Option Buy Recomendations

bandlab2 · #**551** 6th August 2008, 09:03 PM

thanks ghosh, but how does SL work in case of big gap up ? also ICICI doesnt carry SL to next day, you need to place SL orders every day

before market opened, i added more margin, so the trigger price for auto square off is pshed further.

now i have the call at 107, put at 77. net i have a gain of 10 rs. tomorrow market may go down a little and mostly trade around 4450 - 4500 levels. so the call will go down and put will go up.

i will square off when i get 50 rs profit on both together. as long as market is range bond this strategy will work fine.

i need to pay for 4 times brokerage. each is around 100 rs. any broker with cheap brokerage on options ?

ghosh_ak34 · #**552** 6th August 2008, 10:48 PM

Quote:

Originally Posted by bandlab2

thanks ghosh, but how does SL work in case of big gap up ? also ICICI doesnt carry SL to next day, you need to place SL orders every day

before market opened, i added more margin, so the trigger price for auto square off is pshed further.

now i have the call at 107, put at 77. net i have a gain of 10 rs. tomorrow market may go down a little and mostly trade around 4450 - 4500 levels. so the call will go down and put will go up.

i will square off when i get 50 rs profit on both together. as long as market is range bond this strategy will work fine.

i need to pay for 4 times brokerage. each is around 100 rs. any broker with cheap brokerage on options ?

Dear Bandlab2,

Yeah! I meant the same, recomended SL means you need to increase your margin.

Anyways, good to know that you survived from this crisis.

You can try sharekhan, anand rathi they offers less brokarages then, icicidirect.

Regards

AW10 · #**553** 7th August 2008, 01:41 AM

Quote:

Originally Posted by bandlab2

yesterday i sold nifty 4600 call at 110 and sold 4300 put at 108. what are the prospects ? i can hold for a week. today market may touch 4600. i am safe between 4830 - 4080. but my broker may auto-square off if nifty touches 4593

what shold i do on open ? go long on nifty ?

Bandlab2,
You sold the 4300-4600 strangle and you know your breakeven. You know your profit level (50 rs). Hope you know your stoploss level as well (say when u loose 30 rs on complete strangle)..
Man, you have done great trade planning. Great job. Have confidence in your plan. And just follow your plan.

In my view, your trade will get into money with each passing day as time is in your favour. If you are worried about 4600 level breaching soon then simulate the strategy to rollup the position (i.e. buyback 4600 call at loss and sell 4700 level etc).
That is adjusting your option trade.

Happy Trading.

ghosh_ak34 · #**554** 7th August 2008, 08:38 PM

Quote:

Originally Posted by AW10

Bandlab2,
You sold the 4300-4600 strangle and you know your breakeven. You know your profit level (50 rs). Hope you know your stoploss level as well (say when u loose 30 rs on complete strangle)..
Man, you have done great trade planning. Great job. Have confidence in your plan. And just follow your plan.

In my view, your trade will get into money with each passing day as time is in your favour. If you are worried about 4600 level breaching soon then simulate the strategy to rollup the position (i.e. buyback 4600 call at loss and sell 4700 level etc).
That is adjusting your option trade.

Happy Trading.

Dear AW10/Bandlab2,

What about buying 4600 call say at 111 with SL = 90.

If SL is hits then,
exit 4600 call and hold 4600 call write.
else
buyback 4600 call and write 4700 call. Hold 4600 call with trailing SL.
end

This will reduce loss if any and will give some mental peace. People exit in hurry because they could not withstand the margin pressure/risk of lossing money.

Your strategy looks good so hold till expiry with above strategy.

Regards

bandlab2 · #**555** 8th August 2008, 06:59 AM

Hi Ghosh,

normally i dont go for interwoven positions. i play only at 1 level. too many lavels ill complicate the trade. for that i have my SL at some what higher level. if my total premium is 190 rs here, i will wait till i lose aroud 100 rs. puting sl for 30 rs, 20 rs is like giving free money to the man. i dont like that. market swings 100 point in either diretion on daily basis.

since it short strangle, it manages the risk to some extent. if market goes down, call goes down but put goes up. but the rate of rise/fall may not be same.

today market will touch 4400, then i may buy 4700 call as protection on upside if premium is cheap. however my pref is stay put, dont do anything, after a week book profit of atleast 100-- if market is range bound

tradengrow · #**556** 8th August 2008, 09:46 PM

Quote:

