Option Buy Recomendations

[naharchetan]

thanks rat; that is very inspiring!!

 

[ghosh_ak34]

Dear Friends,

For Nifty Future traders who would like to trade as per trend check strategy posted in 1st post of the thread, Nifty levels for tomorrow are as under:

Resistence at 5114
Support at 5032

If you go short 1 lot then, buy 1 lot at money or near money call and if you go long 1 lot then, buy 1 lot at money or near money put to hedge. Reco. to trade as per trend strategy posted in 1st post of this thread.

Regards

 

[VIKAS 21]

HELLO GHOSH SIR

if i sell nifty dec call [email protected],
& sell nifty dec put [email protected]
nifty spot -5078
sir can i square off it on the same day when i see nifty reaches 5100( max profit level)
sir will my margin for both put & call will be hold.
wat r the risk factors , sir please give me some insight,
at the time it is looking me very easy to earn profit from this strategy.but i know there is some prob. also

thanx

 

[msunny31]

Dear Sunny,

Writing an option means selling. And we write an option say put of a particular strike price. So, if one writes a Nifty 4700 put trading at premium of say 32 then, one is placing a sell order for Nifty 4700 put of series say Dec.

Below are my answers:
Q1) How much margin do i need to have in my account?
Ans: Margin is equilavent to Nifty Future margin. It varies from broker to broker though. If you hedge then, one gets margin discount due to hedging. Talk to broker or visit their site.
Q2) Will i get 1600 rupees(i lot of 4700 PUT) in my account immediately?
Ans: Yes. And to write an option you need to have the required. margin. Another point by default put writing is blocked by broker as put writing is very dangarous, when market falls but premium rises very fast. So, one needs to talk to broker to unblock it.
Q3) Can i sell the option immediately if it goes to some level, say 5000 or Do i need to hold it till the expiry?
Ans: There is no need to wait for any level or day to write option, it all depends on ones will based on TA, market factors, etc. Never write an option blindly, it might lead to heavy losses. And one might become bankcrupt.
Q4) In what cases will i incur losses?
Ans: Stated above if market starts falling put premium rises sharply and one starts loosing.

Q5) How much will my maximum loss be?
Ans: Unlimited.

Regards

Thank you very much Ghosh Sir for your prompt reply. I really appreciate it.

Few more questions..

Q1) If I am writing an option, then someone else must buy it. How will i know if whether when he has exercised his option?

Finally, I am a novice..What do u suggest regarding writing an option?

Once again thank u very much....

-Sunny

 

[ghosh_ak34]

HELLO GHOSH SIR

if i sell nifty dec call [email protected],
& sell nifty dec put [email protected]
nifty spot -5078
sir can i square off it on the same day when i see nifty reaches 5100( max profit level)
sir will my margin for both put & call will be hold.
wat r the risk factors , sir please give me some insight,
at the time it is looking me very easy to earn profit from this strategy.but i know there is some prob. also

thanx

Dear Vikas,

Well, 5100 straddle is okay to be written under market scenario. Will be profitable between 5300 and 4800 approx. Wait till earlier Nifty high is breached.

Margin will be hold till you square off. If Nifty moves sharply even within this range then, either call or put will move very fast. And might end up in loss.

So, keep a strict SL say Rs 2000 or so for this straddle write.

Regards

 

[ghosh_ak34]

Thank you very much Ghosh Sir for your prompt reply. I really appreciate it.

Few more questions..

Q1) If I am writing an option, then someone else must buy it. How will i know if whether when he has exercised his option?

Finally, I am a novice..What do u suggest regarding writing an option?

Once again thank u very much....

-Sunny

Dear Sunny,

An option could be exercised only when it becomes in money and that too under the absense of any liquidity. If exercised your broker will let you know about it. Brokers will not just pick your option for exercise, it will see who is earlier in the queue. And if they meet the requirement then, it might not come to you.

Its always better to go for covered write when writting stock options so that when exercised one can bear less losses as one is having the stock bought at lower levels. In case one is not having a stock and option is exercised then, one needs to buy the lots from market at higher price and give it to back.

In some cases difference is also settled in cash by the broker. Mostly depends on broker. So, talk to your broker regarding this.

Will never suggest any novice to write options. Strictly NO NO.

Regards

 

[gb333]

hello ghosh ak34
i m holding DEC NIFTY 4900 PUT 50 lots@ 90...what do i expect today. is it cross 100 or goes below 70...

 

[optionstrader]

Dear Ghosh Sir,

If you remember, you had guided me to average Unitec at 87.
I am holding it for 3-4 months.

But Ghosh Sir, in spite of some good news for realty sector & particularly for Unitec,
instead of moving up , it has started to move down.

Kindly guide, as to weather can i add more on declines ?
Or just keep holding the same.
If yes, then what levels would you guide to add more ?

And also, in the past 2 days, geodesic has shown some movements,
please guide, weather i can buy it?
If yes, then what can be the target & stop loss.

Awaiting your quickest response,

Thanks & Regards,
Optionstrader

 

[ghosh_ak34]

Dear Ghosh Sir,

If you remember, you had guided me to average Unitec at 87.
I am holding it for 3-4 months.

But Ghosh Sir, in spite of some good news for realty sector & particularly for Unitec,
instead of moving up , it has started to move down.

Kindly guide, as to weather can i add more on declines ?
Or just keep holding the same.
If yes, then what levels would you guide to add more ?

And also, in the past 2 days, geodesic has shown some movements,
please guide, weather i can buy it?
If yes, then what can be the target & stop loss.

Awaiting your quickest response,

Thanks & Regards,
Optionstrader

Dear Rajat,

I think you can hold Unitech. Lets wait and watch the sector for a while before taking any further call.

Geodesic - No idea, I do not track.

Regards

 

[ghosh_ak34]

Dear Friends,

For Nifty Future traders who would like to trade as per trend check strategy posted in 1st post of the thread, Nifty levels for tomorrow are as under:

Resistence at 5152
Support at 5064

If you go short 1 lot then, buy 1 lot at money or near money call and if you go long 1 lot then, buy 1 lot at money or near money put to hedge. Reco. to trade as per trend strategy posted in 1st post of this thread.

Regards