NIFTY Options Trading by RAJ

[Profittaker]

CHGOI @ 9.30 a.m. [spot : 8353.80]
CE 8400 - 3,62,500
PE 8300 - 4,24,125

OI
CE 8500 - 55,79,975
PE 8200 - 54,36,725

 

[Profittaker]

I have Sold July Pair

PE 8200 & CE 8700 @ 118.80 .

Coverd @ 114.35
Profit for 2 lots = 227.50 only .

 

[mvkarthik]

1st trade
--------
pair sell CE,PE-8400

pair sell at -98.00
exit at - 85.95
profit -602.50
-----------------------------------
2 trade
-------
pair sell CE PE 8400

pair sell at- 92.10
exit at -82.20
profit- 495.00
-----------------------------------

 

[healthraj]

I think I will have to write a long story. So bear with me...

As for as I know, Pair Buying works only when we know the VOLT will go UP and when we can predict some Sudden and Huge movement. Which happens during special events like Quarterly result, Budget, Election etc.... In the last two years even on those special events, the market makers steadily brings UP the VOLT till the event happens. And on the day of the event they bring down the VOLT and kill those Pair Buyers.

As you said, you can BUY ATM/ITM pairs with a Narrow Range and then make some profit.

So what is the strategy for the people who have less Premiums and still want to do pair trading. Normally it is good to do these kind of trades when NIFTY is trading near the Daily/Weekly/Monthly Pivot and we clearly know the Monthly Range.

Let us see if we have one right now.

Right now NIFTY is trading near the Daily Pivot @ 8150. So we have an opportunity. Daily Range is 600 points. 300 on the UP side from 8150 to 8450 and 300 points on the DOWN side from 8150 to 7850. So If NIFTY makes strong moves either one of them is possible.

Either 8450 or 7850 is possible.
So why not try OTM Option Pair Say 8350CE and 7950PE (Please see that even though it is OTM, we are buying within the Daily Range).

7950PE available @ 50. 8350CE Available @ 30.

So we have two cases
Neutral View : Buy 8250CE instead of 8350CE so that if the market moves up your loss on PE is not felt much. Pair Premium @ 100.
DOWN View : Go for the 7950PE-8350CE @ 80.
For DONW View : On the day of Expiry Assuming you bought 100 quantities in each.

What if NIFTY makes 7850 : Profit is ~2900
What if NIFTY makes 8450 : Same Profit is ~2900

So for a Premium of 8000, you make 2900 - Which is still Good.
If market is between 7900 and 8400, your positions are in loss.

What If you trade 8150CE-8150PE - The Pair is now available at 215.

What if NIFTY makes 7850 : Profit is ~8000
What if NIFTY makes 8450 : Same Profit is ~8000

So for a Premium of 21500, you make a profit of 8000.

But Buying Pairs as for as I know is Wait and Watch game, since market is trending only 20% of the times. 80% of the time it is either FLAT or Range bound.

So if you are SLEEPY trader and just want to put a trade and wait till expiry then a combination of these should be Good.

That is we SELL the Daily Range of 8450CE-7850PE - Premium is 45. So I will sell double the quantity of Debit Spread (BUY) - Say 200 quantity in each
Buy the Pair 8350CE-7950PE - 100 quantity in each.

So our net outgoing is

SELL 200 * 45 = 9000
BUY 100 * 80 = 8000
Net Credit = 9000-8000 = 1000.
I think a Capital of around 1.25 Lakh would be required for the above. People can confirm.


On the Day of Expiry with the AVG VOLT of 15% - No Loss - @ 7850/8450 - Profit of around 6000.

So with a Capital of 1,25,000 , We can make a profit of 1% to 5%, if we are sure about the Range.

If it goes out of the Range of 7800 and 8500 then this strategy is at loss. Within the Range of 7800 and 8500, it is in profit. Max Profit at 7850 or 8450.

