Advanced Nifty Option Strategies

[DanPickUp]

timepass sir,danpickup sir,summasum sir and other online options trader
is there any alternative of "optionoracle" .help me ? wtching you people are minting money from option trading .keep on going..........

Dear Muinali

I for my self have no idea of any other acceptable free option analyzing software. I use a very expensive one, but this is not needed for your market.

But you also not need it necessarily. Have a look at this: http://i47.tinypic.com/vfkvfm.png . Can you see the analyzing picture in front of you when combining different strike levels with different prices? That is how I identify the strategy I want to implement. Looking at the option matrix and combine the possibilities which could make sense. Needs some experience and knowledge about all that different option strategies. Rest is more or less just math by calculation what we spent for the long options and what we get with the short options.

Good trading

DanPickUp

 

[DanPickUp]

If not adjusted in any way I talked about in this post http://www.traderji.com/options/74905-advanced-nifty-option-strategies-4.html#post736134, then you are now in loss with the short strangle as the stop loss was not defined.

If traded with out stop loss, then adjustment is needed. Have a look at the current matrix http://i49.tinypic.com/2s1tys8.png

What to do now when being in loss?

Good trading

DanPickUp

 

[DanPickUp]

Dan,

regarding stoploss on this short strangle trade , I suggest the following :

We have collected 42.45 + 42.00 = 82.45 points as premium. The moment the market trends and the premium of any one leg goes to 82.45, that is our stoploss. So suppose the market goes down and at some point 5600 put starts quoting 82.45 or say 83 , we liquidate both the legs and 5900 call that time may be quoting 20 points...that plus brokerage and taxes is our loss.

This of course is a layman's thinking...would like to know where would you keep the stoploss and how you would handle the trade when it starts going against us...

Happy Trading,

Smart_trade

Dear ST

Stop loss mentioned from you is surely a good way to place orders and has nothing to do with "Layman's thinking". Limit orders by which we have clear targets. Targets which include a fixed amount of money we are willing to lose. Calculating the whole value of the sold options, adding the money we will risk to give some room to the trade and that is the price one leg can be maximum in loss.

But what when market drops like a stone and orders on options are no more filled?

Good trading

DanPickUp

 

[DanPickUp]

If not adjusted in any way I talked about in this post http://www.traderji.com/options/74905-advanced-nifty-option-strategies-4.html#post736134, then you are now in loss with the short strangle as the stop loss was not defined.

If traded with out stop loss, then adjustment is needed. Have a look at the current matrix http://i49.tinypic.com/2s1tys8.png

What to do now when being in loss?

Good trading

DanPickUp

If traded with stop loss, risk you face at the moment is a spike down on the down side and you may are filled or may are not filled. (You have to consider both situations at all the time: That at least is my way of analyzing) Means: Your put is bought back if filled and you are still short the call. The call not necessary has to be at zero when your stop loss is touched on the put side. An other tricky situation.

The stop loss is only for worst case scenarios and you really better adjust the trade at the needed time and yesterday was a good day to adjust.

The loss finally at the end of this day is surely small when done nothing. Now we have to be prepared for tomorrow. Could be an interesting day and if lucky, market will stay in the range. Means: If Nifty will go up for one day to recover some loses, that would be in our favor. Other wise we come really to the point action is needed to not get in troubles.

Let's see.

Good trading

DanPickUp

 

[DanPickUp]

For the moment, the trade in its original implementation looks fine. Volatility has decreased as market stays and even moves up a bit. Good for us.

Current prices:

Nov 5600 put at 64.65
Nov 5900 call at 10.35

Profit: 10 Rs

If you adjusted the way mentioned by me with the long Nov 5400 put and the Nov 5800 call, you even have a better profit.

http://i47.tinypic.com/fopqbs.png

Wall street will be reopened today.

Good trading

DanPickUp

 

[DanPickUp]

Hi

As market stays in our range and vola not increases, this is a very good day for the trade.

