Explosive NIFTY option trade

[piyushonline]

I have been toying with this idea from last couple of months and wanted to know if a feasible strategy can be implemented to get sizeable profit from options trade.

1. To trade options during the expiry day
2. Collect data from historical expiry days, Open Interest and Pricing Patterns
3. Arrive at possible expiry range - This is not a technical chart game. This is pure hunch if you see last three/four expiries.
4. Take a position after all due diligence (this is a go/no go situation). Stop loss wouldnt work, as the price will fluctuate largely.
5. WIN/LOSS strategy - either reap good profit or forget your investment (Speculation)
6. Finally the whole strategy depends on probability game (if we perfect a strategy to a level that we can get 50% of trades right in our favour with 300% profitability, other trades expire worthless). We can get 50% profit on our portfolio.

Question is, can a strategy be developed around this. What is the viability and probability of success in this.

Any views/ideas from peer groups. I do not know the answer, but it think this may workout if analyzed properly.

Finally what excites me is the expiry of the Nifty 3050 Call option in March 2009. Attached is the screenshot.

 

[munde_77]

I have been toying with this idea from last couple of months and wanted to know if a feasible strategy can be implemented to get sizeable profit from options trade.

1. To trade options during the expiry day
2. Collect data from historical expiry days, Open Interest and Pricing Patterns
3. Arrive at possible expiry range - This is not a technical chart game. This is pure hunch if you see last three/four expiries.
4. Take a position after all due diligence (this is a go/no go situation). Stop loss wouldnt work, as the price will fluctuate largely.
5. WIN/LOSS strategy - either reap good profit or forget your investment (Speculation)
6. Finally the whole strategy depends on probability game (if we perfect a strategy to a level that we can get 50% of trades right in our favour with 300% profitability, other trades expire worthless). We can get 50% profit on our portfolio.

Question is, can a strategy be developed around this. What is the viability and probability of success in this.

Any views/ideas from peer groups. I do not know the answer, but it think this may workout if analyzed properly.

Finally what excites me is the expiry of the Nifty 3050 Call option in March 2009. Attached is the screenshot.

This is illiquid option try 3000 , 3100 or 3200 and not 3050, 3150 or 3250

 

[linkon7]

could not open the attached doc file. normally trading options on the last day can be very profitable and risky as well. lets try to find out a way.

 

[harmeetsg]

HI guys,

I am really interested in this one..lets try out this i have implemented a regression analysis which may come handy.. we need data for last one week for past atleast 2 years to get broader sense of the variations..and also is there a way to get high frequency data for options..

first of all we need to get the data..does anybody has that..

mainly the OI, volume and change in OI..these things for all nifty active options atleast 200 points up and down..


suggestions are always welcome...

Harmeet.

 

[piyushonline]

We can get data from NSE website (historical data). Need to download each of the expiry and strike price individually.

Does somebody have better way to get the data ?

This months option should give great volatality (music has started, nifty moved 1000 points in last 20 odd session, PUT lost their value like anything, CALLs gained excessivel). Huge interest in PUT as well good Call ratios....

Market can give excellent return if we can unlock this mystery (position rightly on the option which are worthless now and turn around in next three sessions).

I really like the game on the last day

 

[morgan2074]

Hello everyone.
I am new in this trading field and dont know much about how to trade to earn better profits, So please suggest me some website that helps me in earn more.

Binary options

 

[ArifKhalak]

trading options at expiration day

Can any body help me to get detailed knowledge on the above topics.ie..related books,links,websites,blogs.what will be the strategy for to-morrow31/5/2012

 

[mando25]

Sometime back I did a backtest on Options. It showed an annual profit of 500+ points per lot by just buying an option straddle at the start of each month and square off at expiry. I had tested just for 1 year - 2011. Interested persons can test more and compare the results

 

[DanPickUp]

Sometime back I did a backtest on Options. It showed an annual profit of 500+ points per lot by just buying an option straddle at the start of each month and square off at expiry. I had tested just for 1 year - 2011. Interested persons can test more and compare the results

Fine

As you did the back test it will be no problem for you to show the results in details for each month in 2011.

Nifty live option traders then will be able to compare there results with yours and we finally will see how accurate your back testing was.

It may will be to your side or it may will be to the life nifty option traders side.

Let's see.

Good trading

DanPickUp

 

[mando25]

@DanPickUp
There is no detailed acktest report for this. I made an excel file with the quotes and will post it once I fond it.
It is a simple test and you can do it urself. Start from Jan 2011, check the price of Nifty and pick out quotes of ITM Call and Put Options on 1st of each month (it will range betwen 100 to 130/140). Then calculate the net cost of the straddle ((this will range from 200 to 260/280 per pair). At the end of the month, if the expiry is 300+ points away from your strike price, calculate the profit by the difference.

Those who want to try can try and incorporate in their trading. Ther eis no comparison required with any "live option traders". Whatever that is