My post above was to inform members of this forum on Mr. Lawrence Harris's work on the origins of trading profits of the Zero-Sum game!
Over a period of time a trading system can deliver positive expectancy provided your trading system controls losses to a small % (0.5-2) of the trading...
Taking the example of:
NIFTY 31MAR2005 CE 2050.00 which is currently trading at 68.25 with the underlying value of the Nifty being 2057.30
As we know that the Option premium is the price at which an option trades. It has two components:
Intrisic value + Time value
Taking the above...
To take advantage of any big moves post the budget one can BUY a Nifty Option Straddle.
Buy a NIFTY 31MAR2005 CE 2100.00 currently trading at 44.15
Buy a NIFTY 31MAR2005 PE 2000.00 currently trading at 36.85
Assuming you bough one contract of each your total outgo would be Rs...
When you sell any option (call or put) you need to pay a margin to the broker.
If you sell a call or put you can close your position by buying back that call or put before expiry date.
When you sell 1 lot of "[email protected]" at 10.25Rs you will receive the 10.25 right away and no you do not...
On expiry this will be the value of your CALLS:
1)0.00
2)0.00
3)0.00
4)10.00
On expiry this will be the value of your PUTS:
1)10.00
2)6.00
3)0.00
4)0.00
YES!
YES!
If you had followed my previous post on Gold, I am sure by now you must be sitting on a sizeable profit.
Golds looks to be ready for the next bull run after a minor corrective period over the past two months. The recent sell off in the gold stocks appears to have run its course and the next...
Linear (Arithmetic) Scaling: On a linear (arithmetic) scale chart, the spacing between each point on the vertical scale is identical. Thus the vertical distance between 10 and 20 is the same as the vertical distance between 90 and 100. While this kind of scaling is intuitive and easy to recreate...
Arvind Mills could be overbought and ready for a correction.
I would suggest you to wait for a close above the trading range that you have been monitoring and then go long. If the share falls below the low of the trading range then it is better to wait for the correction to complete itself...
If I were you I would have purchased a 1800 PUT after I went long in the Nifty Futures.
This way my MAX LOSS or RISK would have been the premium paid for purchasing the NSE Nifty 1800 PUT. In case the market fell I would be proteced by the PUT. In case the market rose above 1800 my MAX LOSS...
Buy a Put
The simplest and most direct way of
restricting losses of capital appreciation is to use Stop-Sell prices. This discipline requires that one determine ahead of time the price at which they will sell a stock.
Put options provide the simplest, most direct and certain method of...
Is trading a zero sum game?
Traders often talk about zero sum games. This discussion came from a branch of game theory which deals with the decision making process. Game theory is not simply the study of games. It is the study of how many different and complex problems may have simple...
The premiums that you pay in buying put or call options is actually the maximum loss that you can suffer in case the trade goes against you. In effect it behaves like a stoploss too! Also there are no margins to be paid when you buy put or call options.