3 Option Strategies Tested Here

narayanrk2003 · #61 23rd July 2008, 10:13 PM

Planning to take NIFTY AUG 4800 Call and 4400 Put, if it touches 4600 in the next couple of days...

Any suggestions?

Narayana Rao.

nareshch · #62 23rd July 2008, 10:32 PM

Quote:

Originally Posted by narayanrk2003

Planning to take NIFTY AUG 4800 Call and 4400 Put, if it touches 4600 in the next couple of days...

Any suggestions?

Narayana Rao.

Any specific reason for 4800C and 4400P ? Why not 4700C and 4500P ?

Naresh

kvram · #63 24th July 2008, 04:00 PM

AWACHAT sir sorry late ,for one lot square up it comes around 1.50 rs.

praveen taneja · #64 24th July 2008, 05:11 PM

Quote:

Originally Posted by nareshch

Any specific reason for 4800C and 4400P ? Why not 4700C and 4500P ?

Naresh

sir i always hedge my position but cant decide when to exit like at 4400 today i bought lot of 4200put n 4600 calls but dont know what should b my strategy to exit it is of Aug ust only for information thnx n god bless u everyone

awachat · #65 24th July 2008, 07:07 PM

Today Again I lost. Do you think I have taken any wrong stock ?
What was wrong ?

narayanrk2003 · #66 24th July 2008, 09:31 PM

Quote:

Originally Posted by nareshch

Any specific reason for 4800C and 4400P ? Why not 4700C and 4500P ?

Naresh

Hi Naresh,

Since we have 5 full weeks for expiry, i want to play with some far away strangle.

Narayana rao.

nareshch · #67 24th July 2008, 10:06 PM

Quote:

Originally Posted by awachat

Today Again I lost. Do you think I have taken any wrong stock ?
What was wrong ?

As per the prices of 4500C and 4500P , i assume you took them near 4500 . And this is a loss trade due to premium erosion .

I am not sure when did you entered 4400P and 4600C ie at What spot price . The differance is huge and you also did some capital averaging . Due to the high qty of 4600C compared to 4400P , You lost . For OTM options , i prefer nextmonth . For example , 4500 straddle for august series might have given us 30 point profit ,some time in after noon, and 10 point profit at the close . Where as July straddle lost 10 points due to premium erosion .

I think its your unrealized loss as you are calculating them with Close prices. Lets see tomorrow , but 4600C is the burden on you .

Naresh

sumeetsj · #68 24th July 2008, 11:03 PM

Quite Interesting stuff going on in here. Its really amazing. There are a few things I want to know -

While choosing a strangle / straddle what are the measures one has to take ? By measures as in what should the the price difference between premiums, how to gauge whether which premium is costlier than the other etc etc.

Thank you in Advance. This post is very educating.

nareshch · #69 24th July 2008, 11:13 PM

Quote:

Originally Posted by sumeetsj

Quite Interesting stuff going on in here. Its really amazing. There are a few things I want to know -

While choosing a strangle / straddle what are the measures one has to take ? By measures as in what should the the price difference between premiums, how to gauge whether which premium is costlier than the other etc etc.

Thank you in Advance. This post is very educating.

There is no hard set rules for premium differences . Normally if the spot price is near strike price , both call and put will have equal value . To get fairvalue of options , have to use option calcutaors . They give theoritical prices where as in market ,prices depends on various events ,news etc . So you allways see one or the other option price is over priced .

I am still trying to understand greeks of options .

When the expiry is near , I feel Straddle is better than strangle a premiums erode very fast for far OTM .

Naresh

absolutme · #70 25th July 2008, 12:15 AM

Hi Everybody,

I am a very old reader of this site but this is my first post. I've been keenly following this thread.

I made two deals today:

Bought Nifty 4500 C at 48, sold at 66 quickly between 2:00 to 3:20 pm.

Bought Relaince 2400 C for 26.00 and Reliance 2190 P for 19.30 when strike price was 2308. I'm expecting good profits tomorrow as Reliance Results have come and I've bought both call and put at low margins.

Seniors what'd you call this trade?

Amit G