Option Buy Recomendations

[trillian]

Hi Ghosh,

I completely understood the concept.Still have a query?

Assume Nifty Spot Price today @10 AM is: 4200.Also lets assume Nifty Oscillates between 4100 to 4300 for the next 15 days.

Suppose i bought a put option pe 4400 @ 390 (as per trend) @10.30 AM and ce3900 @350 at 3.00 PM (for hedging) .

My Question is what if the target is not achieved for the next 15 days?Since Options decays with time,there will be an priority to hit the stop loss (assuming the market swing one day after another) first compared to achieving the target.

Pls Note:

I think this may not occur around 75%.But,if so,there may be possibility that we may lost the money even after hedging, right?.This is just a query to you and hope i am not disturbing the group.

Please clarify.

Reg
Vasanth

Hi vasanth,

I think still you are not into the strategy. you should square off all position within a week. we want to enter next week with new R1 and S1 which we got this week.

So I think 15 days wont come into picture.

Ok let me take your scenario and explain. In 15 days either 30% SL or profit sure will hit. If not, square off ur position with small loss or small profit.

I think now you got an idea.

Regards.

 

[ghosh_ak34]

Hi Ghosh,

I completely understood the concept.Still have a query?

Assume Nifty Spot Price today @10 AM is: 4200.Also lets assume Nifty Oscillates between 4100 to 4300 for the next 15 days.

Suppose i bought a put option pe 4400 @ 390 (as per trend) @10.30 AM and ce3900 @350 at 3.00 PM (for hedging) .

My Question is what if the target is not achieved for the next 15 days?Since Options decays with time,there will be an priority to hit the stop loss (assuming the market swing one day after another) first compared to achieving the target.

Pls Note:

I think this may not occur around 75%.But,if so,there may be possibility that we may lost the money even after hedging, right?.This is just a query to you and hope i am not disturbing the group.

Please clarify.

Reg
Vasanth

Dear Vasanth,

Firstly the hedging should be 50% in terms of price. We keep calculating new R1 and S1 for every week, we can have positions next week which could be profitable. We do not carry forward this week's position, square off this weeks position by Friday. And will trade as per the strategy posted in 1st post of this thread with new R1 and S1. If R1~S1 is outside [300, 400) range then, we will trade as per sideways stretegy.

Regards

 

[trillian]

R1 and S1 for This week (29/9/08 - 3/10/08)

Nifty weekly levels

High ---> 4303

Low ---> 3970

close ---> 3985



S1 = 3900

R1 = 4200


R1 - S1 = 333

So we are not going to trade sideways strategy.

Ghosh please confirm the above levels.


Regards.

 

[ghosh_ak34]

R1 and S1 for This week (29/9/08 - 3/10/08)

Nifty weekly levels

High ---> 4303

Low ---> 3970

close ---> 3985



S1 = 3900

R1 = 4200


R1 - S1 = 333

So we are not going to trade sideways strategy.

Ghosh please confirm the above levels.


Regards.

Dear Trillian,

Yes, you are correct! Next weeks R1=4200 and S1=3900. R1~S1 = 333, which is within [300,400) so, we will not follow sideways strategy.
Regards

 

[vasanth_ece]

Dear Trillian,

Yes, you are correct! Next weeks R1=4200 and S1=3900. R1~S1 = 333, which is outside [300,400) so, we need to follow the sideways strategy for trade in Nifty options next week as per sideways strategy stated in 1st post of this thread.

Regards

Hi Ghosh,

Why we need to follow sideways strategy,as R1-S1 >=300 and <400?I hope we need to follow normal strategy .

One more question,As of Normal strategy we need to buy calls @S1 and put at R1.

Is this irrespective of time,as per First post?Or do we have a specific time to buy calls/puts.

Please clarify.

Regards
Vasanth

 

[VJAY]

Sir,
Confusing!!! next week sideway strategy?

VJAY

 

[VJAY]

Ghosh Sir,

My today trdae :carry forword of call and put from yesterday.call stoploss triggered.Put target achieved .have a gain.
One doubt is there.Whats the difference in sideway strategy and normal strategy?
I unable to find the difference.Please clarify the difference ?
Another one is when we carry next day with hedging then we need to close one position which in loss in morning? or wait?

Regards
VJAY

 

[ka2931]

I think,we need to follow normal strategy because R1-S1=333

Ghoshda's strategy states---"Sideways strategy is as under, applicable when R1~S1 <300 or >400" Am I wrong-Ghosh Sir?
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Hi Ghosh,

Why we need to follow sideways strategy,as R1-S1 >=300 and <400?I hope we need to follow normal strategy .

One more question,As of Normal strategy we need to buy calls @S1 and put at R1.

Is this irrespective of time,as per First post?Or do we have a specific time to buy calls/puts.

Please clarify.

Regards
Vasanth

 

[vasanth_ece]

Hi Ghosh,

Is there any specific time to buy calls@S1/putsSR1 for Normal Strategy,which is going to happen for next week.

Please advice

Reg
Vasanth

 

[trillian]

Dear Trillian,

Yes, you are correct! Next weeks R1=4200 and S1=3900. R1~S1 = 333, which is outside [300,400) so, we need to follow the sideways strategy for trade in Nifty options next week as per sideways strategy stated in 1st post of this thread.

Regards

Hi ghosh,

If (R1 - S1) >= 300 and <400 then,
Buy call at S1 and put at R1.
else
Do not trade at all or trade as per sideways strategy stated below.

This was the statement given by you in first post whereas R1 - S1 = 333 is greater than 300 and less than 400.

So as per your statement we should buy call at S1 and R1 and we should not follow sideways strategy.

So please confirm from ur side.

Regards.