Traderji.com


NIFTY Options Trading by RAJ

Discuss NIFTY Options Trading by RAJ at the Trading Diary within the Traderji.com; Rule 6: In the CHG in OI, what if we get Negative values? What signals ...


Go Back   Traderji.com > METHODS & STRATEGIES > Trading Diary


Trading Diary Share and discuss your trading strategies here.


View Poll Results: How do you use OAT tool?
For Intraday Naked Options trading 43 34.40%
For Intraday Pair trading of Options 22 17.60%
For Intraday Futures trading 14 11.20%
For Positional Naked Options trading 29 23.20%
For Positional Pair trading of options 25 20.00%
For Positional Futures trading 10 8.00%
To trade in Cash market 10 8.00%
Overall trading has improved with OAT 20 16.00%
Understanding of Options has improved with OAT 52 41.60%
Multiple Choice Poll. Voters: 125. You may not vote on this poll

Reply
 
Thread Tools
  #11  
Old 22nd July 2013, 05:53 PM
healthraj's Avatar
Member
 
Join Date: Dec 2009
Posts: 4,300
Thanks: 3,337
Thanked 10,693 Times in 3,278 Posts
healthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond repute
healthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond repute
Default Re: NIFTY Options Trading by RAJ

Rule 6: In the CHG in OI, what if we get Negative values? What signals does it give?

If we get the Negative values in "CE", that means Market makers (BEARS) are squaring off the Call Positions (The SHORT Positions). So heavy squaring off in CE is a BULLISH signal and we have to expect a BREAKOUT if there is a sudden spike in the squaring volume. There is a panic situation. Normally this will happen all of a sudden in say 10-20 minutes and we have to exit the Shorts immediately and can GO LONG.

It is the Vice versa if we get Huge Negative Values in "PE".

If we get Negative Values both in PE and CE, then blindly SELL the OI pair

Small negative values indicate the normal profit booking.


Advertisements


Last edited by healthraj; 22nd July 2013 at 08:53 PM.
Reply With Quote
The Following 9 Users Say Thank You to healthraj For This Useful Post:
anup0212 (7th September 2013), augubhai (23rd July 2013), descartes (15th August 2013), gmt900 (22nd July 2013), manishbaba (23rd July 2013), niftytaurus (21st August 2013), novicetraders (22nd July 2013), Relish (22nd July 2013), srichakra (23rd July 2013)
Advertisements
  #12  
Old 22nd July 2013, 06:09 PM
healthraj's Avatar
Member
 
Join Date: Dec 2009
Posts: 4,300
Thanks: 3,337
Thanked 10,693 Times in 3,278 Posts
healthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond repute
healthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond repute
Default Re: NIFTY Options Trading by RAJ

Rule 7: OK. For Intraday trading, based on the "CHG in OI" I got the Bullish or Bearish signal. Can I go and BUY the Options? How do I decide whether to BUY/SELL the option?.

Important and a Difficult question.

Unless if it is a Strong BULL or a STRONG BEAR, the Safe strategy would be to SELL the pair so that it is less risky. I mean if we get the Range as 5800PE and 6000CE. Then Sell 5800PE and 6000CE.

Rule 7B: No I don't want to do Pair Trading. I want to take more risk and do some naked Calls / Puts. How do I decide whether to BUY/SELL.

Use the Implied Volatility. I normally take the top (most traded) 5 Strikes and calculate the Average PE and CE volatility.

Also find out the Historic Volatility of the underlying Futures.

Let us take NIFTY and say we have

Historic Volatility HVOLT= 21.18% (Get it from the NSEindia.com - FOVOLT.csv)
Average PE VOLT - 18.78%.
Average CE VOLT - 19.4%.

So the observations are

PE VOLT < HVOLT - Low Volatile market
CE VOLT < HVOLT- Low Volatile market


So in a Low volatile market, and if the signal is Bullish, then instead of the Buying Calls, SELL the Puts and vice versa.

