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Help in Learning/Trading in NIFTY

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  #1  
Old 25th June 2006, 06:29 PM
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krishnamurthyu is on a distinguished road
Default Help in Learning/Trading in NIFTY

Hello Respected Borders,

I am very new to Option trading .Trying to gather more info on option trading ,from past couple of days i am collecting data. Pls help me to trading in Nifty .I have following doubts.

1.IS INDEX Options is Better than Stock Options :: I have big confusion over this. I have come across articles saying INDEX Options are better to trade than Stock.
a) How valid is this observation ?
b) what are the underlaying reasons for this statement ? i.e Liquidity
c) Shall we always stick to trading in Nifty only, what are the condition one shouldn't trade on Index options

2. How does NIFTY CE ( Call Options) trading works.
Ex.
On 1/07/2006 NIFTY CE Strike-3000 | Price-50 | Exp- 27/7/2006 [ Breakeven : 3050 ]
After 10 Days ,If nifty spot is trading at 3200
on 10/072006 NIFTY CE Strike 3200 | Price -150 | Exp-27/7/2006

Now If I want to book profit.If I excercise/square off price is based on

1.Spot price on 10/07/06 i.e 3200 . ?
2.Is it on Option preimum on 10/07/2006 i.e Rs.150 ?

3.What is the Difference B/w Square off and Exercise [ because in India there is no delivery.Hence I think both are same is it.?]

4.Gurus, What are the methods or trade secreates you are follwoing to make profitable trade.
5.Is any one of you are using Daily Bhavcopy of NSE to analyse and determine which script to use for trading.
6.I looked at couple of Online materials do any one you have good collection of PDF's that we can share .If we can put in as one collection in the forum it might help lot of us and others.
7.Can we trade in BSE Indices .BSE have couple of 6-8 Indices ,Metal,PSU,Mid-cap,Banking etc. when I enquired at 5paisa they said Index trading is avialable only for NIFTY.
8.CNXNIFTT and BANKNIFTY Options were not traded any reasons for it.?


Thanking in Advance
Murthy
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  #2  
Old 16th January 2007, 03:32 PM
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beginner_av will become famous soon enough
Default Re: Help in Learning/Trading in NIFTY

just saw this thread today...so answering so that others reading the questions may find some answers

1.a. highly valid
b. liquidity upto 3 months, no mktwise position limit, low impact cost, cant be influenced easily, easy to monitor and analyse, establishes trend easily, lower margin requirement
c. Depends entirely on u...as for options every mkt has a strategy
2. nifty is european option, can be squared off only...exercise is only at the end of the month...so answer is 2.

3. above answer clarifies. in case of stock option square off is at mkt price of options...exercise is at settlement price of the underlying

4. hard work, data analysis, risk management, reading, backtesting, emotional control

5. Yes

6. search in this forum

7. No

8. No Liquidity
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