How to trade Butterflys and Condors with nifty future options?

[DanPickUp]

Dan bro,

I need ur little help.


m not sure I m putting a valid question or not........

I am little-bitt confuse......as Open Interest is the total number of outstanding contracts that are held by market participants at the end of the day ......,so if the contract is closed/over, it should be zero.....whereas NSE is showing is :

http://www.nse-india.com/live_market...segmentLink=17

is there some prob with my understanding or something else.......?

IAtma

The link doe's not work. Do you may have a screen shot you can present?

DanPickUp

 

[IAtma]

Uploaded with ImageShack.us

 

[IAtma]

bro check the link again, it is working.


http://www.nse-india.com/live_marke...-&segmentLink=17&symbolCount=2&segmentLink=17

 

[LivetoTrade]

bro check the link again, it is working.


http://www.nse-india.com/live_marke...-&segmentLink=17&symbolCount=2&segmentLink=17

Maybe their systems are programmed - in general -to clear and square-off on the last Thursday of the month, by default.

 

[anuragmunjal]

Not economically viable (actually impractical) considering the current rules applicable for options... the short side in any options in India require the full margin money as that of 1 future contract... the exchanges do not consider any strategy other than long or short in options. To create a bull spread in nifty which costs say, 20 bucks (or 1000 bucks in total as 1 contract=50 units), one need to keep margin of about 26,000-28,000 bucks...

Wow, how stupid these people must be

Dear Dan/Pg

Let me give u the exchange's point of view.. (I am sure wherever a 'spread' has a lower margin, the order wd go in as a 'spread' and get squared off as a 'spread'). out here if I put in a butterfly spread 2 day, ...I can easily square off my longs and keep open my shorts the very next minute.. since the exchange does not have the technolgy/sfw to monitor such trades, it is justified to treat all legs separately in order to manage its risk..

regards

 

[DanPickUp]

Since the exchange does not have the technolgy/sfw to monitor such trades, it is justified to treat all legs separately in order to manage its risk..

regards

Dear friend

Now I got the point for your exchange behavior

Thanks.

DanPickUp

 

[kiranjakka]

Dan bro,

I need ur little help.


m not sure I m putting a valid question or not........

I am little-bitt confuse......as Open Interest is the total number of outstanding contracts that are held by market participants at the end of the day ......,so if the contract is closed/over, it should be zero.....whereas NSE is showing is :

http://www.nse-india.com/live_market...segmentLink=17

is there some prob with my understanding or something else.......?

was not able to open the link

but i guess i understood you if there is minus in OI data ,that was the change in OI data than the previous close so you get minus symbol in the data :thumb:

yah opened the link minus denotes the change in oi data than the previous close so if oi is around 1000 if change in oi is -250 then the total oi data at present is 750 guess u got ittttttttttttttt

 

[bkb]

Hi Taurus

I posted many times in this forum that when you trade more complicated option strategies, you have to leg in. Means: You do not just place a whole butterfly or condor at once and then adjust it. Only newbies and not experienced option trader trade like that.

You start with one leg and then you leg in with the other legs. In that way, you are much more flexible. You do your analyses about the market before you make the first leg. Then you enter and you have your fixed targets.

Your first target must bring you over the zero line and if this is not the case, then you have to get the money you need to come over the zero line. I also already posted that in the past how to do.

I even posted in AW10 thread a whole strategy how to trade a condor with nearly no cost. It can be fine tuned, but some work you have to do by your self.

Tc

DanPickUp

Hi,

Can you please provide me the link of your post in AW10 thread, as referred above. Thanks.

 

[DanPickUp]

Hi,

Can you please provide me the link of your post in AW10 thread, as referred above. Thanks.

Dear Bkb

I also would have to search for the exact link. But I am as lazy as you to do so. Any way: The strategy has its advantage and disadvantage as you need a lot of cash in your market for the margins and you really have to know what you do at which market level ( Option software program needed plus you have to know how to calculate option prices by your self for the orders ). The strategy is traded at the CME ( Chicago Mercantile Exchange ) which is the most advanced Exchange when it comes to option trading as the possibilities given from them to the option traders are unmatched all over the world.

The strategy goes as followed: You start with a put back spread which you did leg in. Later you convert these put back spread in to a put credit spread. As you now have a put credit spread, next step to complete the whole strategy is to sell a call credit spread.

In that way you finally will have a long iron condor ( Long put credit spread and long call credit spread ) and if you want a butterfly, then you have to sell the second short leg ( which is the call ) on the same strike level as the short put and you will have a long iron butterfly. That is the basic way to trade this strategy as it can be improved depending on market direction outlook.

Guess you option traders recognize the different way just this one strategy can be implemented in the market. Not by doing it at once instead doing it step by step through clever converting and combining of option strategies and clear calculating of option prices. Such kind of option trading is done with all kind of different option trading strategies. How far you can go in your market with such kind of strategically trading will be your work to test.

Good luck

DanPickUp