Option Buy Recomendations

[coolboy007]

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

Oh yaar , that was a real bad way o lose money without even knowin anything. Sorry for the loss but atleast you have learnt one lesson. Anyways yr dream was good but for the first time in many exp mkts were stagnant and ended where they started.

You know once i entered a strangle to make money even opposing ghosh sirs rule of not tradin in current months option after 20th. I entered and after 2 days prem reduced rapidly, my loss was 6k , i was so horrified i booked the loss but next day the famous fall of 300 points took place which took nifty to 2600 within a day , i chcked S/W and it showed profit as 8k I was so disheartened on my kismat but i learnt a lesson hard way.

 

[ghosh_ak34]

Sir,

If at Opening one write both call & put of same strike price (nearest to Nifty's opening price) & squares of at day end what is the Risk kindly explain.

Miltu.

Dear Mitu.roy,

The risk is unlimited, if you do this w/o any technical analysis. Use option calculator to calculate the profit/loss from it. Don't assume and trade. Its very risky and may end up in losses. Though you may be lucky sometimes but not always.

Regards

 

[tomdickpary]

sir can u pls tall me what is > at money .in money calls or put .becouse i want to tread with nifty fu

 

[ghosh_ak34]

sir can u pls tall me what is > at money .in money calls or put .becouse i want to tread with nifty fu

Dear Tomdickpary,

An option is at-the-money if the strike price of the option equals the market price of the underlying security

For example, if XYZ stock is trading at 75, then the XYZ 75 option is at-the-money. You can essentially think of this as the break-even point (when you don't take into account transaction costs).

In Money
1. For a call option, when the option's strike price is below the market price of the underlying asset.

2. For a put option, when the strike price is above the market price of the underlying asset.

In other words, this is when your stock option is worth money and you can turn around and sell or exercise it for a profit.

To learn options please refer to 888options dot com, investopedia dot com and traderji.

Regards

 

[bandlab2]

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

vijay, you are lucky to escape with minimal loss. buying options after 12 noon on expiry day needs lot of courage. in my opinion, you should have adopted this strategy 1 day before even though the premium would be high.

 

[coolboy007]

Vijsir ,

The strategy adopted may be wrong but it was super cool. Nifty usually has huge swings on exp day but this time Vol were less bcoz of blasts and you should have kept that in mind. Otherwise , man thats really cool strategy if it goes wrong , you will make huge money even if it had gone 50 points here or there. BAd luck

 

[arjit]

hi CB,have u sold ur CE or still holding.i have 2300 PE at Rs.70.Any target for nifty for coming week.

 

[coolboy007]

hi CB,have u sold ur CE or still holding.i have 2300 PE at Rs.70.Any target for nifty for coming week.

Arjit ,

Am holding my Dec ce. Next week may show some upside , i am almost certain of that. One more close above 2740 will power the bulls and we may trgt 2865 soon. If we close above 2865 soon , there is a triangle formation in which chances of hitting 3050 will be very high. SL for ur short should be 2865 on closing basis which could be the turning point.

 

[arjit]

Brother CB,thanks for ur view.I will keep 2865 in MIND.

 

[ghosh_ak34]

Sir,

While writing both Call & Put at same strike ,does it not oppose each other then why is this 'unlimited Risk' ,plz explain i am absolutely novice.

Miltu.

Dear Miltu,

You can refer to any option calculator to calculate the risk of writing both call and put at the same strike price and to learn about how options work please refer to 888options dot com or traderji itself.

Regars