NIFTY Options Trading by RAJ

[prabhaag]

For today as per COI, currently the TREND is UP.
Since the today's Low was 8541, NIFTY might touch 8640 also. (1.2% from 8540)
For today Maintain LONG till 8620/40

-----------------------------
:clap: 8629 reached :thumb:

 

[VJAY]

I just paper traded today...
9.32 8700 ce 34
8550 pe 74

this pos still not get 10 point target...

I think its imp raj bros magic no of 120 to pair sell .....

 

[sk_bala82]

in market tracker website, weekly trend is showing as down. is that correct??.

 

[sunbim31]

Healthraj

This is a very long thread with so many posts , can you please summarize pair trading in simple bullet points again with any excel to share link , if any ,a sort of recapture session.. many will be benefited I am sure.

 

[pareshw17]

Healthraj

This is a very long thread with so many posts , can you please summarize pair trading in simple bullet points again with any excel to share link , if any ,a sort of recapture session.. many will be benefited I am sure.

See 1st & 2 nd thread.. Everything explained in steps without interruption

 

[rajesh0000]

See 1st & 2 nd thread.. Everything explained in steps without interruption

Probably elsewhere it was mentioned that rules have evolved thereafter.

Thanks

 

[pareshw17]

Probably elsewhere it was mentioned that rules have evolved thereafter.

Thanks

If it is so, some pls share thread no..??

 

[healthraj]

Probably elsewhere it was mentioned that rules have evolved thereafter.

Thanks

The rules mentioned in page 1 and 2 are still fine. Please ignore the rule on volume.

 

[pareshw17]

The rules mentioned in page 1 and 2 are still fine. Please ignore the rule on volume.

Thanks Sir

 

[Relish]

Please see rule no 7 Amendment by Raj Sir. You can also find some other example on this page.

Thank you Augubhai. Yes I have been Trading only one Strategy based on a slight modification to my Rule 7.

The Problem with the Rule 7 was the basic assumptions which are made with respect to Implied Volatility and say INDIAVIX.

The Assumptions made in Rule 7 were
- Go for Debit Spreads when you feel that the market is on DOWN TREND - Does not work always because we are making an assumption that In a downtrend the Volatility will go UP
- Go for Credit Spreads when you feel that the Market is on an UP TREND - Does not work always because we are making an assumption that In a downtrend the Volatility will go DOWN

VOLT UP + MARKET UP = Debit Spread = REAL BULLISH Market - Difficult to Predict VOLT
VOLT UP + MARKET DOWN = Debit Spread = REAL BEARISH Market- Difficult to Predict VOLT
VOLT DOWN + MARKET UP = Credit Spread = REVERSAL - Difficult to Predict VOLT
VOLT DOWN + MARKET DOWN = Credit Spread = REVERSAL- Difficult to Predict VOLT


My Modified Rule
- Take the MAX OI or Find a suitable pair - We will always SELL this Pair
- Find the Trend using the Hourly charts - If We feel the market will go down we will BUY Put and Will Buy Call if we feel that Market will GO UP. So yes In Trading we have a to take a Decision or a BIAS based on the charts. Simply Selling OI Pair does not always work. Actually it works 90%. But the 10% of the times it does not work because of the VOLT Shoot up and takes away all your Money. So this additional BUYing or Calls or Puts is to Cover the sudden Spurt in Volatility Or in other words I think this strategy will be Volatility Neutral.
- One more change is for the BUY Call/Put I always choose a ITM/ATM Option so that the Change in VOLT does not really affect the position.
- The other important point is to choose Call / Put strike so that it is slightly greater than combined premium of the pair. In other words we are financing our Calls or Puts by selling the Pairs.

Sample Trades taken from 13-MAR-14.

13-MAR-14 : NIFTY - OPEN - BUY 6500CE@97, SELL [email protected], SELL 6600CE@54 - Net out flow 18
27-MAR-14 : NIFTY - CLOSED - SELL [email protected], BUY [email protected], BUY 6600CE@37 - Profit of 70 points

27-MAR-14 : NIFTY - OPEN - BUY [email protected], SELL [email protected], SELL [email protected] - Net flow 5.3
31-MAR-14 : NIFTY - CLOSE - SELL [email protected], BUY [email protected], BUY [email protected] -Profit of 25 points

31-MAR-14 : BANKNIFTY - OPEN BUY 13000PE@468, SELL 12000PE@117, SELL 13000CE@337 - NET FLOW 14
31-MAR-14 : BANKNIFTY - CLOSE SELL [email protected], BUY [email protected], BUY [email protected] - Profit of 80 points

09-APR-14 : SBIN- OPEN BUY [email protected], SELL [email protected], SELL [email protected] - NET -0.7
15-APR-14 : SBIN- CLOSE SELL 2020PE@73, BUY [email protected], BUY [email protected] - Profit of 34 points