Dont agree with a lot of the "experts" here

[swagat86]

Swagat

Liquidity is important- no doubt, but that is to ensure your get a decent price and fast fills on orders.

Another issue I am not really sure is how they margin positions- for example if I sold a strangle- will they be asking me to put down margins both for the PUT and CALL side? that makes a big difference when calcualting risk VS Reward. Let me know

If you do not trade at a risk /reward of 1 to 2 atleast- it just is loaded against you.

yes if im nt wrong on both u have to provide margin.

 

[swagat86]

Options Trading: The Hidden Reality ("Options: Perception and Deception" & "Coulda Woulda Shoulda"

isnt this the one??

Thanks for ur info

http://www.4shared.com/file/2063692...dden_Reality__Charles_Cottle_-_2006_.html?s=1

 

[srikanth_kandalam]

Swagat

That is THE Book- especially interesting is the way he explains the equivalent positions- for example a nake put is nothing but a covered call- yet a lot of people will not sell puts but will happily trade covered calls!

It is NOT that easy of a read- and if you can stick to that you can basically ignore all the other books.

His website is riskdoctor.com ( I think!), he has a new book out and I will try and get a copy sometime soon!

 

[srikanth_kandalam]

yes if im nt wrong on both u have to provide margin.

Atleast here we dont margin both sides- as it is an oxymoron. Think about this you are selling a OTM call and an OTM PUt- whatever happens the stock will either end far in the money on only one side- so the correct or sensible way to ask for margin is to protect the broker on whichever side of the trade is more risky- not sure if make sense to you

 

[srikanth_kandalam]

i did download the Options Oracle software- frankly I am sceptical of shareware- interface looks good- but for data they are referring you back to Yahoo Finance- and I dont think Yahoo India gives out info on option chains.

If anybody knows a reliable data source for options in India- I will really appreciate some pointers!

 

[swagat86]

hi srikanth,

OO gets data from NSE servers not Yahoo.


thanks

 

[neil.nitk]

http://www.4shared.com/file/2063692...dden_Reality__Charles_Cottle_-_2006_.html?s=1

working link http://tinyurl.com/pn9cbe

 

[Shreenath]

Hello Mr. Mandalam,
If you are interested in options, and you haven't heard or read these, try to get two books
1. One is by Jon Najarian
2. McMillan....

Generally very, very few books and resources are genuine on this subject. Personally I've stayed away from Options although I'm doing some research on LEAPs and might consider that soon.

I find resources on pitbull investor very helpful for stocks and options. Henry Ford is a wonderful person to chat to and learn from......

Regards
Shreenath

Frankly I am amazed at the stuff that is being posted here on option trading. There are fundamental differences in trading option- you ignore this and you will burn yourself.

First- you need to have an idea of what the Implied volatility of a certain option is. You will need to Benchmark this with the Statistical or Historical volatility- to make a judgement whether the option is "cheaper" or "costlier"

Without this fundamental information- the guys who are suggesting trading options based on stock movements are dead wrong.

In addition you need to know about the "greeks" of the option you are considering trading. Like some xXXXX here were quoting buying options based on stock movements- do you guys realize unless you buy DEEP ITM options- your option prices will not move as fast as the underlying? If you bought ATM ( at the Money options) the best you will have is a delta of ).5 approx. That means if stock price goes up by 1 rupee your option price goes up by 50 paisa. Try making money after you pay the brokerage!

I am not even going into implied volatility changes which are the MOST important aspect of pricing- and is ignored by most novice traders. Simply put implied volatiliy is like the tides at sea- when the tide is hig- the options get pricier and when it is low it gets cheaper- the fundamental aspect to winning- is to be aware of these changes and not Just stock and option quotes- if you do that you XXXXX who are talking about buing and selling- will just mislead some innocent guys to be slaughtered.

I just chanced on this site- I want to trade options- but I have not found a credible resource that gives me the greeks and volatility info- without this if you are trading- best of luck.

 

[Shreenath]

Srikanth,
If I were you, I would stick with US Markets for Options at least until the Indian Market matures enough.

You must be able to get decent fills.

Second you must be able to get decent data including Historical Volatility, Implied Volatility, Put Call Ratio and what not......

I'm interested in that other book you mentioned about options and intend to take a look at it.....I probably can find it on ebay for less....

Regards
Shreenath

 

[Shreenath]

Srikanth,
Amazing....not one book on ebay on hidden reality. My next step is to go to abe.com for used/new books.......if that doesn't work, will order one from Riskdoctor.....

Thank you for the recommendation
regards
Shreenath

Swagat

That is THE Book- especially interesting is the way he explains the equivalent positions- for example a nake put is nothing but a covered call- yet a lot of people will not sell puts but will happily trade covered calls!

It is NOT that easy of a read- and if you can stick to that you can basically ignore all the other books.

His website is riskdoctor.com ( I think!), he has a new book out and I will try and get a copy sometime soon!