Delta Neutral Strategy (Long Nifty @ Long Puts)

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Hi Sanjay ,

Thanks for your reply , was offline ...

..am only paper trading ;-) till now.

I hv checked those discussions but no.of posts nearly equal no of (diff) opinions..

One other thing if you could comment on - in real life what percentage In the Money options ( equity -PA/CA ) are being exercised before expiry ..

this looks like complicating my "strategies" as cannot be controlled by me for timing.

Thanks ,
 

SGM

Active Member
sandhuks said:
Hi Sanjay ,

Thanks for your reply , was offline ...

..am only paper trading ;-) till now.

I hv checked those discussions but no.of posts nearly equal no of (diff) opinions..

One other thing if you could comment on - in real life what percentage In the Money options ( equity -PA/CA ) are being exercised before expiry ..

this looks like complicating my "strategies" as cannot be controlled by me for timing.

Thanks ,
Hello

Sorry for replying late. Options on nifty cannot be exercised midways. Options on stocks are not normally exercised, as they will have some time value which can be captures if sold in the market.

One would exercise an option only if the liquidity is very low and we are unable to get the intrensic value.

Even if the option is exercised and marked to u r sale (randomly done by exchange) u will have to pay the cash diff and not asked to deliver the underlying shares.


Regards
Sanjay
 
Thanks again Sanjay ,

I think I should put my Qs in a new thread ( like the next one ) instead of hijacking this thread ,but your responses are exactly what I am looking for....;-)

Rgds,
 

DanPickUp

Well-Known Member
Delta Neutral Strategy (Long Nifty & Long Puts)

As per my earlier commitment I am starting a trade on the Nifty future and going long with its puts.

Action: Buy 1000 Nifty Futures (29th September, 2005) @ 2347.00 (Closing Price) = 23,47,000.00

Buy 2000 Nifty SP2340 Puts (29th September, 2005) @ 46.00 (Closing Price) = 92,000.00


Total: 24,39,000.00


Margin requirement is only 10% or 5% (Please let me know which one is correct) In case it is 10% the investment is going to be 2,43,900.00 and if it is 5% then the requirement is going to be only 1,21,950.00.

For those this trade is too large, they can reduce the numbers to 400 futures of Nifty and 800 Puts. Keep in mind that the numbers are even.

I will keep posting development on this trade for the rest of the period till expiry of the future date i.e.,
29th September 2005. I will post only on days when the action will be required, for no action days nothing will be posted.

So keep coming back and see how the adjustments are made to the delta neutral trade.

Regards to you all the TRADERS.

wastej
Hi munde_77

Here an other one of the guy. :)
 
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