Option Buy Recomendations

[trillian]

Hi friends,

I am posting the levels for this week (22/09/2008 - 26/09/2008). Ghosh Correct me if I am wrong.

S1 = 3900
R1 = 4400

R1 - S1 = 461.99 so > 400.

You should follow and trade by sideways strategy posted in first post by Ghosh.

Regards.

 

[ghosh_ak34]

Hi Ghosh,

As per this week data R1-4100 and S1-4500.If we know if it's +-20 points trend arnd 10.30 ,12.45 and 3.00 PM.Does we need to buy deep out of Money Calls (here R1-4100) and deep In the Money Puts (Here S1-4500),compared to Spot Price.

Why cant we buy calls and puts which are nearer to Spot Price?.On Thursday the Spot Price of Nifty at 10.30 PM is arnd 3840 .So why cant we buy 3900 Calls and 3900 Puts (for hedging purpose at EOD) after setting the stoploss of 30%.

Does i miss some concepts here?Please advice.

Reg
Vasanth

Dear Vasanth,

As per strategy posted in 1st post, its reco. to buy calls at S1 (strike price) and puts at R1 (Strike price). I have tested it positive so I reco. the same.

Regards

 

[ghosh_ak34]

Dear Ghosh,
Iam in the same boat as Vasanth!
For the week ended September 12, 2008,
Weekly High: 4558 Weekly Low: 4200.15 Weekly Close: 4238.45
So P=4332.20 2P=8664.40
SI=2P-H=4106.40
R1=2P-L=4464.25
In the current week, the market gyrated wildly.As per your strategy we are to follow:
If (Opening price - price at 10:30 AM) =< 20pts, buy Nifty put at R1 (4400).
If (Opening price - price at 10:30 AM) >= 20pts, buy Nifty call at S1( 4100).
When the market tanks to levels like 4000 do we still buy R1 puts?
Do clarify please.
Thanks and Regards,

Suresh

Dear Suresh,

You are doing reverse calculations. If (Price at 10:30AM - price at openinhg) > 20 then, buy calls at S1. and if (price at 10:30 AM - price at opening) <20 then, buy puts at R1.

In net shell if trend is up by 20pts then, buy calls at S1 and if trend is down by 20pts then, buy puts at R1. R1 ansd S1 remains same for the week irrespective of any movements in Nifty spot.

Regards

 

[ghosh_ak34]

Dear Freinds,

Accordinbg to the last week spot Nifty weekly highs, lows and close are : WH=4263, WL=3800, WC=4245, so calculated R1=4405.33 and caculated S1=3942.33.
For trading R1 = 4400 and S1 = 3900. Trade with sideways strategy as per 1st post of this thread as R1 ~ S1 =463 which is ouside [300, 400) range.

Regards

 

[Reji]

Dear Freinds,

Accordinbg to the last week spot Nifty weekly highs, lows and close are : WH=4263, WL=3800, WC=4245, so calculated R1=4405.33 and caculated S1=3942.33.
For trading R1 = 4400 and S1 = 3900. Trade with sideways strategy as per 1st post of this thread as R1 ~ S1 =463 which is ouside [300, 400) range.

Regards

Dear Ghosh,

Thank you very much for giving us the guidence and immence patience, which you have been rendering to all of us. As mentioned in my earlier post, I'm very new to "options". A hypothetical query.
Had the level difference of R1~S1 was in the range of 300 to 400, what should have been our strategy? As we are in an uptrend, can one buy 2 CE at S1 blindly before 10:30 AM all day from Monday to Friday, and later hedge the position (if necessary by 12:30/ 3:30),by buying PE at R1 if the trend reverse?

Regards

Reji

 

[ghosh_ak34]

Dear Ghosh,

Thank you very much for giving us the guidence and immence patience, which you have been rendering to all of us. As mentioned in my earlier post, I'm very new to "options". A hypothetical query.
Had the level difference of R1~S1 was in the range of 300 to 400, what should have been our strategy? As we are in an uptrend, can one buy 2 CE at S1 blindly before 10:30 AM all day from Monday to Friday, and later hedge the position (if necessary by 12:30/ 3:30),by buying PE at R1 if the trend reverse?

Regards

Reji

Dear Rej,

If R1 ~ S1 is within the range of 300-400 and we see an uptredn i.e. Past 15days trend is up, then, we can buy 2 calls at 10:30 AM and keep checking the trends at 12:30/3:00) for any reversals change our positions accordingly. If carrying any position then, hedge with 40-50% of the cost of total positions.

Regards

 

[ghosh_ak34]

Thanks a ton dear Ghosh. Now that we are entering the last week for September series of Options, shall we use your theory to buy October series. Are do you advise desisting from trading?

Regards,
Suresh

Dear Suresh,

Yes, after 20th of the month we should trade for the next series i.e. Oct 2008
Regards

 

[coolboy007]

ghosh sir ,

I have heard from someone that you are an expert in options , i had bought 4 lots of oct4600CE at 33 ( OTM because i am learning options and want to take min risk with options ) i sq off 2 lots at 68 and have remaining 2 with me. What would you suggest to me sir , dow closes 300+ even yesterday ?? Should i sell on monday or hold it as i have time till oct.

 

[ghosh_ak34]

Hi Ghosh Sir,

Thanks for your comments.

You are right I am not doing hedging. I have seen if we do hedging then our profit and loss remains in limit, for doing these we pay twice brokerage then ultimately we remain in loss.

I am using your strategy but only not doing hedging, you have written in privies reply that market not open always in our favor but I feel its open 75 % in our favor. For grudging this I am monitoring last 15 days nifty graph on icharts dot in site.

Yesterday I have seen as I am holding 4500 Put its open on 18th at 680RS I was taken at 487 RS on 17th 10:30 AM but the same time I was monitor 4100 Put was at 89 on 17th 10:30AM and on 18th it was open at 197RS so you can see we will be more profitable if we take ATM Call/Put.

Please let me know your comments

Its more risky ??

Dear Awachat,

Yes, you are correct by following our strategy market most of the time opens in our favour as todays 3:15 trend continues for the next day in most cases. But in market nothing could be said with definiteness. So, its always better to do some hedging otherwise one fine day we might loose all our profits in case of any sudden reversals.

Regards

 

[kalyangriet]

Dear ghosh,

What is ur call on stocks for the next week?
Which stocks would give profits for intraday (keeping in mind tht last week of september is the close of quarterly 2), is it the right time to invest or shall i wait till octber starts i.e., quarter 3 starts.
I like to trade on short term basis.

eagerly waiting for ur reply.