@Harry..@RDP..@Chandra..First do it on pen and paper today, for that down load files from nse site of last two months.first download 10th or 11th or 12th date of sep bhav copy.then find out nifty spot position on that day. then write on paper the price more than 200-300-400 point( in ce-call segment,next month series) above nifty spot price.then write down 200-300-400 point down side ( in pe-put segment,next month series)from nifty spot price at that time..write only the price which was in between 10-20 Rs.Then down load the file(bhav copy) dated 3days before and 4days before expary of that month.there u find out what was the price of that ce(call) and pe(put).Then u will come to know what was the result of that month.Do it today and reply me tomorrow..I said "buy",, not short any ce or pe..Download 12th and 13th aug bhav copyand download 13th and 14th sep( that time nifty spot was arround approx 5700) bhav copy, then write down the price of pe and ce,, then after down load bhav copy of 3days and 4days before expiry date file..see the result and plse inform me tomorrow.For this month, when the price will adjust, then i will let u know.. That time i will buy..Regards.Siddharth Dharmail.email@example.com
@Siddarth Dhar!Good evening! Should we do this option strategy between 10th - 13th of every month only?
@Prabhakar..Good evening..This strategy works only in between 10th to 15th for buy.Before 10th, the price is always high, after adjustment, price becomes low in between 10th and 15th(u have to watch it daily at that time).And after 15th, the price starts increasing.Sell always before 3-4 days from expiry..For this month i will let u know..Regards.Siddharth
Thank you Sir for your prompt reply
Siddharth Dhar,Very good explanation."For this month, when the price will adjust" what is meant by this? Is it the date (10 - 12)that guides in initiation?
Dear Siddharth,Thanks for a different kind of strategy. "one will be more then 100 Rs and another one will be zero" means the one which will sink,will be Frog & the one which will fly will be Bird.In any case possibility of profit only.The main criteria,the rates.It must be almost equal.Good.
@Rajagopal Sir..After expiry of any series, when we entered in to a new series, that time call(ce) and put(pe) price's for the current month and for next month's are generally high( probably due to roll over of hedge fund in option), after 6th days to 10th days from last month series expiry it becomes normal( due to volatility ). Then we can buy the CE(call) and PE(put)next month series..And same thing are plays,roll over starts of hedge fund(by the big smart money players and FII) when expiry is near by 6-7 days of current month..All money earns by this strategy are the money, which is rotating in the market due to opposite side hedge of their(by the FII and the smart money players) main investment..So, from the 10th to 15th, or we can say 10th-12th-13th are the dates for lowest price entry.. Although we have to start close watch from 7th day onwards..Regards.Siddharth
Dear Siddharth,Do you test this strategy in sideways market?Any previous experience?
After many days later good short covering seen in NF.Almost 10.25 lac.Suggesting still more steam is left in this rally.Let us see.
I haven't traded in options with much success, but Siddharth's strategy makes sense in one thing - I've noticed option prices normalize around the 15th too. Just didn't understand why.:)It goes haywire after that and I always lose money. lol
@mynac..Dear sir.. i have not tested it in any side ways market..Although we can test it any previous month side ways market, by download the bhav copy of any side ways month..For that we have to first figure out any side ways month..U just figure out any previous month(side ways) sir.. and then tale me, i will also test it by download the files of that respective month..Regards.Siddharth
@siddharthaif what you say is correct, first week should be used to sell options and around tenth cover.....then buy options in the middle of the month at reasonable values.can it be understood and dealt with in such a simple manner please ?
Dear Siddharth,First of all no Sir,Please.& second I have old NF data so I shall definitely check & will let you know that Where Nifty has not moved either way too much in those months or Nifty has moved within tight range.Thanks.
@Yoda mam..just try it in pen and paper first..u will see the result. and thanks for ur view..Regards Siddharth.
Siddharth,Excellent strategy and effort. Thnx a lot for sharing.Hope it works this time REAL.I checked as per the dates for 5800 CE and 4700 PE , when spot was 5419 to start withand got 12500 profit per lot. Please confirm if I have got it right and suggestions.How long have you been using this, and most important, what about during side ways mkt?Looking forward to other's findings and your updation.
Siddharth,I have seen your reply for sideways mkt.No issue.
Had last few months data ... tested it for last 4/5 months ... In a strong trend ... definitely the trend side goes towards 100 (almost 9-10 times)!However, in a non-trending month it limits to 3-4 times!Good One Siddharth! It's theoretically called "Long Straddle" ... however, they never talk of next month series! I think this is what makes it practical application of theory!
