Nifty Option strategy as high IV Due to Election Result

[mukuldunnu]

Dear All,

as we all know IV of nifty option is high due to Election result to be announce but before that exit poll will be there on 12th may though ,I am taking this strategy on 07-may-2014 ,other can enter before exit poll or result day also , cause IV of options will increase more , but it should come down after results

And one more thing the range of nifty which I consider for May/2014 expiry should be between 7100-6300 Nifty spot levels.

OK following is the position which I would like to take:-

All closing price as on 8/may/2014 at nse site

Nifty Spot 6660 & May-2014 Nifty Fut-6680

Short Nifty May-2014 CE-6200 @ 550
Short Nifty May-2014 PE-7200 @ 572

please share your view :annoyed:

 

[Somatung]

Dear All,

as we all know IV of nifty option is high due to Election result to be announce but before that exit poll will be there on 12th may though ,I am taking this strategy on 07-may-2014 ,other can enter before exit poll or result day also , cause IV of options will increase more , but it should come down after results

And one more thing the range of nifty which I consider for May/2014 expiry should be between 7100-6300 Nifty spot levels.

OK following is the position which I would like to take:-

All closing price as on 8/may/2014 at nse site

Nifty Spot 6660 & May-2014 Nifty Fut-6680

Short Nifty May-2014 CE-6200 @ 550
Short Nifty May-2014 PE-7200 @ 572

please share your view :annoyed:

@:annoyed: Just joking. You not have to be annoyed.

This is a short strangle with deep itm options. Do you know how the option greeks for deep itm options act?

 

[trader_ks]

I am also thinking in same way. As there will be 2 weeks left after election result so still there will be premium in both sides and any movement in nifty greater then 5%-6% may not be favourable.
Best way is to analyse stratagy using option oracle though I have not done it but just guesing

 

[toocool]

Will it work?

 

[billgates]

Your are taking huge risk in this strategy. With a big event next week this strategy may end up in huge loss. Check the market movement in 2004 & 2009 result day and decide about holding your short position.

 

[Purushotham]

Dear All,

as we all know IV of nifty option is high due to Election result to be announce but before that exit poll will be there on 12th may though ,I am taking this strategy on 07-may-2014 ,other can enter before exit poll or result day also , cause IV of options will increase more , but it should come down after results

And one more thing the range of nifty which I consider for May/2014 expiry should be between 7100-6300 Nifty spot levels.

OK following is the position which I would like to take:-

All closing price as on 8/may/2014 at nse site

Nifty Spot 6660 & May-2014 Nifty Fut-6680

Short Nifty May-2014 CE-6200 @ 550
Short Nifty May-2014 PE-7200 @ 572

please share your view :annoyed:

Short Nifty May-2014 CE-6200 @ 550/734
Short Nifty May-2014 PE-7200 @ 572/475

 

[lemondew]

yesterday was best time to buy strangle

 

[Somatung]

yesterday was best time to buy strangle

So, so, and what are you doing when you only know this the next day? that yesterday was a good day to take a trade? What are you doing in such cases? Take care and enjoy your weekend

 

[mukuldunnu]

First Thanks to u all for taking interest n giving suggestions

Now answer 1 by 1

To, Somatung- Yes I know very well about greeks

To, toocool - I hope so as u also know none of the system is 100% perfect other than pure arbitrage which is difficult to find and execute manually .

To, billgates - yes I am aware of event but what I m thinking is market has already discounted the Mr. Modi lead BJP Govt. So nnot much upside was expected till today morning right now don't know the reason behind today relly

what I m thinking in case of no clear majority in election we can see good correction here or anything beyond imagination can take it back below 6000 level NIfty

To, Purushotham-

Short Nifty May-2014 CE-6200 @ 550/734 ye also IV - 36.17/ 42.58
Short Nifty May-2014 PE-7200 @ 572/475 IV- 34.5/42.83

That's the thing for which I was scared That's why I have mentioned that
(other can enter before exit poll or result day also , cause IV of options will increase more)

To, lemondew - Yes u r right

To, Somatung- I didn't say that yesterday was right

And off course Next Step will be Adjustment but after some wait n watch

 

[Somatung]

To, Somatung- I didn't say that yesterday was right

Dear friend, this post was pointed at Lemondew and not at you. Take care and enjoy your weekend