Note : I am still discovering and learning about the Volatility. So will give more details when it comes. But in summary, if the Volatility is Low, then it is a Buying market and if the Volatility is High it is a Selling market. Experts should be able to throw more light on volatility
Reply With Quote
The Following 14 Users Say Thank You to healthraj For This Useful Post:
anup0212 (7th September 2013), descartes (15th August 2013), Gaur_Krishna (31st July 2013), gmt900 (22nd July 2013), Happy_Singh (22nd July 2013), lasty66 (24th July 2013), maneverfix (22nd July 2013), manishbaba (22nd July 2013), novicetraders (22nd July 2013), shrividhya srinivasan (22nd July 2013), smartrader (23rd July 2013), srichakra (23rd July 2013), trader_ks (14th September 2013), vijayhogade (18th August 2013)
  #13  
Old 22nd July 2013, 06:21 PM
Member
 
Join Date: Jul 2013
Posts: 143
Thanks: 504
Thanked 123 Times in 67 Posts
maneverfix will become famous soon enoughmaneverfix will become famous soon enough
Thumbs up Re: NIFTY Options Trading by RAJ

Thanks for detailed explanation, till now options market was bit of mumbo-jumbo for me, this will help .
Reply With Quote
The Following 2 Users Say Thank You to maneverfix For This Useful Post:
healthraj (22nd July 2013), manishbaba (23rd July 2013)
  #14  
Old 22nd July 2013, 08:25 PM
Member
 
Join Date: May 2012
Posts: 1,009
Thanks: 513
Thanked 1,687 Times in 662 Posts
Option.Trader has a brilliant futureOption.Trader has a brilliant futureOption.Trader has a brilliant futureOption.Trader has a brilliant futureOption.Trader has a brilliant futureOption.Trader has a brilliant futureOption.Trader has a brilliant futureOption.Trader has a brilliant futureOption.Trader has a brilliant futureOption.Trader has a brilliant futureOption.Trader has a brilliant future
Default Re: NIFTY Options Trading by RAJ

Quote:
Originally Posted by healthraj View Post
How do I reserve ? It seems to be TJ special rights? Can the TJ moderators help here?
You just open up multiple blank post (albeit a placeholder)and since you have initiated it you can modify it as we go along... i see that you have already done that with 7 rules... maybe you can keep the rules in these seven posts going forward so that these are easily accesible.

this is a much cleaner way to discuss only on the strategy.. i think we surely have something going here.. also encourage you to actually track the pairs that you suggest so that it gives an idea of P/L in terms of points...
Reply With Quote
The Following 4 Users Say Thank You to Option.Trader For This Useful Post:
gmt900 (22nd July 2013), healthraj (22nd July 2013), maneverfix (23rd July 2013), mastermind007 (22nd July 2013)
  #15  
Old 22nd July 2013, 08:33 PM
healthraj's Avatar
Member
 
Join Date: Dec 2009
Posts: 4,300
Thanks: 3,337
Thanked 10,693 Times in 3,278 Posts
healthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond repute
healthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond repute
Default Re: NIFTY Options Trading by RAJ

Rule 8: Respect the Strike Price where the MAX Pain is situated

The Strike where the MAX Pain is like the Centre of Gravity. So especially during the Expiry the market will try to move and will try to expire around the MAX Pain. So in the last week of expiry one should avoid any OTM call around the MAX Pain because the OTM calls around the MAX Pain will expire worthless.

For Example in Jul13 Expiry the MAX Pain on 22-Jul-13 is at 6000. So any 6100, 6200,... Calls will expire at Zero value. Similarly for 5900PE, 5800Pe, etc,,,

Last edited by healthraj; 22nd July 2013 at 08:44 PM.
Reply With Quote
The Following 6 Users Say Thank You to healthraj For This Useful Post:
anup0212 (7th September 2013), descartes (15th August 2013), gmt900 (22nd July 2013), maneverfix (22nd July 2013), manishbaba (23rd July 2013), novicetraders (22nd July 2013)
  #16  
Old 22nd July 2013, 09:10 PM
Member
 
