Incisive Nifty Trend Analysis

[pasha]

I think its a very sane strategy that you have suggested... to hedge with a call above your theoretical SL.. b'cos you can never find an ideal time to short or short at the high of day... I had taken tons of puts at 5755 and had my heart in mouth when it dropped 15% from my buy price... i think i'll use the call to hedge my position instead of putting a SL...But the better strategy would be to shift to May... as they say.. Sell in May and go away

When I see a post like this it reminds me why I hardly visit this forum anymore. To have a position with a 300 or 400 pt sl is unthinkable and then to hedge with an opposite position above the stop is even worse.
Why trade directionally??
Buy the strangle with a few extra calls or puts according to your direction and be done.
Nifty is running up since the last 7 days and you are still holding your short positions? :rofl: :rofl:

How does one go about hedging a NF short position?

By buying same number of Calls? Of which month?

After such a strong rally it is one strong possibility that price goes sideways, this would cost the entire premium amount to decay.

Thank you.

After losing 300 - 400 points, a small loss won't hurt.
Wake up, all of you.

 

[DSM]

Jamit, re. premium, its like the same as you would buy insurance for your car, of if you had a business, for your protection your assets. For e.g Reliance Industries or any business 'looses' hundereds of crores of premium by time decay for protection of their assets against fire, earthquake etc. Its a cost of doing business and a protection from risk.

After such a strong rally it is one strong possibility that price goes sideways, this would cost the entire premium amount to decay.

Thank you.

 

[DSM]

Wow. What arrogance in your post. Do you mean to advise or share your knowledge or experience.? If you wish to give advise, its better you start your own thread, or as you say you do - stop visiting the forum as you are so knowledgable, and where any idea different from yours become an object of scorn. If you wish to share your knowledge and experience, you are most welcome with whatever you want to say. But don't be arrogant and condescending. A little bit of humilty will help. Thanks.

When I see a post like this it reminds me why I hardly visit this forum anymore. To have a position with a 300 or 400 pt sl is unthinkable and then to hedge with an opposite position above the stop is even worse.
Why trade directionally??
Buy the strangle with a few extra calls or puts according to your direction and be done.
Nifty is running up since the last 7 days and you are still holding your short positions? :rofl: :rofl:


After losing 300 - 400 points, a small loss won't hurt.
Wake up, all of you.

 

[jamit_05]

Nifty is running up since the last 7 days and you are still holding your short positions? :rofl: :rofl:

It is very clear that prada is experienced and has a profitable trading plan. It is tough for newbies to understand the strength required to hold positions for 300 points drag.... let alone doing it.

The right question to ask is "Prada, Please share your trading method on this thread.".

Often simple trading plans are enormously profitable and have very low expenses due to less churning. However, one is required to hold. Requires the highest degree of maturity.

rgds.

 

[pasha]

I have no reply to anyone who tries to defend the use of a wide stop plus a hedge on top. I am well and truly flabbergasted.

Wow. What arrogance in your post. Do you mean to advise or share your knowledge or experience.? If you wish to give advise, its better you start your own thread, or as you say you do - stop visiting the forum as you are so knowledgable, and where any idea different from yours become an object of scorn. If you wish to share your knowledge and experience, you are most welcome with whatever you want to say. But don't be arrogant and condescending. A little bit of humilty will help. Thanks.

It is very clear that prada is experienced and has a profitable trading plan. It is tough for newbies to understand the strength required to hold positions for 300 points drag.... let alone doing it.

The right question to ask is "Prada, Please share your trading method on this thread.".

Often simple trading plans are enormously profitable and have very low expenses due to less churning. However, one is required to hold. Requires the highest degree of maturity.

rgds.

Don't want any method from anyone.
Let me do the math
If I have a 300 pt stop, and a mimimum RR of 1:1.5
When will I get a Nifty move of 450 pts to recover my money?
Your earlier post was perfectly correct it is quite possible that some consolidation can take place and eat the options premium.
But then very few are able to think for themselves.
I have nothing against anyone, just that there are a few threads now which would have been corrected when the forum was started.

