Day Trading Stocks & Futures

travi

Well-Known Member
Many here will be happy as lot of members were very much concerned about DMart,Bajaj Finance..
BajFin had a big drawdown but personally it was not an issue at all. ( Barrier to entry strength )
Major concern at that time was DMart with an RIL war but 2K proved very tough to break otherwise i'd also have been forced to exit lower.

Abbott bhai is now the only laggard which makes lower highs above 15K and never went anywhere but even this one doesnt have competition :) Last yr was great for it but i didnt have a position then.
 

mohan.sic

Well-Known Member
This could be a little longish post but I guess it will be worth it.

Of course if someone can do a back test for a longer period and for both PE and CE , it may throw a clearer picture. of course nifty may be a different ball game altoge
in pursuant to your suggestion I did a small calculation, on the feasibility with calls on the Bank nifty options to future positions for intraday trading. Of course just a rough single day calculation and single a single option pricing is hardly what can be called conclusive but I will list a few points which i observed which will give trading in options a better edge than futures from what I see. The prices and other parameters are not absolute but you should be able to get the gist of what I am saying.

I was looking at the Delta value for the option strike consideration, now getting a 1 delta option would be too far off so I decided to look at a Delta value close to .8, and the take the price difference of 5 lots of bank nifty options VS 4 lots of futures i.e., 125 units of options to 100 units of futures, of course the variation in the futures premium I am not considering for the sake of calculation.

Considering the ATM strike as 28600 , the .8 delta strike I found was around 27800 and the option premium there was 850 rs.
If index moves apprx 500 points in our favour it would mean a profit of rs.500 * 100 = +50000 and vice versa
whereas when you consider the movement of options for the same point difference
a 500 point difference in the option value in our favour was 1325-850 = 475 *125 = 59375 ( since we have to take 5 lots into account)
and a 500 point movement against us gave a premium of 500 - 850 = -350 * 125 = -43750

these are just an approximation and not absolute. Andthey are from option buying only.

Coming to the margin requirment., 5 lots of bank nifty @ 850 would require about 1.1 lakhs even for overnight positions. whereas you can imagine the margin required for the bank nifty future , even if you are taking it with a hedge to benefit from the new sebi law. or with an intraday margin

so my vote for comfort and benefit stays with options , As usual this is what i calculated, i could be wrong , in case i am , i would like to know where.

if would be nice if some can get a back test done on both ce and pe for a longer period.
of course nifty may be a different ball game altogether


first of all Why Comparing 2 different instrument types ?
Both instruments will have their own pros and cons.
 

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