UNITED STATES OF BANKNIFTY

Top_Massage

Well-Known Member
Wow...your doing good job...thank you...im new to this thread...enjoyed your posting..keep it coming sir...i do have some doubts can you please clarify it?
Thank you so much buddy. Your appreciation means a lot ... good day today ... keep it up

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Top_Massage

Well-Known Member
Absolutely sensational stuff .... we already had the levels with us .... We just needed a trendy day and finally we have got one ...

We have proved ourselves that we can fight during these testing and tough days and here we are ....

thanks for your kind wishes .... enjoy money rain ...



Disclaimer: This forum is meant for educational purposes only.
 
Sure, please share your query. I will try my best to answer. Thanks

Disclaimer: This forum is meant for educational purposes only.
Thank you for your kind reply sir..
My doubt is If market order makes the tick move up/down based on the aggressive buy/sell respectively... In case of options.. The Greek plays role in the Premium price goes up if based on Delta/gama/vega wrt atm/otm strikes... How does market order and greeks interact... Suppose I put aggressive buy...same time index moves up... Then greeks add up and give more boost to my aggressive buy by making the spread expand more? And how does liquidity of spread act here for the above..... Plz kindly reply sir
 

Top_Massage

Well-Known Member
Thank you for your kind reply sir..
My doubt is If market order makes the tick move up/down based on the aggressive buy/sell respectively... In case of options.. The Greek plays role in the Premium price goes up if based on Delta/gama/vega wrt atm/otm strikes... How does market order and greeks interact... Suppose I put aggressive buy...same time index moves up... Then greeks add up and give more boost to my aggressive buy by making the spread expand more? And how does liquidity of spread act here for the above..... Plz kindly reply sir
Thanks for your query. To begin with, an option buyer should only prefer those option contracts that are liquid enough. Never ever go for those contracts that lacks liquidity and volumes.

Secondly, as per the best of my knowledge, the gap between buyer's and seller's price range should be minimum. A trader should always confirm the same while initiating orders in ATM or ITM options contract (because this problem is quite frequent in ATM & ITM options only). The bigger the gap, more chances of slippage in profits and executing trades. Also, if the spread is bigger and broader, it will be tough for a trader to exit on right price and right time.

For example:- Let me give you an example of a seriously illiquid options trade. I still remember, I suppose it was 2016. The scrip was GAIL (Gas Authority of India). I took an ATM option. It had just announced its quarter result. I was fairly new to stock options trading. I did not pay attention to spreads and liquidity and volumes. Needless to say, one should avoid such illiquid FNO scrips. Moving forward, there was no liquidity and a very very broad spread. The gap between buyer's price and seller's price was huge. I did not know anything about it. I completely ignored it. Hence, I still remember, I lost some 17000 within 3 minutes or so. The price wasn't moving as per the scrip movement due to poor liquidity and volumes. I had to sell at a very low price as the spread was broad as anything.

Soon, I realised that banknifty is the best instrument if a trader is looking for good liquidity and thin spreads even in ITM and ATM options. Thanks

Disclaimer: This forum is meant for educational purposes only.
 
Thanks for your query. To begin with, an option buyer should only prefer those option contracts that are liquid enough. Never ever go for those contracts that lacks liquidity and volumes.

Secondly, as per the best of my knowledge, the gap between buyer's and seller's price range should be minimum. A trader should always confirm the same while initiating orders in ATM or ITM options contract (because this problem is quite frequent in ATM & ITM options only). The bigger the gap, more chances of slippage in profits and executing trades. Also, if the spread is bigger and broader, it will be tough for a trader to exit on right price and right time.

For example:- Let me give you an example of a seriously illiquid options trade. I still remember, I suppose it was 2016. The scrip was GAIL (Gas Authority of India). I took an ATM option. It had just announced its quarter result. I was fairly new to stock options trading. I did not pay attention to spreads and liquidity and volumes. Needless to say, one should avoid such illiquid FNO scrips. Moving forward, there was no liquidity and a very very broad spread. The gap between buyer's price and seller's price was huge. I did not know anything about it. I completely ignored it. Hence, I still remember, I lost some 17000 within 3 minutes or so. The price wasn't moving as per the scrip movement due to poor liquidity and volumes. I had to sell at a very low price as the spread was broad as anything.

