Zapytanie odrzucone przez serwer. Thanks for your sincere work to help others. OI increased according to the charts posted, what does that indicate according to the current trend. Options most of retail traders lose money so avoid trading in options till you have concrete knowledge of it. Decepline and stress less trade bramesh sir. You can access the charts FREE of cost. All readers of this site must rely on their own discretion and consult their own investment adviser. Anyway i think that this upward movement of nifty is a drama.
THANKS FOR UR GREAT SUPPORT, I LOST MONEY IN OPTION BUT NOT IN EQUITY SO AS U SAID ABOUT RETAIL TRDRS. You can find Nifty Open Interest with Live Put to Call Ratio in graphical format which make it not difficult to interpret the moves market are going to make. When something is not working for you then why you keep trading and losing your hard earned money. HA chart in type of chart option, then it will be nice, thanks. We will understand how the force gets influenced by the markets and how the Option Greeks further influences the premium. If I call nifty 7900 nifty spot is 7800, premium i bought is 100 now premium is 120. Only buyers of an option can exercise an option, as they have the right. If my view is bullish on an index or stock, I should buy a call option for intraday? What is square off in options?
In this case surely we can make money, does not matter on expiry nifty closes on what value. You can square off the written option anytime before the expiry, but you will not get the full premium. Firstly, if the spot moves from 250 to 270, the premium of the 260 Call option will certainly be more than Rs. Of course there is an angle of volatility here which we have not discussed yet; we will discuss the same going forward. Below this we can notice the OHLC data, which quite obviously is very interesting. In the money or at the money or out of money? However for the option buyer to be profitable, the market has to move in a certain direction. Cause sitting in front of computer is not possible.
Thanks a lot for sharing learning material, it is really helpful for beginners like me to understand the concept and method of share market. While we do that, we would request you to please be thorough with all the concepts we have learnt so far. Likewise, if you are short, sq off means you are closing by means of buying back. The minimum value for this option should be 10. You are just squaring off the position. Selecting the right strike price to trade is a major task; we will learn this at a later stage. Yes, its all a play on premiums, while some prefer to close it before expiry others prefer to hold to expiry.
In practical trading world, is all trades on Options done on premiums? If I call nifty 7900 nifty spot is 7800, premium i bought is 100 now premium is 80. But after reading your article I have developed basic understanding about it. Even if we r there we may miss the trade id doing some thing else at the time we are suppose to trade or squareoff the tyrade. Thank you and ZERODHA for the great content Karthik. What would be if I exit position now. Sq Off means you are closing an open position. This may be use someone. You can trade it based on your view.
Square off before the expiry. Below the red box, I have highlighted the price information of the premium. Hope this clears your doubt. Check Options Oracle for Option analysis. How can I predict the change in premiums? Traders just trade premiums. Is it due to difference in premium received or in other words due to moneyness of the option?
Scraping NSE websites on daily basis to pull our OI data, Historical Volatility data, VI data for analysis. After three days I find that the premium for the same call has moved to Rs. Clearly the pay off diagrams looks like the mirror image of one another. Can the option writer square off his position and take the profit of 8 Rs? The mirror image of the payoff emphasizes the fact that the maximum loss of money of the put option buyer is the maximum profit of the put option seller. When you sell, someone in the market will buy it from you and you are completely out of the trade. Thanks for the immediate reply. Not working for me having tried all troubleshooting.
In option selling, if I choose to wait till expiry, I guess, I shall be saving brokerage and other charges of second leg. So if you have access to the same along with volumes and maybe open interest you are good to go. Clearly there are two favorable market conditions for the option seller versus one favorable condition for the option buyer. In some of your replies, you mentioned that the profit is calculated as per the difference of spot price and strike price and in some replies u mentioned that it is as per the difference of premium. Its just like buying a share at 10 and selling the same at 13. Now sure which data points you are talking about. My doubts is for charges is per lot or per order? But of course this in itself should not be a reason to sell options.
In your article you have mentioned that options in India are European in nature and not American. Once B2 will take position, B1 will no longer the participant of the game. This translates to a sweet Rs. However by no means I am suggesting that you need not hold until expiry, in fact I do hold options till expiry in certain cases. Think of this as a ship sailing in the sea. The ship battles these forces and finally arrives at an optimal sailing speed. So which of the above options are correct? When you hold the written option to expiry, its not referred to as exercising the option.