Join Date: Aug 2011
Posts: 482
Thanks: 2,179
Thanked 647 Times in 341 Posts
gmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to behold
Default Re: NIFTY Options Trading by RAJ

Quote:
Originally Posted by Option.Trader View Post
You just open up multiple blank post (albeit a placeholder)and since you have initiated it you can modify it as we go along... i see that you have already done that with 7 rules... maybe you can keep the rules in these seven posts going forward so that these are easily accesible.

this is a much cleaner way to discuss only on the strategy.. i think we surely have something going here.. also encourage you to actually track the pairs that you suggest so that it gives an idea of P/L in terms of points...


I second the suggestion
Reply With Quote
  #17  
Old 22nd July 2013, 09:13 PM
Member
 
Join Date: Aug 2011
Posts: 482
Thanks: 2,179
Thanked 647 Times in 341 Posts
gmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to behold
Default Re: NIFTY Options Trading by RAJ

Quote:
Originally Posted by healthraj View Post
Rule 8: Respect the Strike Price where the MAX Pain is situated

The Strike where the MAX Pain is like the Centre of Gravity. So especially during the Expiry the market will try to move and will try to expire around the MAX Pain. So in the last week of expiry one should avoid any OTM call around the MAX Pain because the OTM calls around the MAX Pain will expire worthless.

For Example in Jul13 Expiry the MAX Pain on 22-Jul-13 is at 6000. So any 6100, 6200,... Calls will expire at Zero value. Similarly for 5900PE, 5800Pe, etc,,,
Please exlain the concept of MAX PAIN
Reply With Quote
  #18  
Old 22nd July 2013, 09:32 PM
healthraj's Avatar
Member
 
Join Date: Dec 2009
Posts: 4,300
Thanks: 3,337
Thanked 10,693 Times in 3,278 Posts
healthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond repute
healthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond reputehealthraj has a reputation beyond repute
Default Re: NIFTY Options Trading by RAJ

Quote:
Originally Posted by gmt900 View Post
Please exlain the concept of MAX PAIN
The below link has chart on Option Pain. It also has the Options Chain data. However I do not follow this link. Just for your information.

http://www.traderscockpit.com/?pageV...chain-analysis

Definition from Investopedia
http://www.investopedia.com/terms/m/maxpain.asp
Reply With Quote
The Following User Says Thank You to healthraj For This Useful Post:
gmt900 (22nd July 2013)
  #19  
Old 22nd July 2013, 10:22 PM
Member
 
Join Date: Aug 2011
Posts: 482
Thanks: 2,179
Thanked 647 Times in 341 Posts
gmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to beholdgmt900 is a splendid one to behold
Default Re: NIFTY Options Trading by RAJ

Quote:
Originally Posted by healthraj View Post
The below link has chart on Option Pain. It also has the Options Chain data. However I do not follow this link. Just for your information.

http://www.traderscockpit.com/?pageV...chain-analysis

Definition from Investopedia
http://www.investopedia.com/terms/m/maxpain.asp
How do you decide MAX PAIN, if not following the chart on Option Pain?
BTW max call pain on the chart is @6280 for Call and @5830 for Put. Total max pain is @6280. How does one interpret this?
Rest of the rules and concept are absolutely clear but for this one.

Just checked total OI at different strike prices:
5900 :133.90

6000 :137.85

6100 :100.19

Max Oi is @6000. So max pain is @ 6000. Is that the correct way to decide max pain?

Last edited by gmt900; 22nd July 2013 at 10:34 PM.
Reply With Quote
The Following User Says Thank You to gmt900 For This Useful Post:
ganeshams (22nd July 2013)
  #20  
Old 22nd July 2013, 11:07 PM
escape's Avatar
Member
 
Join Date: Aug 2012
Posts: 1,834
Thanks: 1,409
Thanked 2,561 Times in 934 Posts
escape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond reputeescape has a reputation beyond repute
Default Re: NIFTY Options Trading by RAJ

Quote:
Originally Posted by gmt900 View Post
How do you decide MAX PAIN, if not following the chart on Option Pain?
BTW max call pain on the chart is @6280 for Call and @5830 for Put. Total max pain is @6280. How does one interpret this?
Rest of the rules and concept are absolutely clear but for this one.

