UNITED STATES OF BANKNIFTY

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Absolutely sensational stuff .... we already had the deciding level of 29500 with us ... once it was in danger, bears took over ... and oh my god ... bears looked really powerful today .... bears have shown what they are capable of.

Fantastic day today .... most of traders were thinking of a flat rangebound day ... but we knew something special was going to happen today during second half ... I have said this so many times before ... Options trading is all about timing and not purchasing power ... Thanks for your kind wishes ... hope all of you made good money ... congratulations ... best wishes ... enjoy

Disclaimer: This forum is meant for educational purposes only.

 

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Alright folks .... Moving forward ... The range of 28920 to 29100 is a crucial range for Banknifty traders. Bulls will have to protect this range in order to look for a pullback till 29500 .... Also, please note that 29500 is now a resistance (as earlier it was a strong support) ...

Breaching and staying below spot level 29000 (+ / - 100 points), we may get to see much lower targets ..... Staying above this level, we may climb near 29500 in upcoming sessions ... but then again, 29500 is now a resistance which needs to be dealt with ... good luck ... choose wisely ....

Disclaimer: This forum is meant for educational purposes only.

 

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We are now standing at a crucial spot in Banknifty i.e. range of 28920 to 29100 ... it's make or break level ... let's see what happens

Disclaimer: This forum is meant for educational purposes only.

 

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Well ... it was a day meant for small zig zag moves and that resulted in intense premium erosion in weekly options .... which is good in a way

Somehow, bulls have been able to save 28920 which is the lower base of support range 28920 to 29100 ... But will they be able to save this range tomorrow or will they surrender?? Tomorrow we shall know for sure.

Meanwhile, I tried to make use of this same range twice in a day. Initial trial with 29300 CE (during first half) failed due to heavy premium erosion and small volatile moves. However, I tried once again (29200 CE) around 1:15 PM and hardly stayed for 30 minutes. I sold this around 1:50 PM or so. And it produced decent money.

Let's see what happens tomorrow .... Enjoy

Disclaimer: This forum is meant for educational purposes only.

 

[Jagadeesh T]

I kept 28900PE 09th may.. Shall i hold or exit??

 

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I kept 28900PE 09th may.. Shall i hold or exit??

Hi ... Thanks for your query. To begin with, weekly expiry option premiums are on extremely higher side. This is majorly due to VIX wondering around 26 mainly because of ongoing election mania. This has done nothing but pumped up the premiums abnormally. This is something option buyers don't like at all.

For example:- Today, I initially tried making money through calls during first half but then again, it failed because of relentless premium erosion which occurred today. That is one of the reasons why I hate taking a trade during first half on any day for that matter. Hence, I am just trying my best to strictly stay intraday these days. Carrying forward a trade is more or less like a lottery these days (it can do wonders or it can fail miserably).

I am planning to take a trade tomorrow either around 2:05 PM, 2:15 PM or 3:00 PM. These three time slots are proven expiry trade triggers (historically).

Now, coming back to the PUTS you are carrying forward. If bears can breach and stay below the support range of 28920 to 29100 (+ / - 50 points) for long enough, then surely PUTS will surge once again tomorrow. It will be interesting to see if bears can overpower bulls tomorrow and whether they can force bulls to surrender.

Meanwhile, if you look at both sides, premiums are abnormally high especially on calls side (see the screenshot of 29100 call & 28900 put below of 9th May expiry). This is when the spot is exactly in between them i.e. around 29000 spot level. Option writers may put pressure on one of the sides right from the beginning at 9:15 AM. Let's see what happens tomorrow. Thanks .....

Disclaimer: This forum is meant for educational purposes only.

 

[Jagadeesh T]

Thank you for ur time.. I am new to banknifty option trading.. To be frank i didnt understood some points u explained. I have one doubt
When bank nifty is down by 0.8% 28900PE is trading at 50-60 levels.
When bank nifty is diwn by 1.2% then also 28900PE is trading at 50-60 levels only.

If possible can u help me in explaining this with one example

 

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Thank you for ur time.. I am new to banknifty option trading.. To be frank i didnt understood some points u explained. I have one doubt
When bank nifty is down by 0.8% 28900PE is trading at 50-60 levels.
When bank nifty is diwn by 1.2% then also 28900PE is trading at 50-60 levels only.

If possible can u help me in explaining this with one example

This is because the whole universe of options trading runs on only one principle and that is called TIME DECAY. Options are time bound. Farther options (means OTM options) will become zero (0.05 to be precise) if spot level does not cross them substantially.

For example: Tomorrow, even if spot closes at 28950, that will ensure that 28900 PE (9th May expiry) closes at 0.05 (which means ZERO). This is because tomorrow is expiry which means death of all contracts pertaining to 9th May date of maturity. All options belonging to 9th May expiry will expire tomorrow at 3:30 PM irrespective of the fact if one decides to exercise them or not. In other words, it means nobody will be able to hold them anymore since tomorrow is last day of their contractual life. For 28900 PE to become 100, spot level will have to touch at least 28800 (though still it will be 75 to 80 only even if spot touches 28800 mainly because of fluctuations caused by STT duty factors).

Hope you understand. Need not worry. It will take some time to understand and study the effects of TIME DECAY on options. I would recommend you to refer some good sources on internet regarding TIME DECAY in options trading. There's some pretty good stuff if you google. Thanks.

Disclaimer: This forum is meant for educational purposes only.

 

[Jagadeesh T]

Thank you so much sir. Appreciated your time and effort

 

[Jagadeesh T]

Which is the best time to exit on expiry date.
Bank nifty is down now.. Please help