Futures Or Options ?

#12
Thanks, joy_mitali. Good to see that more people are reading the posts. Was turning into a one-on-one between sh50 and I. Anyone have any good strategies that they are using in the F&O market?
 
#13
Dear IVAN,
WIth urs clarity of thoughts and interpretations,I am not a fool enough who would
try to give some stray thoughts and ruin this thread.I think a few of sh50's questions are still unanswered,and I along with probablaly many others are eagerly awaiting urs critical analysis.

I would request Traderji and Credittviolet who r veterans in the StockMarket(with due respect to all other seniors whose names I am ommiting) to give some more critical reviews on the practical aspects of option trading,as u r already doing superbly.

I would put my questions and my foolish reviews in due time.

As per ur monolouge with sh50,---he is someone who can continue for days together ,if he finds a topic interesting and thought provoking.A gem in the Trederji forum,who knows a lot and still behaves like a novice,probably for the greater benefit of the forum.

Thanks again to both u and sh50,for carrying on this interesting monologue.
Regards,
joy_mitali
 
#14
Dear joy_mitali,
No questions are foolish!! Every question is thought provoking, for whatever reason. You may say something that you think is foolish, but someone else may find something in it that leads to a great find!! You just never know.
I've just joined this forum, and am sure there are lots of others who have a wealth of knowledge, and dont mind sharing it.
I know a lot of sh50s questions are still unanswered, will try and address them as soon as I can.
Regards.
 
#15
Dear Ivan,
When u consider no Qs. r foolish,then I Would like to have ur opinion(although not exactly relevent with the contents of this thread)
What would u prefer to buy at this stage:(Do ans. with a bit of reason)
1)A May NIFTY call 2000
2)A May NIFTY Put 1950
3)Both of them simulteneously

I would like to add u in my yahoo messenger,if u dont mind.
My mailID:[email protected]
If u wont mind,let me know urs.
Regards,
joy_mitali
 
#16
Hi joy_mitali,
At this point of time, I'd buy the May 2000 Call. First, the implied volatility is low coz the market is pricing the calls using the futures, not the Nifty. Secondly, the global markets are perking up, and capital flows to emerging markets are starting to rise. But given the choice of any call option, I'd go for the 1970 call. Once the Nifty gets past this level, which is a strong resistance, you'll be in the money and will gain a point for every point the Nifty rises. However, liquidity may be a constraint if you want to buy size.
However, if you feel that 1970 will not be broken in the near future, buy a 1950 put once the Nifty nears 1970. This will reduce the cash outflow on the put premium.
I dont think I'd buy both, for the simple reason that 1900 is a strong support and 2000 will be a psychological resistance, apart from 1970 being a resistance. So, we may see a trading range if FII flows do not increase. If the Nifty closes in this range, there is a good chance of losing more money than on a single position.
Agree/ disagree?
 

sh50

Active Member
#18
Thanks a million again Ivan. I am well aware of TA and derivatives theroy but the practicals leave a lot to be desired. I may understand investments better than others but for things like these,I would be a novice though kind of joy to project me differently.

You have answered almost all the questions. Just a little precision

My software gives 60min/30min charts on nifty futures but without open interest. Just want to confirm that on those charts too is it absolutely critical? The numerical values are given so I can try and make an assesment but its unavoidable I can try to plot the graph in excel.


On the NSEwebsite too a lot of info is given and wonders the relevance and crticality of that. Now the open interest of various puts and calls can be calculated and summed up but the open interest on futures- how does one come to know whether they are more on the short side or the long side. Unless I missed this if you or anybody else can help here I would be grateful.

You have said that too much F&O turnover is a sign of reversal. I mean how do you figure out how much it too much. This would not be available on a graph so I presume, just calculate the total turnover and monitor it. In the nifty futures graph, volume also comes alongwith OI. That is to be treated the way we treat normal volume or any unique point.

You have answered all questions well which I appreciate very much. I suppose FII activity in derivative and cash segment must be monitored regularly to know what they are upto.

I bought 1950 call today and was in the money by the end quite handsomely. My consultant says the market could go all the way upto 2040 since that is 50% of the downfall from 2180 to 1900.



Thanks a lot once again. I never tire of repeating that new members have made a big qualitative difference and thats what makes the forum experience great.
 

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