.

Thaks Ghosh sir and nitu20,

Thanks & Regards,
Optionstrader

ghosh_ak34 · #**405** 5th July 2008, 07:53 AM

Quote:

Originally Posted by GRORICH

Dear Mr Ghosh,

Let me first thank you for starting such a wonderful thread of helping fellow members. I am new to this thread, even though I have been trading options for some time now.

I tried to do some calculations as per your formula. I am getting R1-S1 = 298.9 . I have attached the excel file. Could you pleae tell me where I had gone wrong ?
Thanking you very much

Grorich

Dear Grorish,

The weeks high,low,close data that you have posted doesn't match with that of mine. Have taken my data from icharts. Optiontrader's data matches with mine and thats the correct calculation.

Regards

sikandar · #**406** 5th July 2008, 10:47 AM

Hi
Any one back tested the above mentioned strategy? will it make consistent profit?
regards
sikandar

ghosh_ak34 · #**407** 5th July 2008, 12:57 PM

Quote:

Originally Posted by sikandar

Hi
Any one back tested the above mentioned strategy? will it make consistent profit?
regards
sikandar

Dear Sikandar,

Why don't you do the back testing yourself, why depend on others ? After all its our own money correct!

Have recomended to every one to first paper trade (or trade with small money) for 3 months atleast then, only take real trade.

If a system succeeds 60% times then, I consider thats a good system.

Regards

sankar17f · #**408** 5th July 2008, 03:49 PM

Hi gosh_ak34

kindly tell us at what point we have to sell these calls and puts. how to calculate the breakeven point.

ghosh_ak34 · #**409** 5th July 2008, 10:09 PM

Quote:

Originally Posted by sankar17f

Hi gosh_ak34

kindly tell us at what point we have to sell these calls and puts. how to calculate the breakeven point.

Dear Sankar,

Please note its Ghosh_ak34 not gosh_ak34. Have stated earlier the exit strategy. Please go though the thread starting from 26th page.

"As per the strategy exit the loss making option and hold the profit making one with trailing SL say 10-20% from the profit levels. And if your trailing SL is not hit hold the same . Buy calls and puts as per next weeks S1 and R1 and do the same as earlier. Provided R1~S1 >300 and <400.
"
Regards

sankar17f · #**410** 5th July 2008, 10:25 PM

Dear Ghosh_ak34,

Sorry for misspelling name. careful hereafter. Thanks for your prompt reply.