When to exit position in options

[AW10]

I feel ... now dec options are abt to expire, the time value is almost nil.
Though you will have profit if NIFTY settles at anything less than 5100-30 = 5070.

I feel a few ways to reduce losses is to write afew a little OTM options. However not much can be saved, but still.. we can make some quick money by writing a few OTMs.

Rest.. i would re quest other to advise also...

AW10, whats you call??

writing OTM options ? you mean 5000 strike etc.. This is quoting at 6.65. 5100 PUT is trading at 18. So u need to write 3 options to get back 18 rs.
Near expiry, you don't get much premium on OTM options.. Take into consideration the brokerage and u are left out with peanuts. i.e effecively, u will be writing more then 3 options to just save your 18 rs. Think about the margin that will be blocked for next 3 days. Better and simpler apporach will be to sell 5100 Put at loss and use the margin money to find new oppotunity.

And if some event takes place and nifty crashes, then 6.65 rs will turn out to be very costly. 1 Long 5100 PUT will not save your 3 or more short PUTs.

Happy Trading

 

[praveen taneja]

Bro if someone want to shoprt 5100 call and put what is the right time????

 

[sriugdh]

sriugdh, hope u know option pricing and how it changes near expiry. And also know how to read nifty's trend. In my view, these are basic requirements before getting into option trading. Regarding nifty going below 5100 .. frankly speaking I don't know..and as a trader I don't care. Cause I have defined my exits for open trades before opening them.

Your breakeven point is 5070.. even if nifty goes down to say 5100, ur option may not become valuable cause near expiry, there is not sufficient time left to travel below 5070. And if nifty moves further up, then ur PUT will loose value faster cause there will be less chance of it making money in remaining days.

If I were you, then I would either be preared to loose full money and take no action or would put a stoploss order and cut my losses. Just take this trade as another trade and move on to next trade with better plan. One loosing trade doesn't make us Looser.

Happy Trading

I understand my mistake. I should have learned and recommended him.

Can you suggest me to take some strategy for now?

I have 5k to invest. Can yu suggest me suitable avenue?

Thanks,
Sri

 

[AW10]

Bro if someone want to shoprt 5100 call and put what is the right time????

praveen bhai, 5100 call can be bought on retracement. Maybe near expiry, we might see intraday dip or rangebound move. I am more inclined towards bullish position cause Jan will see another set of +ive consumer oriented economic numbers due to Christmas spending.
Jan 5100-5200 spread is going in 60 Rs..Giving us return of upto 100 for 60 investment in 1 months time, if Jan market closes above 5200. The position has breakeven of 5160 i.e. it is in profit at the moment. Certainly, it will loose value if mkt goes below 5160 hence use stoploss price level to cut the loss.

This is equivalent to buying 5100 Jan call at 190 and waiting for market to close above
5400 to see similar return of 300 on investment of 190. Question is - which is more likely, mkt going above 5200 or mkt going above 5400.

Happy Trading