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I generally hedge the call option with put option. Ex: Nifty CMP is 4484. So buy 4200 Put (27) and 4700 Call(47).
But in this strategy since call is high priced than put and if market goes down then call looses its value with Time (Time Value of option).
So what should be the ideal strategy to hedge and get atleast profit?
I know options are not made for trading but still I want to know How to play in options?
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dont create any strategy on nifty, instead look at the news, find out which sectors might get benefit and take a call for those, and take put for nifty.
Ok, Gentlemen. So lets prepare strategy for budget. I think budget is on 6th. So either we will have to initiate strategy in this month call-put or next month call-put. We will create and initiate strategy in this month. Please help me to create this strategy.
Hi Buyin Straddle or strangle only works when you think a big move on any side. But if the market fails to move then you will actually loose money. You have to use dif strategy in diff market situation. Think what will you get if market stays at 4500 after your purchase of two options(CALL & PUT).So Check the market and then decide strategy. No single strategy will work all the 12 months Regards, Prasad
i m agree with vikas jee n jitesh both . arround 7-10th day of month we can buy both bt it shud be of in d money . n wt jitesh said is very rite too coz 5-6 times in a year we found a time to buy both ( recently we saw dramatic after election result )...we can try it before budget too ( posiblity of 50% gain n 20% loss )
In my view, this kind of strategy should b applied only if either side break out is expected within 3-4 days. What Rajesh sir says?
Vikas, I agree with you. Now 4500 call is at 118 and 4400 put at 76. Lets consider two cases: 1) market goes up from here, then call will go up and put will slowly go down ex: if call is at 130 , put will be at 68. So, i am getting 4 rs profit overall.
2) But if market goes down then call will be at 100 and put at say, 88.
My question is, even though i have bought at the money call- puts, but the price is call is much higher than call.
Is it a good strategy to buy such call-put? or both call and put should be around same value?
Right. For options, month is divided in two parts. 1) start of month till 15th. 2) last 15 days of expiry. In the first 5-6 days prices are very high and in last 15 days volatality is high. So what strategies to follow for first 15 days and last 15 days. I think we should initiate such strategies time to time during the month with the help of tech analyst available in this forum.
parag u take loss bcoz of ur wrong trading stratagy.when u want to create buy spread in options,then u should wait till 10th of every month and then make buy spread only in at the money calls and puts.out the money buy spread means 90% chance to loss.if nifty is 4450 u should buy 4500ce and 4400 pe.just try this.
No option strategy works good near expiry except writing the call and puts.. Select the call and puts which will not become 'in-money' till expiry, like 5000 call, or 3500 put, and then write them. I have not looked in details of which ones are what prem, but far away strike price has very less prem like 2, so writing far away call-puts is not so good. Writing 4800 call might prove to be good.
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