NIFTY Options Trading - Intraday

raj_hpking

Well-Known Member
#12
Ok, After searching whole day and reading different articles, I understood below. Hope it will help to newbie in options like me and expert can correct me if anything is wrong,

Below description is for CALLs, for PUT consider vice versa true.
  • Delta - It is important factor to decide/increase the option's premium value. i.e. if underlying stock increases or decreases by 1 rupees then how much option premium will increase/decrease. Greater delta value is better for calls. Delta is dynamic. It increases as contract approaches date.
  • Gamma - Gamma is amount by which delta will increase. Greater the Gamma better for Delta.
  • Theta - Theta is very important factor. It is time decay. It denotes how option's premium value decreases by each day approaches to last day of contract. Lesser the Theta better for call option's premium value.
  • Vega (Volatility)- It denotes the volatility. Greater the volatility better for options premium value but remember greater volatility also brings increase in theta i.e. time decay.

There are many other factors (interest rate, etc.....) but I found these above are more important.

Example: TATAMOTORS present price is 384. I feel TATAMOTORS will cross 400 before August. So below is comparision,

FOR 390 strike price
Option Price : 11.68 (Fair value of the option)
Delta : 0.4756
Gamma : 0.0119
Vega (Volatility) : 0.4081
Theta : -0.2974

FOR 400 strike price
Option Price : 8.61 (Fair value of the option)
Delta : 0.3715
Gamma : 0.0107
Vega (Volatility) : 0.3875
Theta : -0.2901

So looking at above, for 400CE theta is slightly less than for 390CE. Also, delta for 390CE is more, so it's option premium value will increase faster than that of 400CE.

I hope my understanding is correct and it will help someone else. :thumb:
 
Last edited:

raj_hpking

Well-Known Member
#13
Currently holding,

1) TATASTEEL AUG 280CE at 3.70rs.
2) MOTHERSUMI AUG 400CE at 2.15rs
 

umeshmandal

Well-Known Member
#15
Ok, After searching whole day and reading different articles, I understood below. Hope it will help to newbie in options like me and expert can correct me if anything is wrong,

Below description is for CALLs, for PUT consider vice versa true.
  • Delta - It is important factor to decide/increase the option's premium value. i.e. if underlying stock increases or decreases by 1 rupees then how much option premium will increase/decrease. Greater delta value is better for calls. Delta is dynamic. It increases as contract approaches date.
  • Gamma - Gamma is amount by which delta will increase. Greater the Gamma better for Delta.
  • Theta - Theta is very important factor. It is time decay. It denotes how option's premium value decreases by each day approaches to last day of contract. Lesser the Theta better for call option's premium value.
  • Vega (Volatility)- It denotes the volatility. Greater the volatility better for options premium value but remember greater volatility also brings increase in theta i.e. time decay.

There are many other factors (interest rate, etc.....) but I found these above are more important.

Example: TATAMOTORS present price is 384. I feel TATAMOTORS will cross 400 before August. So below is comparision,

FOR 390 strike price
Option Price : 11.68 (Fair value of the option)
Delta : 0.4756
Gamma : 0.0119
Vega (Volatility) : 0.4081
Theta : -0.2974

FOR 400 strike price
Option Price : 8.61 (Fair value of the option)
Delta : 0.3715
Gamma : 0.0107
Vega (Volatility) : 0.3875
Theta : -0.2901

So looking at above, for 400CE theta is slightly less than for 390CE. Also, delta for 390CE is more, so it's option premium value will increase faster than that of 400CE.

I hope my understanding is correct and it will help someone else. :thumb:
The Senior Traders in Options may get angry at my suggestion but I think what I am about to write is correct !

Forget Greeks when trading Options INTRADAY !

Best Options to trade in NSE as on today is Nifty Options ONLY and more so for Intraday!

I had started a thread on this, but was warned by Super Moderator as that was construed as Client seeking posts hence did not pursue the same.

Trade options based on RT Nifty charts as if you would trade NF! Always trade in the money OPTIONS Intraday! I prefer using SL based on the underlyings value rather than the Option value !
 

raj_hpking

Well-Known Member
#16
Hi,

I started this thread when I was trading intraday on nifty option. But after continueous losses and after traderji members valueable suggestion started delivering them. Now my losses are reduced and slowly recovering them.
 
#18
The Senior Traders in Options may get angry at my suggestion but I think what I am about to write is correct !

Forget Greeks when trading Options INTRADAY !

[/B]
Wow ........... I also get bit confsued with greeks ........... for intrraday I m also in NIFTY ..... i use few indicators .... (MACD, Super-Trend, GANN, etc.) on NIFTY spot ........... and based on direction predictions, i buy Call/put ...... i go for ITM ......

Why options? because -- lesser investment ...........
 

umeshmandal

Well-Known Member
#19
Wow ........... I also get bit confsued with greeks ........... for intrraday I m also in NIFTY ..... i use few indicators .... (MACD, Super-Trend, GANN, etc.) on NIFTY spot ........... and based on direction predictions, i buy Call/put ...... i go for ITM ......

Why options? because -- lesser investment ...........
Wow! Do share a bit more about your experience on this! I also trade almost likewise but am very very very new to this, just a few weeks old! :D
 
#20
Wow! Do share a bit more about your experience on this! I also trade almost likewise but am very very very new to this, just a few weeks old! :D
I follow simple logic ........

I plot Supertrend (Sharekhan) on NIFTY SPOT .......

At crossovers ........ I buy call and put ....... I avoid putting SL in system ...... instead SL in kept in mind ...........

Nowadays I also started following advisces of vetran like MVKarthik, Raj, etc. ... and entre into trade when CHOI crosses 10Lakhs

I had also used GANN earlier .......
 

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