Nov 5600 put at 49.10
Nov 5900 call at 11.00

Profit at the moment: 24 Rs

If you adjusted: Sell now the Nov 5400 put, buy back the Nov 5800 call and sell the Nov 5900 call. Now you are again in the original position and you have already some cash on the table.

http://i48.tinypic.com/1687dz6.png

Good trading

DanPickUp

 

[DanPickUp]

Hi

http://i50.tinypic.com/2chqn1l.png

Again an other good day for the trade idea. Vega is low and market moves in our range.

Nov 5600 put at 28.90
Nov 5900 call at 19.00

Total profit for the moment: 36 Rs

Weekend is in front of us: Means time decay over the weekend. Still: Hedge the position in some way I posted here http://www.traderji.com/options/74905-advanced-nifty-option-strategies-3.html#post735747

Employment report in the States will be available in one hour. If we are hedged, we do not have to care over the weekend how the figures are. Only one which has to think about it is Sir Obama, as these figures could decide over his continuing presidency or saying: Good by.

I say good by and enjoy the weekend. Good trading

DanPickUp

 

[DanPickUp]

Hi

Compare the matrix from today http://i45.tinypic.com/2rfq4xl.png with the matrix in the last post. (http://i50.tinypic.com/2chqn1l.png)

What can you see?

The prices of the Nov 5600 put and the price of the Nov 5900 call are now since four day the same.

The IV of the Nov 5600 Put went up nearly one % and the IV of the Nov 5900 call went up 0.6 %.

The traded volume on both has changed heavily. The traded volume on the Nov 5600 put went down from 278'000 to 224'000 and the traded volume of the Nov 5900 call went down from 243'000 to 197'000.

The original OI has changed little. The original OI of the Nov 5600 put went up from 6'590 to 6'770 and the OI of the Nov 5900 call went down from 6'835 to 6'737.

The change in OI on the Nov 5600 put went down from 892'000 to 279'000 and on the Nov 5900 call it went down from 781'000 to - 1'950.

Now what the heck does that all mean?

Any ideas?

Good trading

DanPickUp

 

[SexyTrader]

Hi

Compare the matrix from today http://i45.tinypic.com/2rfq4xl.png with the matrix in the last post. (http://i50.tinypic.com/2chqn1l.png)

What can you see?

The prices of the Nov 5600 put and the price of the Nov 5900 call are now since four day the same.

The IV of the Nov 5600 Put went up nearly one % and the IV of the Nov 5900 call went up 0.6 %.

The traded volume on both has changed heavily. The traded volume on the Nov 5600 put went down from 278'000 to 224'000 and the traded volume of the Nov 5900 call went down from 243'000 to 197'000.

The original OI has changed little. The original OI of the Nov 5600 put went up from 6'590 to 6'770 and the OI of the Nov 5900 call went down from 6'835 to 6'737.

The change in OI on the Nov 5600 put went down from 892'000 to 279'000 and on the Nov 5900 call it went down from 781'000 to - 1'950.

Now what the heck does that all mean?

Any ideas?

Good trading

DanPickUp

I feel the markets are going down :thumb: I think a heavy Bear crash is around the corner...the world over!

 

[escape]

Hi

Compare the matrix from today http://i45.tinypic.com/2rfq4xl.png with the matrix in the last post. (http://i50.tinypic.com/2chqn1l.png)

What can you see?

The prices of the Nov 5600 put and the price of the Nov 5900 call are now since four day the same.

The IV of the Nov 5600 Put went up nearly one % and the IV of the Nov 5900 call went up 0.6 %.

The traded volume on both has changed heavily. The traded volume on the Nov 5600 put went down from 278'000 to 224'000 and the traded volume of the Nov 5900 call went down from 243'000 to 197'000.

The original OI has changed little. The original OI of the Nov 5600 put went up from 6'590 to 6'770 and the OI of the Nov 5900 call went down from 6'835 to 6'737.

The change in OI on the Nov 5600 put went down from 892'000 to 279'000 and on the Nov 5900 call it went down from 781'000 to - 1'950.

Now what the heck does that all mean?

Any ideas?

Good trading

DanPickUp

Dear Dan,

I guess, based on OI and Change in OI, market is losing strength. But as price remains intact in both direction (it didn't even lost time-decay value) including during weekends, may means big fight is going on in both direction, market is in confused state.

Regards,
Escape