Soon, I realised that banknifty is the best instrument if a trader is looking for good liquidity and thin spreads even in ITM and ATM options. Thanks

Disclaimer: This forum is meant for educational purposes only.
Thank you for your kind reply sir...
yes...Bank nifty is the best instrument to trade... and thanx for the GAIL Example..i got clear idea on liquidity instrument to be taken into... //*thumbs up*//

and sir i want clarity on "The Role of Greek in the Premium price and aggressive market orders... How does market order and greeks interact???

Aggressive orders make the tick and greeks tell you the measured move of the tick with parameters like delta,gamma & vega...??
 

Top_Massage

Well-Known Member
Thank you for your kind reply sir...
yes...Bank nifty is the best instrument to trade... and thanx for the GAIL Example..i got clear idea on liquidity instrument to be taken into... //*thumbs up*//

and sir i want clarity on "The Role of Greek in the Premium price and aggressive market orders... How does market order and greeks interact???

Aggressive orders make the tick and greeks tell you the measured move of the tick with parameters like delta,gamma & vega...??
Sure. Let's just take the case of DELTA and it's effect on option price.

To begin with, delta is nothing but determining the numerical premium value of an option with respect to movement in the particular scrip. Let's just keep the rules simple:

-- If the DELTA reaches around 75 to 85 to 100. That particular option contract will start behaving like FUTURES contract with respect to movement in scrip. This happens mainly in the case of bigger ITM options only. That is why ITM options move so fast and are in complete sync with the price movement of a particular scrip.

-- Far and distant OTM options will always have very less DELTA value. Obviously, their value will change less with respect to change in price of scrip. That is why OTM options in banknifty are like gambling and lottery. If you go right, you may win big. But if you go wrong, you may lose complete premium. I never prefer such kind of trading. A responsible trader should not indulge in gambling kind of trading. Most of the times, OTM options end in big ZERO. They are usually the bread and butter of option writers or option sellers. Thanks

Disclaimer: This forum is meant for educational purposes only.
 

Top_Massage

Well-Known Member
Thank you for your kind reply sir...
yes...Bank nifty is the best instrument to trade... and thanx for the GAIL Example..i got clear idea on liquidity instrument to be taken into... //*thumbs up*//

and sir i want clarity on "The Role of Greek in the Premium price and aggressive market orders... How does market order and greeks interact???

Aggressive orders make the tick and greeks tell you the measured move of the tick with parameters like delta,gamma & vega...??
Coming back to your query regarding interaction between "executing big aggressive orders" and "role of Greeks" ....

I will be frank with you, banknifty and it's contracts are just TOO BIG an instrument to be impacted by big aggressive orders. Yes, initiating big aggressive orders can surely impact penny stocks or other illiquid scrips but surely not something as huge as banknifty FNO contracts. In order to do that, we need to be as big as FII or DII. Yes, there are days when the price of different banknifty weekly option contracts look abnormally high or low. But these tactics cannot hold the artificial price level for too long. Option Greeks will surely come into play to alter the price of that contract.

But yes, I have myself witnessed some big orders affecting penny stocks. It shouldn't come as a surprise because we all know that penny stocks are highly manipulated.

Anyway, to put it in short, option greeks will surely play it's part in determining value of various option contracts. In the longer run, they usually will not get affected by the heavy buy or sell orders.

Also, to add one more thing, one small hint or trick to determine when the big move is about to come is that just before a big move (in banknifty calls or puts), the spread of those calls (if in case banknifty is about to jump) or puts (if in case banknifty is about to slip) will start shrinking all of a sudden. That means that the difference between buyer's bid and seller's bid will start to diminish. And when they almost reach very near to each other, then you will suddenly notice that the price of that particular option contract will start jumping abruptly or fall at a quick pace.

Disclaimer: This forum is meant for educational purposes only.
 

Top_Massage

Well-Known Member
Alright guys .... moving forward ... we are now standing at a crucial level of 31000 (+ / - 50 points) ...

On staying below it for long enough, we may slip ....

On staying above it for long enough, we go up ...

Best of luck ...

Disclaimer: This forum is meant for educational purposes only.
 

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