Nifty Open Interest Analysis

[jamit_05]

Here goes.

I will take a Long Strangle, but one leg at a time.

First, I will buy the CE leg. Since, the prices have corrected well, I will buy the CE now.

6000 CE Mar Bought @ 24

After a decent move up, I will buy the PE leg.

 

[jamit_05]

@OT

Now even 5900 CE is above 70L; Strength in uptrend has gone !!

 

[internet_fanbboy]

What if you do not get a decent move up ?

Here goes.

I will take a Long Strangle, but one leg at a time.

First, I will buy the CE leg. Since, the prices have corrected well, I will buy the CE now.

6000 CE Mar Bought @ 24

After a decent move up, I will buy the PE leg.

 

[jamit_05]

What if you do not get a decent move up ?

Working with a SL below 5790; Will lose 10 points per lot.

 

[Option.Trader]

Here goes.

I will take a Long Strangle, but one leg at a time.

First, I will buy the CE leg. Since, the prices have corrected well, I will buy the CE now.

6000 CE Mar Bought @ 24

After a decent move up, I will buy the PE leg.

Its called as timed speculation, wherein you are trying to take advantage of best of both world. Should work OK as long aS you are nimble
But don't play intra day based on Oi , its too volatile

 

[jamit_05]

@OT

Although market recovered and is near 5900 SPOT, 5900 PE has lost 10 L in OI... what does that indicated?

 

[SexyTrader]

@OT

Although market recovered and is near 5900 SPOT, 5900 PE has lost 10 L in OI... what does that indicated?

We are going down now! Inflation data is out...the fun is over

 

[jamit_05]

Working with a SL below 5790; Will lose 10 points per lot.

Lets analyse the risk reward ratio for the legging in of long strangle. Lets see whether the effort was worthwhile.

Initially, a risk of 10 points was taken when 6000 CE was bought at 24.

Now, 6000 CE is up 8 pts and 5800 PE has fallen 23 pts. So, I gain around 30 points.

An RR of 1:3

So, yes, that risk was worth taking.

Purchased 5800 PE at 23 points. Total cost of 200 points strangle 24+23 = 47;

Now, after RBI decision I should consider exit at 150 points move to again get an RR of 1:3

 

[jamit_05]

We are going down now! Inflation data is out...the fun is over

I want the bull run to end... but damn it... the data does not reflect it.

After all said and done, currently at Spot 5900:

5900 CE at 135
5900 PE at 80

CE > PE by 70% !! This is the case in every month... This is mad. Bulls are winning hands down.

 

[jamit_05]

@ OT

So much discussion and knowledge about Options should be put to some concrete use. Since, you are most knowledgeable you should start a thread which follows only one strategy, which is the most challenging:

Short Strangle !! The way market makers do !!

This will bring about all sorts of problems and questions. It will be probably the most informative thread on Options in TJ. It will attract lots of participation also, since it will give consistent income week after week (tks to Theta)