A Beginner's way to trade options.

[TFL]

What you are looking for to enter in the June option?[/QUOT

Looking to sell 4400 call June series, Hari....

ST

Thank you dear ST. Your posts are great triggers to learn in options trading.
I am holding a good bunch of long portfolio so I am getting much margin by load against shares from my broker.

What's the strategy for your SELL JUNE 4400 CE?

 

[Smart_trade]

Thank you dear ST. Your posts are great triggers to learn in options trading.
I am holding a good bunch of long portfolio so I am getting much margin by load against shares from my broker.

What's the strategy for your SELL JUNE 4400 CE?

With Govt swearing in....positive triggers over....Govt will take some time to get cracking with reforms...I expect 4400-4500 to be a good resistance zone...

Margins are heavy and hence not many can write options....I expect some more call writing on first day of new series (once May margins are free and call premiums to come down in next 4 days...betting on that to eat some premium due to time decay and fall in volatility expected....

Playing with fire though but it is sufficiently further off so that I can take some salvaging action if goes against me....

ST

Sold 4400 June call at 127.50

ST

 

[Smart_trade]

I had sold June Nifty 4400 call at 127.50.....covered the same today at 86

ST

 

[humble]

Hi ST Da,

I am a newbie to Options and would like to get a few doubts cleared from you. Please do reply when you have time.


As of now, I understand that for newcomers who would like to trade options, should only consider "Buying" the "Calls/Puts". As this would
limit the risk to the "premium" only. I am personally of the opinion that it would easier to understand trading with a live example.

Let's say today:

1. I "Buy" a Nifty CE4100 at Rs84. Assuming it's 1 lot and the Nifty closes below 4100 by expiry, what would be the loss?

2. I "Buy" a Nifty CE4100 at Rs 84. Assuming it's 1 lot and the Nifty closes above 4100 by expiry, what would be the profit?

Basically, I am unable to understand the the worst case scenario for "Buying" "Call/Puts", i.e loosing the entire premium. In the above "1",
what would be the "premium" that is lost?

Thanks and Regards,
-Sri

 

[swargam]

You can get 50% profit provided the Nifty remains below 4300 till about 15th of June.... If Nifty shoots uo....you will start loosing money...

The strategy is correct if your view on Nifty is stable or mildly bullish in June .... From your question you appear new in options..have you understood the risk if mkt shoots up ? Not sure whether selling options is a right strategy for new traders in a bullish market... But if it hits your stoploss,book your loss and get out of the position...
My best wishes for this trade ....

Smart_trade

ST Sir,

Thanks for your reply.
Profit booked at 149.80. I am not new to Options but I am new to shorting options. I am almost 2 years old kid in long options.

Thank you very much for your advice

 

[swargam]

Hi ST Da,

1. I "Buy" a Nifty CE4100 at Rs84. Assuming it's 1 lot and the Nifty closes below 4100 by expiry, what would be the loss?

Loss will be your entire premium: ie, 84X50

2. I "Buy" a Nifty CE4100 at Rs 84. Assuming it's 1 lot and the Nifty closes above 4100 by expiry, what would be the profit?

Profit : [ NIFTY_SPOT_AT_EXPIRY - ( 4100+84) ] X 50

Gurus of This forum, Please correct me if i am wrong

 

[Smart_trade]

ST Sir,

Thanks for your reply.
Profit booked at 149.80. I am not new to Options but I am new to shorting options. I am almost 2 years old kid in long options.

Thank you very much for your advice

Well done swargam......sorry for my caution...but thought if you are new to options,I must caution you on risks as you had sold call....Great going....

Smart_trade

 

[bikerzofdel]

i m new over here guru's please help me out or teach me how to trade properly in options

 

[swargam]

i m new over here guru's please help me out or teach me how to trade properly in options

Welcome to the Jungle

Here is the first one for you.
http://www.investopedia.com/university/options/

 

[Smart_trade]

Summary of our trades done in May 2009

Trade -------------------------- Profit(+)/
....................................... loss(-) in points

1) Verticle Spread long Nifty3500 May put and ........ - 39
short 3400 put bet debit Rs 45 Salvaged Rs 6.00

2) Long Nifty 3700 straddle cost Rs 298,realised Rs 656 ....... +358

3) Short 4000 May put @ Rs 52.00 covered at 10.35 .......... +41

4) Short 3900 May put @ 36,covered @4.10 ................ +31

5) Short Nifty 4400 June call @Rs 127.50 covered .......... +41
at Rs 86

--------
..........Profit ......... + 432

Major gain was in straddle bought before election results.

Best Wishes,

Smart_trade