 

[jamit_05]

Let me do the math
If I have a 300 pt stop, and a mimimum RR of 1:1.5
When will I get a Nifty move of 450 pts to recover my money?

His stop is not 300 points. I believe he is holding short positions from 6000 levels and may have booked profit near 5500 levels.

He is downright bearish and is pretty sure market will see lower levels.

What you are saying is that he should work with Trailing Stops. A correct suggestion.

 

[DSM]

For this post Pasha, I should say thanks. You have explained your line of reasoning, and how you would take a trade, again which differs from the thread owner. But every trader here is an adult and knows what he is doing, and the reasons thereof. What works for one, may not work for another, else we all would be having the same strategy. BTW if you would have been following Prada's thread, he has clearly mentioned that he holds on to his position for months. So the trade moving a week or two going against his postion, would be in the course of his trading plan. And again the market has a tendency to shake out the weak hands, run thru most stops. Even if following trailing SL's one may get stopped out of positions held on by conviction. Just my thoughts.

I have no reply to anyone who tries to defend the use of a wide stop plus a hedge on top. I am well and truly flabbergasted.



Don't want any method from anyone.
Let me do the math
If I have a 300 pt stop, and a mimimum RR of 1:1.5
When will I get a Nifty move of 450 pts to recover my money?
Your earlier post was perfectly correct it is quite possible that some consolidation can take place and eat the options premium.
But then very few are able to think for themselves.
I have nothing against anyone, just that there are a few threads now which would have been corrected when the forum was started.

 

[prada]

Point here is to make money from my short position. Buying calls is just an insurance( intention is not to make money from it) against further upside, like DSM had pointed out. I don't see consolidation in May/June series. Reversal from these levels(will wait for more clarity) will be quite sharp.

How does one go about hedging a NF short position?

By buying same number of Calls? Of which month?

After such a strong rally it is one strong possibility that price goes sideways, this would cost the entire premium amount to decay.

Thank you.

 

[Option.Trader]

When I see a post like this it reminds me why I hardly visit this forum anymore. To have a position with a 300 or 400 pt sl is unthinkable and then to hedge with an opposite position above the stop is even worse.

After losing 300 - 400 points, a small loss won't hurt.
Wake up, all of you.

I had the same opinion as you a while back.. if you see a few posts back this was exactly my question... but with the recent swings and playing in options.. .its very difficult to play after a trend has picked up... especially if you are buying.. its a whole different story if you are writing which i have tasted a bit of success (Sold May 5800PE @92 on 22nd april)..but there is limited profit with just the premium to play with.
What i liked about Prada was his conviction of how the trade would play out... and you could theoretically stay in the trade if your RR is greater than 2 with Options...and this has happened since the time i'm tracking this thread in the past 3 months. Its a whole lot different ball game of how you keep the SL.. because markets wont move b'cos Prada says so... and you do get caught... My short positions last month hit my SL of 20 points as it was expiry week.
So to look at probabilities -
Positives
1) Commodity cycle seems to have played out with Gold recovering 4%
2) Rate cut seems to be factored in
Negatives
1) Corruption scandals refuses to die down
2) Earnings from companies look to be lacklustre
3) India story looks to be played out till elections are over

So the probability of Nifty hitting the top of 5970 seems to be more likely and hence the trade on downside going forward looks more rewarding

As day traders we could look at buying on dips till May 3rd and switch to short positions a day before or on the rate cut day

 

[Option.Trader]

Point here is to make money from my short position. Buying calls is just an insurance( intention is not to make money from it) against further upside, like DSM had pointed out. I don't see consolidation in May/June series. Reversal from these levels(will wait for more clarity) will be quite sharp.

i think all bets are off with HUL story unfolding... news of Unilever buying huge stake in HUL to the tune of 29000Cr... this should hammer down the rupee and then send Nifty up up and away... i think this time Nifty should test its high of the year... 6113...huge shorts still built into HUL as per options table should really shoot it up further... absolute carnage for bears in HUL