Just checked total OI at different strike prices:
5900 :133.90

6000 :137.85

6100 :100.19

Max Oi is @6000. So max pain is @ 6000. Is that the correct way to decide max pain?
gmt900, Based on assumption NIFTY gonna close on expiry, anything above is max pain for CALL and anything below is max pain for PUT.

For this month, my best bet is NIFTY will not cross above 6200 and will not go below 5800, so anything above 6200 is max pain for CALL and any thing below 5800 is max pain for PUT as of now. As we come close to expiry day, things will be much clear.

So as of now, do not trade any CE above strike 6200 and any PE below 5800.

Raj, hope my understanding is correct and this is what you also what to convey.

Happy Trading.

Regards,
Escape

Advertisements

Reply With Quote
The Following 7 Users Say Thank You to escape For This Useful Post:
descartes (15th August 2013), gmt900 (23rd July 2013), Happy_Singh (22nd July 2013), healthraj (23rd July 2013), novicetraders (23rd July 2013), vijayhogade (18th August 2013), VJAY (23rd July 2013)
Reply

Bookmarks

Tags
nifty options chain, raj oat


Advertise Here


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads for: NIFTY Options Trading by RAJ
Thread Thread Starter Forum Replies Last Post
Day trading Nifty Options TraderRavi Options 2572 13th August 2013 03:45 PM
Please help me for nifty options trading raj0 Options 1 17th March 2013 05:50 PM
Trading Nifty Options amitrandive Options 0 23rd February 2011 12:40 PM
Trading Nifty Options? rahulsarna Beginners Guide 38 21st January 2011 10:36 PM
Pair Trading with Nifty Options myamit Advanced Trading Strategies 5 5th June 2010 07:23 AM


All times are GMT +5.5. The time now is 12:25 PM.

Indemnity, Disclaimer & Disclosure Notice:
By visiting Traderji.com you automatically indicate that you agree to our Forum Rules, Indemnity, Disclaimer & Disclosure Notice and General Content Disclaimer Notice and indemnify Traderji.com, its associates and related parties of all claims howsoever resulting from the usage of the forum/site.
Disclaimer: Trading or investing in stocks & commodities is a high risk activity. Any action you choose to take in the markets is totally your own responsibility. You are recommended to make appropriate enquiries and seek appropriate advise before sending money, incurring any expenses, acting on recommendations or entering into any commitment in relation to any advertisement published here. Traderji.com does not vouch for any claims made by the advertisers of products and services. Traderji.com will not be held liable for any consequences in the event such claims are not honoured by the advertisers. Traderji.com will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of any information by anybody mentioned anywhere on this site.
Disclosure: The information in this forum is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned.
All names or products mentioned are trademarks or registered trademarks of their respective owners.
General Content Disclaimer Notice:
In light of our policy of encouraging candid, open exchanges of views and the rapid distribution of information originating from many sources, Traderji.com cannot determine the accuracy or legality of any information that may be uploaded to the forum. Opinions, advice and all other information expressed by participants in discussions are those of the author. You rely on such information at your own risk. You are urged to seek professional advice for specific, individual situations and not rely solely on advice or opinions given in the discussions. Since Traderji.com is an open and free discussion forum, any comments made by members of this forum in their posts reflect their own views and not of the owner or administrator of Traderji.com. Thus the owner/administrator indemnify themselves of all claims whatsoever and will not be liable or responsible for any members comments/views in this forum Traderji.com. Although we constantly delete all irrelevant content and/or SPAM, if you should find any objectionable or offensive posts made by members of this forum which you would like to bring to our notice for removal then please Contact Us.
 


Copyright © www.Traderji.com 2001 - , All rights reserved.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70