Originally Posted by bandlab2

Hi Ghosh,

normally i dont go for interwoven positions. i play only at 1 level. too many lavels ill complicate the trade. for that i have my SL at some what higher level. if my total premium is 190 rs here, i will wait till i lose aroud 100 rs. puting sl for 30 rs, 20 rs is like giving free money to the man. i dont like that. market swings 100 point in either diretion on daily basis.

since it short strangle, it manages the risk to some extent. if market goes down, call goes down but put goes up. but the rate of rise/fall may not be same.

today market will touch 4400, then i may buy 4700 call as protection on upside if premium is cheap. however my pref is stay put, dont do anything, after a week book profit of atleast 100-- if market is range bound

Dear Bandlab2,

You are rich man. So, you can afford 100 pts up or down. But people like us could not afford so. For us Ghosh Sir's SL and his strategy are great.

But one question if you are so confident of your moves then, why you have posted your query here in first place?? Why don't you start your own thread .....??

No offense as such just putting my thoughts here.

Sorry to be offensive but I must say Ghosh Sir's thread is great for people like us and will request him to continue with it.

--Anil

optionstrader · #**557** 9th August 2008, 11:09 AM

Hi Ghosh Sir,

Following are the R1 & S1 for the next week.

4615+4362+4530/3

4500

2*4500-4615= 4385 s1
2*4500-4362= 4638 R1

4638-4385=263

253<=300

Thanks & Regards,
Optionstrader

ghosh_ak34 · #**558** 9th August 2008, 01:36 PM

Quote:

Originally Posted by optionstrader

Hi Ghosh Sir,

Following are the R1 & S1 for the next week.

4615+4362+4530/3

4500

2*4500-4615= 4385 s1
2*4500-4362= 4638 R1

4638-4385=263

253<=300

Thanks & Regards,
Optionstrader

Dear Optionstrader,

Thanks for the cals. Market is still sideways, R1~S1 < 300 so either avoid trading or trade with following strategy for sideways Nifty:

If Nifty opens with gap up and remain above 20pts till 10:30AM - 10:45 AM buy calls at S1 with SL 20-30% from your buy price. Book profit if your target is achieved or buy puts at R1 around 3:00 PM-3:15 PM and hold call for the next day with a trailing SL of say 10%.

If Nifty opens with gap down and remain below 20pts till 10:30AM - 10:45 AM buy puts at R1 with SL 20-30% from your buy price. Book profit if your target is achieved or buy calls at R1 around 3:00 PM-3:15 PM and and hold put with a trailing SL of say 10%.

Vary calls and puts nos. according to the trend. You can vary your SL depending on your comfort levels. But remember your Profit Booking % should be more an SL % i.e. if target is 40%-50% then, SL should be 20%-30% from your buy levels.

Take R1 = 4600 and S1 = 4400 for the next week.

You can also write options. Say write calls at R1 and write puts at S1 but remember the total cost of total calls written and puts written should be of equal value or near by. Writing options is always risky. I seldom prefer writing options reason being it eats money and the ROI from writing options is less.

Suppose you have written Nifty 4500 call @150 and 4100 put @150 then, option writer might have paid around 60k to 70k as margin money for a max gain of 15k. Which is 25% or lesser return. While if I use 60k or 70k in buying options I could gain more than 25% profit and that to with lesser tensions and risks. So, I recomend buying options and avoid writing options.

Regards

GRORICH · #**559** 9th August 2008, 08:08 PM

Quote:

Originally Posted by jace48

Ghosh_ak34,

Monday's high was week's high and so is Wednesdays low.
Even if I take Friday's high as week's high the calculation comes to

PS: You can use below mentioned one liner using Quick formula indicator to get above result using Weekly resolution

For low SetDez($LowBar[$Lastbar])
For Close SetDez($LowBar[$Lastbar])

You might need to disable enable Quick formula to get the result

Dear sir,
Could you pleae tell me in which softwre you could use this formula to get result.
Thank you.
Grorich

arulshare · #**560** 9th August 2008, 09:44 PM

Hi Friends, How are you. I am a new member to this website. Discussions in next. Thanks.

The Following User Says Thank You to bandlab2 For This Useful Post:
praveen taneja (8th August 2008)

The Following 2 Users Say Thank You to optionstrader For This Useful Post:
columbus (9th August 2008), praveen taneja (9th August 2008)

The Following 4 Users Say Thank You to ghosh_ak34 For This Useful Post:
absolutme (9th August 2008), optionstrader (9th August 2008), praveen taneja (9th August 2008), tradengrow (9th August 2008)