Option Buy Recomendations

[rai07]

thanks for posting reply

ya sir that will also be good. sir can u suggest a pair strategy in which i can a net credit i.e selling one call and buying another call

thanks

 

[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 5462
Support at 5390

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]

thanks for posting reply

ya sir that will also be good. sir can u suggest a pair strategy in which i can a net credit i.e selling one call and buying another call

thanks

Dear rai07,

One can write Tata Motors 1020 straddle of the current series.

Exit before Tata Motors touches 1080 on upside or 960 on downside.

You can also buy Tata Motors 980 call and write 1040 call (2 atleast). Exit when 1030 is breached on upside and when 1000 is breached downside. Or you can also have a suitable SL as per your risk appetite.

Regards

 

[DS3]

Dear Mr Ghosh,


Nice to see a fellow bong giving trading tips and that too on derivatives. Now since am statistically challenged in simple english would it mean that you are saying that Tata Motors may come down to either 960 or it may go upto 1080? If yes shd i short or go long?


Warm Regards,

Dhritiman Sanyal

 

[andiemusik]

RESPECTED MR GHOSH,

I AM FAIRLY NEW TO THE WORLD OF OPTION TRADING, HAVE BEEN FOLLOWING UR THREAD FOR SOMETIMES NOW. I IMMEDIATELY NEED UR EXPERIENCED OPINION REGARDING AN OPTION STRATEGY WHICH IS PROBABLY A VARIATION OF IRON BUTTERFLY SPREAD [WHICH IS ALSO A COMBINATION OF SHORT STRADDLE & BEAR CALL & BULL PUT SPREADS] .

A REAL TRADE I HAVE TAKEN SHOWN HERE: -

ON THE 29TH OF JULY 2010, IVE

SOLD NIFTY 5300CE 2LOTS AUG@167 + SOLD NIFTY 5300PE 2LOTS AUG@70

RECVD PREM = 237*2

FOR PROTECTION, I

BUY NIFTY 6000CE 2LOTS [email protected] + BUY NIFTY 4400PE 2LOTS [email protected]

PAID PREM = 4.30*2



IVE ALREADY CLOSED THE POSITIONS EARLY FOR A PROFIT OF 50 RS, SINCE I HAD TO GO OUT OF STATION. THE CONFUSION, HOWEVER REMAINS

1. WAS MY SHORT NIFTY CALL PROTECTED TILL 6000 [EVEN IF THE PROFIT WOULD BE VERY LESS]?

2. WAS MY SHORT NIFTY PUT PROTECTED TILL 4400 [EVEN IF THE PROFIT WOULD BE VERY LESS]?

MY UNDERSTANDING OF THE THEORIES OF OPTION STRATEGIES SAYS SO, PLS CORRECT MENTIONING DETAILS IF I AM WRONG. DESPERATELY NEED UR HELP. PLS RESPONSE AT UR POSSIBLE EARLIEST. KEEP IN MIND MY UNDERSTANDING OF THE OPTION MARKET IS AT THE STAGE OF INFANCY.

THANKING U

andiemusik

 

[rai07]

Dear

I am nt understanding ur strategy why have u bought so OTM call and put. selling call and put in a rangebound market.How OTM call and put purchasing can protect u pls tell me i want to understand

Thanks
Nirmit

 

[ghosh_ak34]

RESPECTED MR GHOSH,

I AM FAIRLY NEW TO THE WORLD OF OPTION TRADING, HAVE BEEN FOLLOWING UR THREAD FOR SOMETIMES NOW. I IMMEDIATELY NEED UR EXPERIENCED OPINION REGARDING AN OPTION STRATEGY WHICH IS PROBABLY A VARIATION OF “IRON BUTTERFLY SPREAD [WHICH IS ALSO A COMBINATION OF “SHORT STRADDLE” & “BEAR CALL” & “BULL PUT” SPREADS] ”.

A REAL TRADE I HAVE TAKEN SHOWN HERE: -

ON THE 29TH OF JULY 2010, I’VE

SOLD NIFTY 5300CE 2LOTS AUG@167 + SOLD NIFTY 5300PE 2LOTS AUG@70

RECVD PREM = 237*2

FOR PROTECTION, I

BUY NIFTY 6000CE 2LOTS [email protected] + BUY NIFTY 4400PE 2LOTS [email protected]

PAID PREM = 4.30*2



I’VE ALREADY CLOSED THE POSITIONS EARLY FOR A PROFIT OF 50 RS, SINCE I HAD TO GO OUT OF STATION. THE CONFUSION, HOWEVER REMAINS –

1. WAS MY SHORT NIFTY CALL PROTECTED TILL 6000 [EVEN IF THE PROFIT WOULD BE VERY LESS]?

2. WAS MY SHORT NIFTY PUT PROTECTED TILL 4400 [EVEN IF THE PROFIT WOULD BE VERY LESS]?

MY UNDERSTANDING OF THE THEORIES OF OPTION STRATEGIES SAYS SO, PLS CORRECT MENTIONING DETAILS IF I AM WRONG. DESPERATELY NEED UR HELP. PLS RESPONSE AT UR POSSIBLE EARLIEST. KEEP IN MIND MY UNDERSTANDING OF THE OPTION MARKET IS AT THE STAGE OF INFANCY.

