Option Buy Recomendations

[angdbani]

[QUOTE=fabrics;510782]any suggestions on 6100CE .Bought 3 lots at avg 98. Should I dump it or wait ?[/QUOTE]

dump it inflation at 19 %. does not look good

 

[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:

Resistance at 6130
Support at 6020

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 check strategy posted in 1st post of this thread.

Regards

 

[ghosh_ak34]

I see that you are quite an active options guy - would love to learn from your experience and would look forward to your inputs . Dan has already given me some valuable inputs

Dear TJ,

Good to see someone trying to build a system.

I will prefer use of underlying for any TA. i.e. Nifty. Dan, has rightly said volatility and global news plays an important role apart from other parameters.


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:

Resistance at 5890
Support at 5700

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 check strategy posted in 1st post of this thread.

Regards

 

[TraderJunkie]

Hi guys,

Thanks for everyone's valuable inputs. I have been refining my system as we speak and have found one situation where the system wont work.

Thats in extreme oversold or overbought conditions. For example today the NIFTY was trying to breach 5720 multiple times but failing. It even failed with the worst IIP numbers came out. Now in such situations logically one would go out and buy - and thats what I did. I bought the Jan 5700 call at 114. It would have taken my system a good time to give a buy signal (around 5780), when the JAN 5700 call was already at 152.

So my point is - as we observe and try to make sense of the charts, sometimes the charts tell us something the system can't capture or takes time to capture. In such situations there is temptation to over-rule the system - such as today.

Also - for me its key to know when and why to over-rule - because extreme conditions offer huge risk-reward due to extreme fear and extreme greed. We only have to look at th 5700 call - it went up 100% today. The PUT writers were very active today (5700 PUT in specific) , which suggested that the support of 5700 was strong.

So well - thats what I did today -I over-ruled my system and now I'm adding conditions when it would be okay to over-rule.

Thanks,
TJ

PS: I had to pay the price for not following my system's sell signal (at 6080). I booked my 1st loss due to this mistake. Till now the system seems to be good , I've got 2 wrong calls in the past 12 trades and 1 mistake I made myself.

 

[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:

Resistance at 5970
Support at 5750

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 check strategy posted in 1st post of this thread.

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:

Resistance at 5840
Support at 5670

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 check strategy posted in 1st post of this thread.

Regards

 

[TraderJunkie]

Guys - so this might look like a basic observation but I just wanted to share it by writing it out so that it clarifies my mind.

While purchasing a long straddle/strangle or any strategy it seems to be better to buy when implied volatility is low on the NIFTY. This is the time when prices settle down and you relatively pay less premium. In addition, its best to sell when markets are moving because volatility increases and so does the price.

I have been studying the payoffs of the long straddle/strangle strategy this morning and just thought this observation was worth sharing - if not already shared

Sorry if this is too basic , but I'm just trying to figure out best entry points during the day. So during the day, look for NIFTY to be stuck in a 10 point range on a 30 minutes and then buy the strategy - I'm going to test this out from next week ...

 

[TraderJunkie]

I have a question for Ghosh Sir.

In your opening post you say, you don't believe in hedging. Why do you say that ? I am running long stradle strategy right now and it seems that hedging does not work all the time.

For example the hedge would have worked on friday if one bought a 5800 CE and PE, but wont if one bought a 5700 CE and PE.

I think its critical to pick the right ITM or OFM calls/put for choosing a hedging strategy.

Any thoughts ?

Thanks,
TJ

 

[rrmhatre72]

Guys - so this might look like a basic observation but I just wanted to share it by writing it out so that it clarifies my mind.

While purchasing a long straddle/strangle or any strategy it seems to be better to buy when implied volatility is low on the NIFTY. This is the time when prices settle down and you relatively pay less premium. In addition, its best to sell when markets are moving because volatility increases and so does the price.

I have been studying the payoffs of the long straddle/strangle strategy this morning and just thought this observation was worth sharing - if not already shared

Sorry if this is too basic , but I'm just trying to figure out best entry points during the day. So during the day, look for NIFTY to be stuck in a 10 point range on a 30 minutes and then buy the strategy - I'm going to test this out from next week ...

Hi TJ,

I am working on this since last two months.

I observed that if you catch it as soon as market is opened in the morning then possibility of getting good price is much more.... I use following criteria to buy it.

I keep last day's closing price of straddle/stangle in your mind while taking trade. If opening is at same level of yesterday's closing then buy straddle at < or = to yesterday's price of straddle.

In case if i do not get at that price then wait paitiently for same or do not take trade on that day..