GOOD PROFIT: Hedged nifty positions with straddle...

how do you find this strategy....


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Xaero

Active Member
For someone who doesnt understand the strategy, you seem to follow it very well. It's shorted not bought. typo again...congrats...! you are inching towards getting it right....:clap:
Yesterday evening all I did was read your strategies and sit and calucate the pay-off. All evening did nothing else. Now it's slowing falling into place.

Re SL, you have to place Trigger Price and then Sell Price, same for buy also i.e. say u want to buy RIL above 2260, so your trigger should be 2261 and price should be say 2265 or 67 --- then when the price is triggered buy/sell order is placed by you service provider.
Similarly sell price will be lower than trigger price.
I don't usually place the limit price. Only the trigger price. So when the trigger price is hit the order get converted to market order. If it works for futures it should work for options as well right?

Another question, can you place after market orders for options? Has only tired it?
 

MurAtt

Well-Known Member
I don't usually place the limit price. Only the trigger price. So when the trigger price is hit the order get converted to market order. If it works for futures it should work for options as well right?

Possibly, my service provider does not support it, Price has to be given. So thats that.


Another question, can you place after market orders for options? Has only tired it?

After mkt orders for Options is possible too. Depends on Service Provider again.
:) Hope this clears some confusion ...
 
CUES--

--Nifty July future premium increased to 8 points so cost of carry increased.
--Nifty open interest decreased by 0.3 lacs suggests short covering. (Total OI now at 2.39cr)
--Nifty calls shed 7 lacs and puts added 24 lacs in open interest.
--Nifty open interest put-call ratio is at 1.23.
--4300 puts had open interest of 46 lacs and 4700 calls had open interest of 35 lacs, so 4300 and 4700 will be important levels to watch for.
--India VIX closed at 36.97, increased by 3% suggests instability.
linkon sir
i read your all post from start and your name suggest me by nishikant sir
as i trade in nifty future but i take naked positions so sometimes i have profit and some times loss but at the end of month loss is there before i met with nishikant sir but now i want to learn the option hedge with future ststergy because it seems to be great either market go any direction we will earn money so will you please give some technical on
1. how to select call put .
2. what is impact of OI
please sir give me reply
 

heeemz

Active Member
I thought of starting paper trade on this strategy... Infact started doing some work on it...but I think I need to understand it little better before I can play around with it... Primarily I am not well versed doing too many NF trades to ensure that we go along with direction of NF...

Cheers,

Heems
 
Last edited:

Xaero

Active Member
Hi linkon,

I got this bullish call spread from my broker on July 6th/7th (dont remember). I was thinking those guys were idiots but their analysts seem to be quite smart and after they properly predicted the bottom for this month I am reading their old research reports :D
(Basically said short 4300 Tar1 3916 Tar2 3768)

In the pic below i was able to figure out the Premium inflow but not able to calculate the Max profit. Can you tell me how did they get that?
 

Attachments

Hi linkon,

In the pic below i was able to figure out the Premium inflow but not able to calculate the Max profit. Can you tell me how did they get that?
Let me answer that,
if nifty is closes at 4600 hen 4500 call is worth, +100, 4600 call and 4700 call is worthless. so you make 100+premium u received on 4600 & 4700 call. If nifty closes at 4700 then your profit is +200 on 4500 call, 4600 is - 100 and 4700 is worthless.

you do the math....
 

Xaero

Active Member
Let me answer that,
if nifty is closes at 4600 hen 4500 call is worth, +100, 4600 call and 4700 call is worthless. so you make 100+premium u received on 4600 & 4700 call. If nifty closes at 4700 then your profit is +200 on 4500 call, 4600 is - 100 and 4700 is worthless.

you do the math....
Sheesh.. That was so easy. Don't know why I couldn't think of that. From yesterday evening all I am doing is reading about options and spreads and calculating pay-offs. That must be the cause. Better take some rest now and continue tomorrow. Thanks for the explanation.
 

linkon7

Well-Known Member
linkon sir
i read your all post from start and your name suggest me by nishikant sir
as i trade in nifty future but i take naked positions so sometimes i have profit and some times loss but at the end of month loss is there before i met with nishikant sir but now i want to learn the option hedge with future ststergy because it seems to be great either market go any direction we will earn money so will you please give some technical on
1. how to select call put .
2. what is impact of OI
please sir give me reply
Amol,
First thing that we need is a keen sense of direction on where the market is going. For that we track the OI of the various options. The previous day's high and low is tracked by many traders and that acts as support and resistance.

Trading in options can wipe out your capital in few months. You wont get a chance to recover, if you misjudged the direction and the strength of the direction. Its your hard earned money, dont waste it on experimentation.

In your case, i think you need to follow a system. Your entry / exit / stop loss is has to be well defined. If u make a judgmental call on the nifty, most of the time you'll end up booking profit early and let your losses run. All i can suggest is that you stop trading and evaluate where you are going wrong. write down your own rules and stick to it. If possible post your rules here. we can evaluate and work on them.
 

linkon7

Well-Known Member
Sheesh.. That was so easy. Don't know why I couldn't think of that. From yesterday evening all I am doing is reading about options and spreads and calculating pay-offs. That must be the cause. Better take some rest now and continue tomorrow. Thanks for the explanation.
Xaero,
Download a software called options oracle. It works very well with nse stocks and nifty. U can try out various combination there and work out which strategy has the best payoffs.
 

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