Option Buy Recomendations

[ghosh_ak34]

Dear Friends,

Here is my weekly view:

Nifty has not yet managed to stay above 5400 levels. . This is Qtrly result season so we might expect volatility to continue for a while. Thechnically, there still exits resistance at higher levels as Nifty is in overbought zone.

Will reco. to write Nifty 5600 call and 5100 put of current series. Those of you who have written Nifty 5400 straddle could continue to hold it.

Regards

 

[mycall]

Hi Ghosh,

I have Nifty 5300 put @64. Is it worth holding?

The R1 and S1 are the same for the next week, so no possible trade, if I read your 1st post correctly. Please correct me if I am wrong.

Also, tomorrow is 19th and 20th we have to square off all positions. Is it advisable to take up fresh position tomorrow, market being read as moving sideways. Please forgive me, I am still a learner.

Thanks for advice in advance.

Regards,

Pranjit

 

[ghosh_ak34]

Hi Ghosh,

I have Nifty 5300 put @64. Is it worth holding?

The R1 and S1 are the same for the next week, so no possible trade, if I read your 1st post correctly. Please correct me if I am wrong.

Also, tomorrow is 19th and 20th we have to square off all positions. Is it advisable to take up fresh position tomorrow, market being read as moving sideways. Please forgive me, I am still a learner.

Thanks for advice in advance.

Regards,

Pranjit

Dear Pranjit,

For Nifty options trading R1 and S1 for the current week are R1= 5400 and S1=5300. Yes, after 20th of the month we do not trade in current series.

It won't prudent to hold 5300 put as Nifty is not showing any sharp movement downwards and put will suffer premium loss due to time decay.

Regards

 

[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 5420
Support at 5355


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

 

[keturpatel]

Hi Ghosh,

First of all, let me say that your are doing great.:thumb:

I have Nifty 5300 put @ 50 of current month.
Should i hold it for couple of days more or book loss ?

I was hoping that due to global weakness, nifty will crash down, but it has not gone likewise.

Thanks.

 

[mycall]

Dear Pranjit,

For Nifty options trading R1 and S1 for the current week are R1= 5400 and S1=5300. Yes, after 20th of the month we do not trade in current series.

It won't prudent to hold 5300 put as Nifty is not showing any sharp movement downwards and put will suffer premium loss due to time decay.

Regards

Thanks for your clarification.

I Understand that R1 and S1 is drawn from weekly data and to be followed for the entier next week. Means we should be buying at either these R1 and S1. If so, then what are these 'resistance' and 'support' you update daily? Are these for that particular day? If so, then what is the significance of these daily 'resistance' and 'support'.

Again forgive me, I am a bit confused.

Also, this thread is titled 'option buy recommendation', but, excuse me, I am not seeing any real 'option buy recommendation' here recent posts.

Regards,
Pranjit

Regards,
Pranjit

 

[cool_kk]

Thanks for your clarification.

I Understand that R1 and S1 is drawn from weekly data and to be followed for the entier next week. Means we should be buying at either these R1 and S1. If so, then what are these 'resistance' and 'support' you update daily? Are these for that particular day? If so, then what is the significance of these daily 'resistance' and 'support'.

Again forgive me, I am a bit confused.

Also, this thread is titled 'option buy recommendation', but, excuse me, I am not seeing any real 'option buy recommendation' here recent posts.

Regards,
Pranjit

Regards,
Pranjit

Hey pranjit,

Why you said that
"Also, tomorrow is 19th and 20th we have to square off all positions"

I guess you can hold till expiry i.e. 29th July if you think nifty will go down But in that case you will loose all value.

If you have money to hold Sell 5200 put -->5 lots and collect premimum of 15.65.

In case Market goes down you will be in profit as you already have 5300 put buy.

In case if market doesn't go down, you have already covered your loss... as 5200 put will expire @ zero and 50*5*15=3750 RS collected... - brokerage.

Thanks
cool

 

[mycall]

Hi Cool,

I told that because Ghosh's strategy tells us to square on 20th. After that selling is viable, and then he is not recommending that.

Next, I am not familiar with selling. If I sell 5200 puts what it accounts for at or after expiery, whether maket is up or down? please explain.

Regards,
Pranjit

 

[cool_kk]

Hi Cool,

I told that because Ghosh's strategy tells us to square on 20th. After that selling is viable, and then he is not recommending that.

Next, I am not familiar with selling. If I sell 5200 puts what it accounts for at or after expiery, whether maket is up or down? please explain.

Regards,
Pranjit

Pranjit,

I am not willing to take ghosh thread so advice you to open query in other thread.

I am also quite a newbie and following JV blogger thread of streamliner Nickels..
Also AW10 thread of spreading.


How it works is when you sell you collect money/premium uphand means it will be credit ; you will receive money by selling.

For buying you pay premium like you paid 64 rs .

Only Selling example:

So if Market goes below 5200; suppose 5150
your loss will be 5200-5150=50

50*50=2500 rs

But you receive by selling got 15@50=750 RS

so your total loss is 2500-750=1750 + brokerage

If Market doesn't go below 5200 before expiry, you will keep 750 RS.
Also with time it will reduce to 14...10,9,8 and zero in case market doesn't go down.

Now taking your previous trade consideration you have put 5300 @ 64....
So you are already expecting market to go down when you purchased this.
your loss will be minimized if you sell if market close down below 5200 your 5300 put will be in profit.

Thats why I am suggesting you to sell 4-5 lots of 5200 so you will collect some premimum.
750*5=3500 approx after brokerage.
If Market goes close to 5250 keep close eye and put stop loss.

Hope it will explain.

This is called bear spread:
Detail link: http://www.optiontradingpedia.com/free_bear_put_spread.htm

I am also not sure if ghosh recommendation are options OR general daily NIFTY levels, I guess daily levels.

Thanks

 

[vmanocha]

I have a quick question about option trading, if someone could answer it please (I have posted it in another thread as well, hope I will get an answer somewhere).

If I buy a call or a put for a stock/index at a particular strike price and leave it in place till the expiry, what happens if - for example, I bought a CALL option for a stock/index for a particular strike price (S.P.) and the stock/index closed above that? My call option would automatically be sold by the exchange/broker and amount credited to my account?