@mynac..ok.. Thanks..will wait for ur observation reply..@rajv malik..Thanks for ur Vision on this strategy..I never gone for any option selling..But this strategy i told, it works..@atain..Thanks for ur paper test and sharing..In side ways market not tested yet,,u can test it by downloading the bhav file of any sideways market..Now i have to pass my laptop to my brother..Will connect tomorrow..Good night every body.Thanks N Regards.Siddharth
Hi,I have had experience with buying the OTM Calls/Puts at low price hoping for big payout.This strategy does not work all the time. But when it fires, it is a jackpot. For this to work there has to be a big break out/break down.To confirm, just look at the prices of Sep 5800/5900 calls before and after the break out.In the example given of buying 6400 call or 6000 Put when Nifty is trading at 6211.For the 100 rupee payout 2-3 days before the expiry, Nifty has to be at the least 6450+ or well below 5950.Which basically means nifty moves in a wide range of 200 points from the 10th to the 25th.This does not happen all the time and sideways markets will decay the premium (writer's dream).But this is a low risk (max loss of 2K per lot for the pair) high gain trade when the break out/down happens.
@Shr ...This works when we are dealing with next month series ... the issue of premium decay does not come into picture ...
I am a very poor technical person. Hence trading as much as simple. No time for complicated tough method. My simple strategy is as follows – if time permits read it out - 1) Will not hold nd sit tight with my option. trade every day. say, you have bought a put option at 100, if it comes to 90, will not wait for it to go above 100 to book profit, I will sell my option on markets intraday fall and then you buy back the option on market rise and pocket the difference of at least 10 to 15. as much as possible I will not carry.2) whether market goes up or down or flat, option value will reduce by at least 5 points every day, due to time decay it will reduce. 3) writing options have a much better chance of gain than buying options.4) Option value goes down by 25% also I will book LOSS. Instead of ZERO position this is better if I hold then success rate will be less.5) Timing is impt. I will observe the price behaviour, if it’s flexible within 8-10 points I will trade whether call/put or else will not trade.(brokerage around 40-45rs per lot) I will book profit regarding my CAM,FIBO and gann level.6) We must have our “OWN MENTAL QUIT LEVELS” say about 5-10 points to avoid bigger loss.7) Always my entry point is “high” of nifty spot and will book profit wherever I am comfortable will not wait for target.8) Example – Today I scalped @ 6100/6000/5900 puts + 1 MN from high level to spot 6178. After that I didn’t trade anything if at I know also. 9) Options value will “lose their value” at week end and @ closing time. Observe this.Nobody will give “free lunch” for me. You are all well “experts ta” persons what I am writing here will be look like “funny”, but it’s true I am surviving in this only. Any small trader like “me” can paper trade first then try for a “real trade”Thanks for the space sir.Warm regards
Dear Siddharth,Just I checked it for Resent Aug.2010 series.When Nifty was trading around 5400,My observation is that if the initial investment is small then it is better.The main plus point is,we are purchasing the option for next series & even if we are not getting returns at the end of current expiry & if we are prepare to take some loss if any,then we can left it on the table.Let the market decide.
@ EssDeeWaves & ALL.THIS TYPE OF STRATEGY WILL NOT WORK NOW BCOZ OF INCREASED VOLATILITY.FIRST READ SOME BOOKS ON EUROPEAN OPTION PRICING METHOD (WHICH NSE FOLLOWS), HOW VOLATILITY EFFECTS OPTION PRICING.THEN TEST YOUR METHOD DURING DAYS AFTER BREAKOUT LIKE MAY 2009 (LIKE OCT 2010), NOT DURING PROLONGED CONSOLIDATION DAYS & JUST B4 BREAKOUT (PASSED).Best Wishes.
Value areas : 6223-6211-6206 in Nifty & 12737-12720-12691 in BN.
today although nifty closed nearly 40 points up but calls above 6400 strike has closed in negative,(good amount of premium lost)strangely.also huge unwinding of 8,76,400 shares was seen in 5700pe while highest addition was seen in 6200pe at 4,46,000 shares.does it indicate of some drastic(fast and furious)fall may be seen soon if nifty trades and sustains below 6200??option traders please comment
it is good to see options being discussed here in detail. today's market fluctuation was eating option premium and 6200 ce which at one point of time was 145 rs ended around 120 rs after it touched 112 rs.to trade and make money in such a volatile market one will have to quickly shift from calls to puts and vice versa. which is not that easy to do. brokerage is also substantial.
or is it indicating that previously written 5700 pe at higher values are getting covered at lower values and they are writing higher pe of 6000-6200now to eat more premium by taking markets up???
i want to trade nifty future positional which one is best indicator for trade positional pls tell me any hnble ay one .my yahoo msn id shailendra_nathmishra
Try the jnsar for a future positional, shailendra.Re: option trading, Siddharth, I have had the same philosophy as Sujatha - I'm in and out quickly or I lose money. I've never tried anything more sophisticated than that.Perhaps I would if I understood your strategy correctly. Could you explain it with one example for today or tomorrow so that we can watch for results?