Option Buy Recomendations

[ghosh_ak34]

Dear Friends,

My weekly view:

I am a option trader so would like to provide weekly/monthly view instead of daily. I am more of a positional trader than a day trader.

Some consolidation is on cards. Nifty's upward trend is still intact. I think till 5134 (50 day EMA) is not broken we option traders can make money by writting straddles or writting Nifty OTM calls of 5400, 5500. Hedge by EOD if required.

One thing we all might have noticed that after 12:30 PM market(Euro mkt opens) changes the direction most of the time. So, I will reco. daily Future traders to square off all positions before 12:30 PM and take fresh position after finding fresh trades in the after noon session.

Regards

 

[columbus]

Dear Friends,

Am back.

For Nifty Future traders who would like to trade as per trend check strategy posted in 1st post of the thread, Nifty levels for Monday are as under:

Resistance at 5312
Support at 5250


If you go short 1 lot then, buy 1 lot at money or near money call and if you go long 1 lot then, buy 1 lot at money or near money put to hedge. Reco. to trade as per trend check strategy posted in 1st post of this thread.

Regards

Dear ghosh,

Good to see ,you are back.
The virtue of a person mainly depends on his HUMBLENESS.
We do find here some immature persons.With a big heart you have to excuse
them.In fact you should not respond to it, because they are too ignorant.
But you excused them.Keep it up.

 

[sibumajumdar]

Dear Friends,

My weekly view:

I am a option trader so would like to provide weekly/monthly view instead of daily. I am more of a positional trader than a day trader.

Some consolidation is on cards. Nifty's upward trend is still intact. I think till 5134 (50 day EMA) is not broken we option traders can make money by writting straddles or writting Nifty OTM calls of 5400, 5500. Hedge by EOD if required.

One thing we all might have noticed that after 12:30 PM market(Euro mkt opens) changes the direction most of the time. So, I will reco. daily Future traders to square off all positions before 12:30 PM and take fresh position after finding fresh trades in the after noon session.

Regards

Mr Ghosh,

On Friday I took the following pos....Long STRADDLE 5300 Jul CE (112.10) with PE (132.10). Cost 244.2 for 1 Lot....EOD Loss of 8.20 being108.6 & 127.2 respectively.

Another pos is Short STRANGLE Jul CE-5400-68.90 with PE-5200-84.50....coleected 153.40....EOD Gain of 2.20 being 60.40 & 90.80 respectively.

Overall Loss is 6.20 (8.40-2.20). All pos is 1 LOT each.

AS you have suggested for Sht Straddle / Sell of OTM Call, I need your guidance for conducting this both pos. Plz let me know how much danger am i in & what should be the ideal way to deal with it.

Any one can express their opinion as iam a learner....THANKS..SLM

 

[ghosh_ak34]

Dear SLM,

Buying straddle works fine when eitherway high movement is expected. If Nifty starts drifting down sharply then, your straddle might start giving you profits. Currently, market's up trend is still intact. 9 days of higher lows, normally a rally of this kind breaks by 14th day of its up trend. And normally, a sharper downtrend is seen after 4-5 days of red candle days (not necessarily in a row). So, unless we see this and 5134 is not broken will not reco. buying a straddle. One more point ADX=14 is also waiting for a cross over, and W%14 = 30 cloud is still intact. (Over bought)

Your strangle write is profitable because of Nifty expected to be in narrow range. Please watch out for 5201 (20 day EMA) carefully.

Straddle write or strangle write is profitable when we see NR (Narrow Range) days. We can see 80% of the time market to remain in NR zone.

Regards

 

[sibumajumdar]

Dear SLM,

Buying straddle works fine when eitherway high movement is expected. If Nifty starts drifting down sharply then, your straddle might start giving you profits. Currently, market's up trend is still intact. 9 days of higher lows, normally a rally of this kind breaks by 14th day of its up trend. And normally, a sharper downtrend is seen after 4-5 days of red candle days (not necessarily in a row). So, unless we see this and 5134 is not broken will not reco. buying a straddle. One more point ADX=14 is also waiting for a cross over, and W%14 = 30 cloud is still intact. (Over bought)

Your strangle write is profitable because of Nifty expected to be in narrow range. Please watch out for 5201 (20 day EMA) carefully.

