Low Risk Options Trading Strategy - Option Spreads
- Thread starter AW10
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can we check the different values of strangle @ diffenet values of nifty......in a graph in options oracle....
for example.....if i bot 5500 pe @ 62 , 5600 ce @ 56, nifty @ 5545......cost = 118....
now can i check what will be strangle value @ nifty 5500, 5570 etc......
for example.....if i bot 5500 pe @ 62 , 5600 ce @ 56, nifty @ 5545......cost = 118....
now can i check what will be strangle value @ nifty 5500, 5570 etc......
Before exipry variations will come due to supply and demand. Change in volatility also effects much in between the expiry date. We can calcluate what will be the exact postion on expiry if nifty nifty closes at........ or at.....or at............. likewise
Market price is result of demand/supply at that moment, which are byproduct of people's sentiment.. No calcuator can show those in price.. So most of the time, calculated price will be different from what is traded in mkt. As an expert craftman, we need to understand the limitations of our tools.
Happy Trading
Happy Trading
Check the link , for those interested in writing Options...
http://www.equis.com/events/webinars/?t=SEMWEB-MSSO&p=35712
http://www.equis.com/events/webinars/?t=SEMWEB-MSSO&p=35712
Hi AW Sir,
First of all, I am a complete newbie at Options.
Please have a look at this Spreadsheet. It contains the analysis about the monthly range of S&P CNX Nifty from 2003 onwards. (Month follows the cycle of derivative contracts).
We see that Jan, Mar, May, Sept, Nov and Dec always have the range of more than 7% (Jan being an exception in 2006). Now, what I want to do is I would explain with an example -
Since the month of May has good range, on the expiry date of April 2011, Nifty ended around 5785. So, I would either buy:
1. 5900CE and 5700PE, or
2. 5800CE and 5800PE
(I want you to suggest the better alternative - or a pair which is better suited in the present situation)
I want my risk to be limited and want this to be a market neutral strategy, i.e. it doesn't matter if market goes up or down.
Now, regarding exits and stops and further back-testing and refinement, I request you to guide me as I don't have any idea about option pricing.
With regards,
Aditya
First of all, I am a complete newbie at Options.
Please have a look at this Spreadsheet. It contains the analysis about the monthly range of S&P CNX Nifty from 2003 onwards. (Month follows the cycle of derivative contracts).
We see that Jan, Mar, May, Sept, Nov and Dec always have the range of more than 7% (Jan being an exception in 2006). Now, what I want to do is I would explain with an example -
Since the month of May has good range, on the expiry date of April 2011, Nifty ended around 5785. So, I would either buy:
1. 5900CE and 5700PE, or
2. 5800CE and 5800PE
(I want you to suggest the better alternative - or a pair which is better suited in the present situation)
I want my risk to be limited and want this to be a market neutral strategy, i.e. it doesn't matter if market goes up or down.
Now, regarding exits and stops and further back-testing and refinement, I request you to guide me as I don't have any idea about option pricing.
With regards,
Aditya
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