Option Buy Recomendations

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ghosh_ak34

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Ghosh Sir,

Last week I booked profit for OP trds. But for CA-May-3500 @ 270/-(Thursday) I could not sq off & hence hedged Friday at the last moment with Sell of Jun MINIFTY Fu @ 3685.50. In view of Monday UP/Dn GAP Opening I am puzzle though I am in profit now. Please advise me what to do for minimise Loss/maximise Profit. What should be my Game on monday Opening and later? All Friends of this Forum r welcomed with their suggestions. Thanks in adv 2 ALL. Regards,

SM

SM
Dear SM,

Well you are having Mini NF with 3500 may call as hedge. It seems Monday it will be gap up and seems a good break out towards 4000 levels. Will reco. to wait till 10:30 AM atleast and then, square off Mini NF and hold 3500 may call with a trailing SL=10% or 20% depending on your risk appetite. You can bet on 3800/3900 call. As trend is expected to up on Monday.

Regards
 
Dear SM,

Well you are having Mini NF with 3500 may call as hedge. It seems Monday it will be gap up and seems a good break out towards 4000 levels. Will reco. to wait till 10:30 AM atleast and then, square off Mini NF and hold 3500 may call with a trailing SL=10% or 20% depending on your risk appetite. You can bet on 3800/3900 call. As trend is expected to up on Monday.

Regards
Thanks. SM
 
Dear SM,

Below are answers to your queries:

a) OHLC= Is it of Nifty or NF? I find differences from PIB data.

Ans: OHLC that I post is for Nifty Futures only. Source of data nseindia . com

b) If hedge NF with CA/PA at the same point, any direction Gain/Loss both occurs with minor Profit/Loss. I wish to add Sir, that if I enter asper trend and trd goes in my direction then why not to hedge at the point when direction changes.This will be hedged with no possibility of any LOSS. Pardon me if I am wrong.

Ans: This is common doubt that many traders have. See one can never be sure of market direction and its sudden reversal. This reversal speed could be small and slow or could be very big or fast and sometimes we traders get carried away. We keep thinking that we are smart and we will act smartly. But truely speaking this is not always possible and one days huge loss eats our months profits. Hence suggested a safer way to hedge when you take position in NF.

c) Suppose N is 3650, Pl tell me hedged ATM Buy CA 3600 OR 3700 & for PA 3600 OR 3700 (If not 3650).

Ans: Hedge with nearest 100th strike price. If NF is 3650 and trend is up then, you go long in NF and either buy 3600 or 3700 put. I prefer buying 3700 put. If NF is greater than 3650 say 3655 then, will hedge with strike price 3700.

d) SL=2000. Is it for only NF when Dn & for CA when Up OR Total?

Ans: This is for total i.e. NF + (CA or PA).

And Always remember to square off your position on daily basis specially before any event.

Regards
Ghosh Sir,

Thanks for clearing all my doubts point by point. Still I wish to add that how affective will it be (for b) if apply SL immediately below 2% and later on when trend changes cancell SL & hedge with CA/PA. Please comment.

Regards, SM
 
Dear All,

Friday's OHLC was:

Code:
Open	High	Low	Close
3635.50	3699.00	3625.10	3684.35

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:

Resistence at 3735
Support at 3623

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 strategy posted in 1st post of this thread.

On Monday market will see a good rally. And this is likely to continue for a week atleast.

Regards
Ghosh Sir,

Is R1 & S1 for next week 3735 and 3623 respectively?

Rgds.......SM
 

ghosh_ak34

Well-Known Member
Ghosh Sir,

Thanks for clearing all my doubts point by point. Still I wish to add that how affective will it be (for b) if apply SL immediately below 2% and later on when trend changes cancell SL & hedge with CA/PA. Please comment.

Regards, SM
Dear SM,

See it all depends on your risk appetite. You can keep SL=2% or 75pts or 100pts or else. But you need to be very strict and be disciplined, if you think you can manage this then, go for it. If you take SL=2% then your target should be 3% or more. Always remember this. Normally, traders keep deep SL but book profits quickly and end up in losses

Well, I will personally never reco. for SL=2% etc. I have tested this system and have found that this gives nearly constant monthly returns if followed as is.

Regards
 
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Hi, I had shorted nifty may 3600 options @ 75 sometime back. Now it is already at 210. Please advise how to minimise losses.
Hallo,

Monday morning may op with gap up. Hence, ur Loss may increase But wait till 10.30, chechk the trend and if still up then think of sq off to reduce further loss. U should have applied SL=90-100 (@25%) immediately after entry. Advised to keep this in mind. OK

SM
 
Hello Ghoshji

I had bought a June 25 - Call - in options at RS 109 at around Nifty strike price of : 3670
on thrusday............ now when nifty is hovering around 4300 levels my Call value has just risen to 136 Rs ... why this kind of minimal increase when May CAll values are going around Rs 450 levels ..
 
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