Straddle write or strangle write is profitable when we see NR (Narrow Range) days. We can see 80% of the time market to remain in NR zone.

Regards

Mr Ghosh,

Thanks for your elaboration. Plz tell me at what stage i shall quit 5300 STRADDLE if mkt does not brk in one direction AND at what stage to quit 5400/5200 STRANGLE IF mkt breaks either direction. Though u advised me to keep eye on 5201 but its not very comprehensible to me. Is it so till brks 5201 i wont sq off either position ? Plz help me to take corrective measure...Thanks again....SLM

 

[ghosh_ak34]

Mr Ghosh,

Thanks for your elaboration. Plz tell me at what stage i shall quit 5300 STRADDLE if mkt does not brk in one direction AND at what stage to quit 5400/5200 STRANGLE IF mkt breaks either direction. Though u advised me to keep eye on 5201 but its not very comprehensible to me. Is it so till brks 5201 i wont sq off either position ? Plz help me to take corrective measure...Thanks again....SLM

Dear SLM,

Nifty 5300 Straddle buy : If Nifty doesn't show any movements for next 2-3 days eitherways then exit. or If your SL=Rs 2000 per lot (say) is met then, exit.

Strangle Write: If 5201 is broken (EOD basis) then, exit from strangle write next day. Otherwise keep an hold. I am slightly more bearish than bullish so have asked you to watch 5201 instead or 5400.

Normally, what happens due to some sharp movement in either direction option premium shows abnormal increase during intraday, so if you could hold for next day you might get better bargain to sqr. off. the option.

Regards

 

[sibumajumdar]

Dear SLM,

Nifty 5300 Straddle buy : If Nifty doesn't show any movements for next 2-3 days eitherways then exit. or If your SL=Rs 2000 per lot (say) is met then, exit.

Strangle Write: If 5201 is broken (EOD basis) then, exit from strangle write next day. Otherwise keep an hold. I am slightly more bearish than bullish so have asked you to watch 5201 instead or 5400.

Normally, what happens due to some sharp movement in either direction option premium shows abnormal increase during intraday, so if you could hold for next day you might get better bargain to sqr. off. the option.

Regards

Mr Ghosh.

Thank u very much for your detail elaboration which will certainly help me to deal with my both positions either way. Now certanly i can wait for a few days before taking any decision and thats a great relief for me.

One more point plz....how many points is the range for STRANGLE to appreciate OR brk of which will make the lONG straddle profitable....Thanks again....SLM

 

[ghosh_ak34]

Dear Friends,

For Nifty Future traders who would like to trade as per trend check strategy posted in 1st post of the thread, Nifty levels for tomorrow are as under:

Resistance at 5370
Support at 5300


If you go short 1 lot then, buy 1 lot at money or near money call and if you go long 1 lot then, buy 1 lot at money or near money put to hedge. Reco. to trade as per trend check strategy posted in 1st post of this thread.

Regards

 

[ghosh_ak34]

Mr Ghosh.

Thank u very much for your detail elaboration which will certainly help me to deal with my both positions either way. Now certanly i can wait for a few days before taking any decision and thats a great relief for me.

One more point plz....how many points is the range for STRANGLE to appreciate OR brk of which will make the lONG straddle profitable....Thanks again....SLM

Dear SLM,

You can use option calculator to calculate the profitable range. You can also use OptionOracle to calculate this.
Regards

 

[sibumajumdar]

Dear Friends,

For Nifty Future traders who would like to trade as per trend check strategy posted in 1st post of the thread, Nifty levels for tomorrow are as under:

Resistance at 5370
Support at 5300


If you go short 1 lot then, buy 1 lot at money or near money call and if you go long 1 lot then, buy 1 lot at money or near money put to hedge. Reco. to trade as per trend check strategy posted in 1st post of this thread.

Regards

Mr Ghosh,

For COVER you suggested to go for " ATM or near money". Which one is advisable to take for cover OTM or ITM if i go for "near money Call/Put". Thanks....SLM