I have posted many large cap stocks view here..
Retracement strategy, a must for traders.
Trading strategy that works wonders besides the supports & Resistance is " Retracement strategy ": The strategy that has wor...
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I 'll always be there for you. To make you feel that you're secured. And even if the rain is pouring hard and the sky is almost dark... -
5010-5039 supply zone proved a ST resistance. 5002 proved a break down point. 4945 to 4982 proved a corrective rise, monitored with an ... -
Trading strategy that works wonders besides the supports & Resistance is " Retracement strategy ": The strategy that has wor...
9 comments:
Hi Ilango.
Good Morning. Chart on Large Caps is Helpful.
Question though on SBI, if my understanding is correct are we going to see reversal of SBI to 1900 levels again soon?
dear ilango
can we short 5000 call as well put also.
almost getting 275 [call+ put ] having stoploss at 4900 downside and 5100 upside.
iam new to options rarely trade in them.
ur suggestions will help
Hi..Mayur,
"SBI" looks to have topped out. It may stay flat or bounce a bit and fall..How low, its difficult to say now. That view holds as long as the recent high is not breached. Any thing is possible. This is a trader's paradise.
Hi Dr.Saurabh,
As the upsides are limited, writing a CALL makes sense as "time decay" favours writing. Even it moves up by 150 points, it should get "OB" and reverse down and there is time in this series. If it breaks 4920-4890, then you get all the premium.
If you write 4900 CALL, as a hedge you may buy 5200 Call. I am also not an expert on the options area. My critic has written 4900 CALL @ 260.
sir...i had a doubt about retail involved in call writing..On a average how much margin should one keep to write a call..and if there is a exercise...how does nse assign the trade...will it be random ..bcz the moves can potentially put the exercise in danger..
Hi..Shaq,
Call writing is simply "Selling a Call". You require the same amount as the future as Margin money. And the moment you sell it, your account will get credited with the Premium amount which you can use for other trades or simply transfer out.
Just as in "buying a call", you sell it to close the trade, in case of selling a call, you just buy it back at an appropriate time and your margin money gets released back into your account. If you allow it to be excercised, it will be done on the last day @ the last quote that is published. So there is absolutely no danger in dealing with it except "the danger" of a wrong trade or direction which is self inflicted.
sir...can we buy back the sold call any time before the expiry...say we write a 5k call at 80 Rs today and get premium of 4k...then how long shld we hold it..can one simply close it after few hrs or on next day ...how does this work bcz then one can keep selling calls and collecting small premiums ...
Shaq, like Ilango has said above, trading an option is the same as trading in futures. You can cover your position at any time before the expiry. You can close it after a few hrs, days or hold it till expiry.
Hi..Shaq,
Like I said earlier, it is just like buying a call at anytime and selling it.
You sell(Write) a 4900 call at the open @ 250 and it comes down to 220 after an hour, then you buy it back at 220 and pocket the difference. You need to have "Future equivalent margin" money to sell(Write) calls or puts.
Margin requirement is the only difference.
thanks for the comments ..i will try it out sometime and see how it goes..
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