I am not expert in these complex strategies, I just try theoretically using the Tool I have. May be there are better strategies for people who just wants to trade only for expiry.

Two Days to go for the Expiry. Just a Status check on the different Pairs took when NIFTY was trading at 8150. The target was either 7850 and 8450. Neither of those levels met now..

Debit Spread
7950PE - 8350CE Bought at 80 is now at 56.9 - Loss of 23 points.
7950PE - 8250CE Bought at 100 is now at 135 - Profit of 35 points.
So a Neutral View is better than taking a Biased view in trading Pairs. Make sure the Premium is more or less same.


8150CE-8150PE Bought at 215 is now at 226 - Profit of 11 points - Not so much for the Premium spent due to drop in Volatility

Credit Spreads
7850PE-8450CE Pair Sold at 45 is now at 12 - 33 points profit. In normal circumstances the Bread Winner for most of the time.

Combination of Credit and Debit Spreads
7950PE - 8250CE Bought at 100 is now at 135 - Profit of 35 points.
7850PE-8450CE Pair Sold at 45 is now at 12 - 33 points profit.
Total 68 points. Choosing the Right Debit Spread will Give more profits.

 

[kcsusha]

Dear Karthik Sir,
Which pair you sold today? I think it should have been for July Series.

 

[mvkarthik]

Dear Karthik Sir,
Which pair you sold today? I think it should have been for July Series.

i sold this month pair (yes, its very risky trades)

 

[Profittaker]

June Month Contract Details:- TIME : 09:30:06

CHGOI :
CE : 8400 2,09,550
PE : 8300 3,03,475

OI :
CE: 8400 50,86,875
PE: 8300 61,24,325


July Month Contract Details:- TIME : 09:32:06

CHGOI :
CE : 8500 49,250
PE : 8300 26,175

OI :
CE: 8500 16,75,600
PE: 8100 18,49,950

 

[Profittaker]

June Month Contract Details:- TIME : 10:03:36

CHGOI :
CE : 8400 3,15,375
PE : 8400 8,83,500

OI :
CE: 8400 51,92,700
PE: 8300 63,14,950

[Now July Month Contract 8700 CE & 8300 PE price in Trade Range.]

Trade Details : - July Contract:

SOLD :8700 CE @ 44.80 & 8300 PE @ 94.35. Net : 139.15. [Spot : 8410]
BOUGHT :8700 CE @ 40.70 & 8300 PE @ 107.00. Net :147.70. (SL Triggered @ Spot : 8380.)
Net Loss for 2 Lots : 427.50 .

 

[Profittaker]

June Month Contract Details:- TIME : 09:30:36

CHGOI :
CE : 8400 6,07,300
PE : 8100 7,64,200

OI :
CE: 8400 52,99,575
PE: 8300 56,24,800

TIME : 10:01:06
CHGOI :
CE : 8400 10,92,000
PE : 8300 15,37,675

OI :
CE: 8400 57,84,275
PE: 8300 65,03,000



July Month Contract Details:- TIME : 09:31:36

CHGOI :
CE : 8500 1,37,100
PE : 8200 41,675

OI :
CE: 8400 20,26,975
PE: 8100 18,94,875

TIME : 10:01:06
CHGOI :
CE : 8500 2,05,675
PE : 8300 1,01,125

OI :
CE: 8400 21,19,300
PE: 8300 19,26,225

 

[mvkarthik]

there are 2 views
----------------------

-----------------------------------------------------
if u c my post at 2.25, i said,nifty is getting ready for go up from 7900 lv
i take some long positions at 7950 st 7850,but the signal is not
strong because of the MAXOI,if 2maro MAXOI changed from PE7800 to 7900,
target 8160,8500,DEC/17/2014 nifty low was -7962 from there nifty
went to 9000 ,today low was 7940,let see were nifty goes
--------------------------------------------------------
(its my view only)

nifty FUT
buy at-7976
exit at-8366
profit-390 points