Day Trading Stocks & Futures

[SarangSood]

If you can compare the combined Oi of varoius options strikes with futures you can easily see the greater picture -
most of the options writers don't hedge their positions with futures but they usually changes the strikes smartly or trapped (overconfident and beginners).

If most of options writers tries to hedge their positions smartly with futures, then future oi, volume and liquidity will significantly increase, unfortunately that's not the case in Indian Market. Only a few option writers are doing that.

Writers invest so much money in the market for a limited profit against the risk of unlimited loss. For this risk/reward ratio they still do it because MAYBE they are more experienced and can use all kinds of strategies to even make good money in high volatility and gap openings.

I try to view the market as if only writers make money. So by viewing it like that i try to figure out what kind of strategies would be best suiting them in volatile and non volatile markets.

Now coming on to OI, it is a very subjective matter. One lot of 10500 pe bought and one sold will show a figure of 2. So how are we certain that all of the OI figure is shorted only? Also since the introduction of algos there can be so much spike in OI in a particular strike just because algo traders are getting their cut in their neutral or synthetic strategies.

All said if it's working for you thumbs up. Everyone can have different perspective in the market and it's good to read their ideas.

 

[sanju005ind]

Writers invest so much money in the market for a limited profit against the risk of unlimited loss. For this risk/reward ratio they still do it because MAYBE they are more experienced and can use all kinds of strategies to even make good money in high volatility and gap openings.

I try to view the market as if only writers make money. So by viewing it like that i try to figure out what kind of strategies would be best suiting them in volatile and non volatile markets.

Now coming on to OI, it is a very subjective matter. One lot of 10500 pe bought and one sold will show a figure of 2. So how are we certain that all of the OI figure is shorted only? Also since the introduction of algos there can be so much spike in OI in a particular strike just because algo traders are getting their cut in their neutral or synthetic strategies.

All said if it's working for you thumbs up. Everyone can have different perspective in the market and it's good to read their ideas.

"Writing options has unlimited loss" this is the most hyped up theme in all the books and scares many of retail who go for buying.Yes theoretically that is true.
But practically it need not be more scary than a futures contract in comparison. Even if the sold option is ITM the delta is still nearly half and theta on your side.Yes volatility spikes will hurt.But there are multiple variations where by the seller can protect the position temporarily till the vola is down.Basically writer should be well capitalized else no business indulging in it.

 

[Dantrd1]

"Writing options has unlimited loss" this is the most hyped up theme in all the books and scares many of retail who go for buying.Yes theoretically that is true.
But practically it need not be more scary than a futures contract in comparison. Even if the sold option is ITM the delta is still nearly half and theta on your side.Yes volatility spikes will hurt.But there are multiple variations where by the seller can protect the position temporarily till the vola is down.Basically writer should be well capitalized else no business indulging in it.

Sir the moment you say well capitalised I think we can safely take out 90% of us retailers.

 

[sanju005ind]

Sir the moment you say well capitalized I think we can safely take out 90% of us retailers.

For now include me too.
Personally I feel If you want to sell 1 option contract(NRML) then you should have enough margin for 3-4 contracts for exigencies.Till such time do not attempt it.

 

[headstrong007]

I try to view the market as if only writers make money. So by viewing it like that i try to figure out what kind of strategies would be best suiting them in volatile and non volatile markets.

Last two days many options buyers made huge money in big move. Writers usually trapped in such moves when options buyers start making easy money.
Pro traders like me making big now. In last 2-3 days I bought and sold options @41 ->283 and today 62 -> 192 (holding rest for much hither target without any risk).
This is obviously in the expense of options writers money. Some of them surely trapped.

Anyways as you said,
if it's working for you thumbs up. Everyone can have different perspective in the market and it's good to read their ideas.

But the fact is pro option buyers and sellers both are making money and when they are making windfall of profits they think opposite end is loosing. I think, this time 10500 PE writers are getting trapped (may be its because I made 7 times profit using option buying, and repeating the performance easily, I am thinking other side must be trapped and panicked ).

Happy Trading and Cheers.

 

[iwillwin]

We must understand, why bear market falls are much sharper than bull market rally. We can see just within two day 150 point value erosion from one of the best stock Reliance too.

We must understand the reason, when investors faces sudden losses in some stocks in their portfolio, its is common psychology that they want to cover that loss instantly by liquidating another profit making stock like Reliance as quickly as possible.

So, the fall in Reliance is actually the side effect of bear market. A lesson how a good stock can also fall into bear market trap easily.

For investors also it's all about managing the portfolio, maintaining the stop losses and booking partial profit or full profit and enter again in lower level. Investing also needs the intelligence.
Just putting the money for long term is not enough, investors must know when to book profit and when to remain in cash.

Please understand that there is a fundamental angle to the fall.... with oil marketing companies forced to sell at lower rates how will reliance match to sell fuel....besides that there are inventory losses in refining business...one can say that insiders had the news and were short on reliance
Profitability of refining business can bring down overall group profits imo

 

[headstrong007]

Please understand that there is a fundamental angle to the fall.... with oil marketing companies forced to sell at lower rates how will reliance match to sell fuel....besides that there are inventory losses in refining business...one can say that insiders had the news and were short on reliance
Profitability of refining business can bring down overall group profits imo

This is panic fall not fundamental fall. Gormint just announced Rs 1 burden. Reliance 100 pt drop, today ONGC 15% drop(single day). This is not fundamental fall this is bear market panic sell.

Oil marketing companies took much higher burden during previous Gormint when Crude was around 120 USD. They compensate the loss by cutting the dividend they pay to gormint and they sell at higher price when crude price fall, this is a part of the game (already applied and tested strategies).

There was a discussion on CNBC (2-3 days ago) how some large fund managers are panicked and started profit booking from profitable stocks like Reliance to compensate sudden losses. They said It'll open more leg to this bear market (even before such announcement from Gormint 2-3 days ago), that actually happened.

You can see how the panic sell started again just after RBI event. It's typical bear market panic sell not fundamental sell at all. When you can see 200 point fall in Nifty in 30 minutes, is that any fundamental changed in last 30 minutes? No, it was only panic sell from investors and fund managers.

 

[monkeybusiness]

100 Yes you can download.Since I download all FNO stocks. 1 Min did not work. But 3 minutes worked.
RegardingFutures data you can download the 3 active months.the moment the contract expires Zerodha maintains only EOD.

Installed R Studio, retrived public token and KF token(access token), created folder. Selected code and tried to run the script, nothing happened. Guess I am goofing up something.

 

[sanju005ind]

Installed R Studio, retrived public token and KF token(access token), created folder. Selected code and tried to run the script, nothing happened. Guess I am goofing up something.
View attachment 29180

Two things you need to select Ctrl+A(Select All) in the code window and press Run (Iknow sounds funny)
As I mentioned 1 min does not work.3 min and above does.
My Screen

 

[headstrong007]

India risks US sanctions following $5 billion Russia defense deal

https://edition.cnn.com/2018/10/05/asia/india-s400-deal-intl/index.html