Option Buy Recomendations

[coolboy007]

Dear Coolboy007,

Today it will be uptrend. If you want to exit then, exit from both call and put writes. It seems tomorrow this rally will fizzle out so not to worry much if you do not exit today!

Regards

Thanks a lot for your analysis ghosh sir.

 

[ghosh_ak34]

Dear Friends,

Tomorrow we might see a up trend. Watch out for 2820 on upside and 2680 on lower side. If Nifty breaks above 2820 then, up trend might continue and likewise if Nifty breaks below 2680 Nifty will show down trend.

Above is for Nifty Future traders only. Go long and short on Nifty as per trend check strategy posted in 1st post of this thread and hedge with at money option.

Regards

 

[terminator_123]

Ghosh sir,

I have a general doubt regarding stop loss while trading options. If I have to keep a stop loss just below a support level (after buying at the support), how do I translate the nifty level to option premium ?
example: if nifty support is at 2645 and if I have to stoploss at 2640, how should I calculate the option premium at 2640 ? (since the trigger will be based on option premium)

Thanks in advance...

 

[ghosh_ak34]

Ghosh sir,

I have a general doubt regarding stop loss while trading options. If I have to keep a stop loss just below a support level (after buying at the support), how do I translate the nifty level to option premium ?
example: if nifty support is at 2645 and if I have to stoploss at 2640, how should I calculate the option premium at 2640 ? (since the trigger will be based on option premium)

Thanks in advance...

Dear Terminator,

Levels that I have given in my previous posts are for Nifty futures not for options. To trade in options will reco. to follow strategy posted in 1st post of this thread. To calculate the premiums at a particular level use options calculator.

Regards

 

[fast_rizwaan]

dear ghosh_ak34,

Thank you for starting options thread, and it is indeed useful.

Please explain covered call settlement,

covered call is buying shares and selling call of the underlying at a premium; example: buying tatasteeleq 382@ 150 and selling tatasteel-ca-160@13rs

if price moves above 173 then the buyer will exercise the call-option. else we get 12*382 (lot size) = 4584rs profit and still keeping the underlying.

do I need to buy shares in delivery, or is it okay to go long (buy) a 1 future contract and save "brokerage" (delivery brokerage is huge compared to futures and future's settlement is T+1, whereas delivery takes T+2)

Are options settled in cash, or do i need to deliver shares (i don't know who and how will the shares be delivered, btw)

for a Call option:

1. what happens when buyer exercises his right, do i need to transfer shares or cash is deducted from my account?

I just want to save "delivery brokerage" and "2-3 days" of cash delay.

2. Can I have 1 future lot of 25dec and sell 1 call @ 160 dec25 option for a good trade which will get profit even when exercised?

Please guide. Thank you

 

[fast_rizwaan]

About Option Brokerage:

it is same as futures? the total amount * 0.03% (buy amount +sell amount * 0.03%) or is it charged at strike price or premium or underlying?

tatasteeleq ca 160@ 13, 25december
strike = 160
premium = 13
underlying = 151.5

lot size = 382

will it be
1. strike price based = 160*382*2(buy+sell)*0.03% = 36.672
2. premium based = 13*382*2(buy+sell)*0.03% = 2.9795
3. underlying price based =151.5*382*2*0.03% = 34.7238

thanks.

 

[pkamalesh]

Ghosh sir.....have gone back to days and started taking options now...have taken 2800 call and 2600 put...got stuck in between now...nifty now at all giving a proper movement...what do u suggest???

 

[ghosh_ak34]

Dear Friends,

For the week starting Mon-Fri, R1=2800 and S1=2700. R1~S1 is outside the range [300,400) so will reco. to trade in options as per sideways strategy posted in the 1st floor. Nifty is still struggling to move upwards. Overall Nifty is still bearish.

For Nifty futue traders Monday's (1st Dec. 2008) reco. levels are:

Nifty Resistence = 2790
Nifty Support = 2745

Trade in Nifty furures as per trend check strategy posted in 1st post of this thread.
If you Long Nifty 1 lot then, but 1 lot at money put and if you short Nifty 1 lot then, buy 1 lot at money call to hedge.

Regards

 

[ghosh_ak34]

Ghosh sir.....have gone back to days and started taking options now...have taken 2800 call and 2600 put...got stuck in between now...nifty now at all giving a proper movement...what do u suggest???

Dear Pkamalesh,

I have always reco. to avoid strangles. Try to exit this strangle and trade as per option trading strategy stated in 1st post of this thread.

Regards

 

[SriVijay]

yesterday being expiry day....i did one nasty thing.....
i bought 2000 quantity 2700pe and 2000 quantity 2750 ce ( expiry 27nov) for a combied debit of 30 points. ( pe 15, ce 15) around 12 pm....

My idea is due to expiry day premium will move with congestion to nifty.....so if nifty move atleast 100 points either side i will make 80 to 100 K....

But today i realised what the elders saying "i have blood pressure" like things...

made me mad for 3 hours....my combined premium value shuttling between 15 to 25 ......i have to pay brokerage another 4 points...
Atlast around 3 pm i managed to square of my CE in range of 29 to 31....
When i squared off my ce i looked upon my pe....its traing at 2.5 points....
30 mins left ....so if it goes down i will get my money and also a small profit.....i dreamed
for every second passing pe points reducing ....it become to 0.5 by 3.20 pm

I today experienced the power of options with time value......

Finally i ended that day by paying my broker Rs.8750 .....( my net loss)

kindly ignore my post if it is not warranted to this thread.....simply i thought that i must write my experience ......now i feel somewhat free...

regards
vijayakumar