Trade Nifty Options Intra Day Using Hedging Principle

[ankurpcl]

Todays Dragon which is Building up in Nifty as below at 12:07 PM:

6200 Put VWAP: 91
6200 Call VWAP: 93

Strategy 6200 Put can be sold with levels of 100 and above
6200 Call can be sold with levels of 102 and above.

After that apply same 10% rule and consolidation zone rule to
capture next level.

Profits and Losses for this will be shared after market hours.

 

[ankurpcl]

Today's Trade Summary as below:
No trades done as market was moving narrow range for complete day.

 

[traderite]

Todays Dragon which is Building up in Nifty as below at 12:07 PM:

6200 Put VWAP: 91
6200 Call VWAP: 93

Strategy 6200 Put can be sold with levels of 100 and above
6200 Call can be sold with levels of 102 and above.

After that apply same 10% rule and consolidation zone rule to
capture next level.

Profits and Losses for this will be shared after market hours.

I am still curious to know what is your criteria of 10 percent (%) difference ?

Also do you prefer ATM strikes only or other strikes too. Regarding VWAP , it is the Volume Weighted Average Price so do you get this figure on your own calculations or this is the ATP which is shown in the Trading Terminal ?

Thanks.

 

[ankurpcl]

First, I am not using any complex option software's to trade markets.
Reason: I am not hedge fund manager but simple Options trader

VWAP, calculated from www.nseindia.com website under derivatives section and its free for all.

Reason for 10% is based on my experience in options trading and till now my returns are every time positive whenever I have applied this irrespective of market direction. It has power to absorb nifty volatility of +/- 100 points provided it designed and calculated very carefully.

Thanks!

 

[ankurpcl]

Options Trades for Today:

We have no dragon in Nifty, so such related trades will not be done.
Instead following strategy planned for today.

SELL CALL 6200 @ 81 (5 Lots), @ 89 (5 Lots) with SL as 100

Profits/Losses will be shared after market hours.

 

[ankurpcl]

Todays Trade Summary as below:

Strategy: SELL CALL 6200 @ 81 (5 Lots), @ 89 (5 Lots) with SL as 100

Trades Done: 81 Premium Captured
78 Premium Returned
Net Points Gain: 3
Total Gain = 3*50*5
= Rs 750

Tomorrow strategy will be combinational of VWAP and binomial distribution.
Don't miss that one.

 

[ankurpcl]

Options Update Today at 11:10 AM

We have market up from levels of 6150 support levels. Any new strategy will be designed once Nifty hit levels of 6280 and above.
Till then its wait and watch situation.

 

[gmt900]

Todays Trade Summary as below:

Strategy: SELL CALL 6200 @ 81 (5 Lots), @ 89 (5 Lots) with SL as 100

Trades Done: 81 Premium Captured
78 Premium Returned
Net Points Gain: 3
Total Gain = 3*50*5
= Rs 750

Tomorrow strategy will be combinational of VWAP and binomial distribution.
Don't miss that one.

Hi Ankur,
First of all, I find your strategy very useful although I have not taken any trades so far.

While I have understood the general principles, I would like to know :

How the pair of call and put strike prices is chosen?

How do you calculate the VWAP of the call and put options of the chosen strike prices from nse data ?

What is the time when you decide whether to take trade or not?

Does one wait till say 3.15 or close trade earlier depending on profit or loss accrued?

I know that binomial distribution is a term used in statisics. How does one apply the concept for intraday trading?

 

[Purushotham]

Hi Ankur,
First of all, I find your strategy very useful although I have not taken any trades so far.

While I have understood the general principles, I would like to know :

How the pair of call and put strike prices is chosen?

How do you calculate the VWAP of the call and put options of the chosen strike prices from nse data ?

What is the time when you decide whether to take trade or not?

Does one wait till say 3.15 or close trade earlier depending on profit or loss accrued?

I know that binomial distribution is a term used in statisics. How does one apply the concept for intraday trading?

May be it could help

Link : http://www.nseindia.com/live_market...ument=FUTIDX&type=-&strike=-&expiry=30JAN2014

 

[ankurpcl]

Thanks Purushotham, You have pasted correct snapshot.

As far as Correlation between VWAP, Puts and Call Strike Prices and on top of that apply your own designed binomial calculations depends on Support and Resistance which developed across multiple strikes on daily basis.

Thats the reason when you trade options you need to keep an eye on market watch on daily basis as professional traders are very fluent in positioning the trades based on bias which developed across market whether positive or negative.

In Short, every thing comes with experience. Its not something which you learnt today and start applying from tomorrow and your portfolio turns into positive every day. Same applicable for me too.