Trading Nifty with Camarilla Pivots...!

[mohhnow]

Linkon,
would you explain the offsetting with an example [in the aft market time] plz ?
My knowledge is nil on option strategies.
I may not be able to sell options, but will try to work it out,
Will come handy next time.

 

[veekay304]

bot HUL 270 ca for 4.5

divergence...in hrly tf!

Lo... chudail gaayab.. Lagta hai ki doggie chudail ke saath bhag gaya... nifty se than aakar..

VK

 

[mohhnow]

sgx 5295.
europe turning up, but still below prev clos

 

[linkon7]

Linkon,
would you explain the offsetting with an example [in the aft market time] plz ?
My knowledge is nil on option strategies.
I may not be able to sell options, but will try to work it out,
Will come handy next time.

i bot 5 lots of 5000 put at averaged price of 50
i sold 10 lots of 4900 put at 34.5

total i squared off both at 35 for 5000 put
and 4900 put at 20.5

cost =>
50*5*50 = Rs. 12,500 is the premium i paid for 5000 put
34.5*10*50 = Rs. 17,250 is the premium i received for 4900 put

exit =>
35*5*50 = Rs. 8,750 /- is what i got back for 5000 put loss of Rs. 3,750 /-
20.5*10*50 = Rs. 10,250 /- is what i had to pay back for 4900 put. Profit of Rs. 7000 /-

net profit about 2000 subtracting slippage and brokerage.

Thing is, if i would not keep the delta neutral, then i would end up losing money in this transaction.

when you were carrying NF short yesterday for today, you could sell 5300 put for 148. it traded about 120-123 the whole day today. so to make delta neutral, you needed to short 2 lots of 5300 put for every lot of nf u are carrying. so a 40 points loss in NF will mean 25 * 2 = 50 points gain in options. conversely, if market were to fall, then NF will gain roughly at the same pace as 2 options combined, since ITM options tends to have less time value and IV are low, its roughly balanced.

Its a very interesting subject and once u start managing bigger sum of capital, you cant afford to be quick gun murugun. You need protection all the way.

Search for post of AW10. He is the options master. very clear head and his post are a literature by itself.

 

[mohhnow]

hi
i am reading it now.

 

[mohhnow]

hi linkon,
well appreciated each point, including the quick gun
yeah, i went thro some of aw10 option thread, but since i am fresh i thought of catching up that later after catching up on TA and strategies.

Can i ask you,
What would be implication of buying 5300 call
instead of selling 5300 put ?
Will the end result be different ?

 

[mohhnow]

and, linkon, thanks plenty for your patient explanation.
Right now I just put a rubberband around that short with todays long so that they rock & roll keeping the 42 point loss between them. 5280 & 5238.
What I have done is like grandmother medication firstaid.
What i would pickup from you, and aw10 will be like proper defence.

 

[veekay304]

i bot 5 lots of 5000 put at averaged price of 50
i sold 10 lots of 4900 put at 34.5

total i squared off both at 35 for 5000 put
and 4900 put at 20.5

cost =>
50*5*50 = Rs. 12,500 is the premium i paid for 5000 put
34.5*10*50 = Rs. 17,250 is the premium i received for 4900 put

exit =>
35*5*50 = Rs. 8,750 /- is what i got back for 5000 put loss of Rs. 3,750 /-
20.5*10*50 = Rs. 10,250 /- is what i had to pay back for 4900 put. Profit of Rs. 7000 /-

net profit about 2000 subtracting slippage and brokerage.

Thing is, if i would not keep the delta neutral, then i would end up losing money in this transaction.

when you were carrying NF short yesterday for today, you could sell 5300 put for 148. it traded about 120-123 the whole day today. so to make delta neutral, you needed to short 2 lots of 5300 put for every lot of nf u are carrying. so a 40 points loss in NF will mean 25 * 2 = 50 points gain in options. conversely, if market were to fall, then NF will gain roughly at the same pace as 2 options combined, since ITM options tends to have less time value and IV are low, its roughly balanced.

Its a very interesting subject and once u start managing bigger sum of capital, you cant afford to be quick gun murugun. You need protection all the way.

Search for post of AW10. He is the options master. very clear head and his post are a literature by itself.

lo...kidar se kidar gaya..

from camarilla==>CCI(woodies)==>options...
(beech beech me doggie aur chudail-wali BB Aur darawani (simple-si) chart bhi)...

:clapping::clapping:

Much to learn from you Linkon.. Hats off...:thumb::thumb:

VK

 

[veekay304]

a long way to go...

VK

 

[mohhnow]

hi vk, its much more than that ...
he is one of the few dynamic people here, experiments, trys, tests, actively involves in the developing strategies. You saw the graph with the verbal diagnosis of condition of the market. Innovation is out of him off & on ...
So, dont be surprized what comes out of his Reply box next ...