THANKING U

andiemusik

Dear Andiemusik,

Its range bound market and using this strategy makes no sense. See in real life scenario I as a option trader do not follow any bookish strategy just like this. I build slowly my trade, depending on market situation and later on it seems as if its butterfly or else.

May be I am not so mature enough to predict the market correctly and apply the exact required strategy. What I follow, I am telling below:

I take following types of trade initially depending on my understanding of market at that point of time and later either adjust it or add / modify the same:

Buy or write Straddle or Strangle. Go for bull spread or bear spread or covered write.

And later on when market shows any movement against my views then, I do some adjustments to my trades to make it work. But yes, if SL is hit I do exit.

So, after a while when I see my positions it seems to match with some bookish strategy. And I find its okay, market is so unpredictable that its difficult to take a perfect trade as per books at first go. Atleast this is true with Indian market. And all these books have been writen mostly by authors from western countries who have traded in mature markets like US or UK or else. Yes, if you could find any author who has got trading experience in Indian market then, that will help you more.

Regards

 

[DanPickUp]

Dear Andiemusik,

Its range bound market and using this strategy makes no sense. See in real life scenario I as a option trader do not follow any bookish strategy just like this. I build slowly my trade, depending on market situation and later on it seems as if its butterfly or else.

May be I am not so mature enough to predict the market correctly and apply the exact required strategy. What I follow, I am telling below:

I take following types of trade initially depending on my understanding of market at that point of time and later either adjust it or add / modify the same:

Buy or write Straddle or Strangle. Go for bull spread or bear spread or covered write.

And later on when market shows any movement against my views then, I do some adjustments to my trades to make it work. But yes, if SL is hit I do exit.

So, after a while when I see my positions it seems to match with some bookish strategy. And I find its okay, market is so unpredictable that its difficult to take a perfect trade as per books at first go. Atleast this is true with Indian market. And all these books have been writen mostly by authors from western countries who have traded in mature markets like US or UK or else. Yes, if you could find any author who has got trading experience in Indian market then, that will help you more.

Regards

Hi ghosh_ak34

Just my two very personal cents to your post :

Very wisely spoken and clearly explained. It shows the quality of you as an option trader.

Building up a strategy is the way I also prefer to do it. As nobody never surely knows where market will head to, it is wisely to keep possibility's in our option trader luggage.

Step by step implementing option trades in the markets needs surely knowledge about the basic existing and official option strategies. By knowing them and trading them, we improved our understandings for this strategies.

You mentioned the different between India and other countries about the possibility to implement option strategies in the market.

I mean, you are right about this. But you also already gave the answer to that. By implementing any of the strategy's we know step by step, we less belong to what ever market we trade.

We also do not let know the broker or market maker what we are planing and this can have a positive effect on the outcome of the final result.

Many newcomers and even more experienced option traders are not clear about the role of the market makers or brokers. In many cases they are our counterparts and they want to make money as we want to make money.

If we present them our strategy in advance, they know what we want to do and as they want to make money as well ( and they make a hell of money ), they will do there best to stop us being successful in our option trades.

Finally : It is not important if any book was written in the states or where ever. As long as a traders read this books and then implements ideas in there home markets in a clever way ( market conditions included ), WE will make money and that's all we want by trading what ever market.

I wish you a nice weekend and as I say : Just my two cents and nothing more or less.

DanPickUp

 

[ghosh_ak34]

Hi ghosh_ak34

Very wisely spoken and clearly explained. It shows the quality of you as an option trader.

Building up a strategy is the way I also prefer to do it. As nobody never surely knows where market will head to, it is wisely to keep possibility's in our option trader luggage.

Step by step implementing option trades in the markets needs surely knowledge about the basic existing and official option strategies. By knowing them and trading them, we improved our understandings for this strategies.

You mentioned the different between India and other countries about the possibility to implement option strategies in the market.

I mean, you are right about this. But you also already gave the answer to that. By implementing any of the strategy's we know step by step, we less belong to what ever market we belong to.

We also do not let know the broker or market maker what we are planing and this can have a positive effect on the outcome of the final result.

Many newcomers and even more experienced option traders are not clear about the role of the market makers or brokers. In many cases they are our counterparts and they want to make money as we want to make money.

If we present them our strategy in advance, they know what we want to do and as they want to make money as well ( and they make a hell of money ), they will do there best to stop us being successful in our option trades.

Finally it is not important if any book was written in the states or where ever.
As long as a traders read this books and then implements ideas in there home markets in a clever way ( market conditions included ), WE will make money and that's all we want by trading what ever market.

Have a nice weekend

DanPickUp

Dear DanPick,

Very well said. You have spoken my mind. I was about to write in similar lines. Exactly, it is a Tug of war between different option traders.

Nice weekend to you to0.

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 5500
Support at 5415

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