Thanks for that and hope that further chapters will also come the same way. In fact this is exactly what happens in the real world. Yes, you need to track the premiums to identify the profitability. In other words, do not buy a call option or do not sell a put option when you sense there is a chance for the markets to go down. Going forward in this module, we will understand each of these forces and its characteristics. This lead to my confusion. Now if the price moves to 270 and premium is now at 3 so would be my profit?
This is because if you have written an option for Rs. Some forces tend to increase the speed of the ship, while some tend to decrease the speed of the ship. For this reason, we will quickly summarize what we have learnt so far in this module. However, having downloaded Opts Oracle, I am struggling to select the database. Going by that, selling a call option and selling a put option is also called Short Call and Short Put position respectively. The intrinsic value calculation we have looked at in the previous chapters is only applicable on the expiry day. B2 can hold it till expiry or can transfer his position to B3 before expiry.
Who decides what should be the premium price of a particular option? Hardly any traders hold option contracts until expiry. Really nice initiative sir. However assume you were a seller of the 190 call option intraday and you managed to capture just 2 points again, considering the lot size is 2000, the 2 point capture on the premium translates to Rs. We certainly hope to keep the future chapters as not difficult and lucid as the previous ones have been. You can square it off intraday, no need to hold till expiry. Once we understand these topics we will revisit the call and put option all over again. However I think it is best to reiterate a few key points before we make further progress in this module.
These details are marked in the blue box. Have you tried Metastock? If you have shorted, then you need to hold till expiry to get the full premium. If I am doing so, should I do that by writing a put option? Crudely put, some Option Greeks tends to increase the premium, while some try to reduce the premium. Traders can consider going long on Reliance Communication and Mcleod Russel India for intraday purpose as these stocks have attracted bullish bets. So, which one is better, to square off beforehand or wait till expiry, if there is no risk of incurring loss of money?
Let me try this. You can square off anytime you wish, but exercising is only on the expiry day, and it does make a huge difference on when you can exercise your contracts. Moves like this should not surprise you. IT seems that for the same scrip at the same strike on the same day CE seller and PE seller are paying different margin amount. Extremely thankful to you for sharing. If you are long, then Sq off means you are selling your long position. If fact, for the option buyer to be profitable the market should move away from the selected strike price. Here, I made the simplify excel document, what i learn from here.
INDEX is measures in points and stocks in rupee value. Now I will certainly try Options. This means to say that the option writers earn small and steady returns by selling options, but when a disaster happens, they tend to lose a fortune. Why do premiums vary? Pi and Kite are good, but unlike amibroker etc one cant search with OI in Tradescript. Kite and Pi for charting and TA requirements.
Exercising and squaring off are two different aspects. Going by that, buying a call option and buying a put option is called Long Call and Long Put position respectively. When he sells, the person buying from it becomes the holder of the contract. So having said that the traders prefer to trade just the premiums, you may have a few fundamental questions cropping up in your mind. There are no additional charges that you pay if you hold the sold option to expiry. Also, which part do you want me to elaborate on? This information is highlighted in the red box. If you notice, the premium of the 230 CE opened at Rs. Request you to kindly stay tuned till then. The 190CE premium opened the day at Rs. Any others you can recommend? If on expiry nifty does not fall in this range we surely get profit.
Well, with this I hope you have developed a strong foundation on how a Call and Put option behaves. Great tool, but not sure if its still actively supported. My one friend explained one method in which one can earn money surely if nifty aggressively move upward or downward. Hence, I uphold the part of excel Sheet screen short image here. Generally speaking option sellers tend to hold contracts till expiry rather than option buyers. STT stands for Security Transaction Tax, which is levied by the Government whenever a person does any transaction on the exchange. How to trade the Nifty on intraday basis. Arranging the Payoff diagrams in the above fashion helps us understand a few things better. Hence before we get deeper into options, it is important to have a strong foundation on these four variants of options.
So here is my doubt. If you look at the payoff diagram carefully, they both look like a mirror image. The maximum loss of money of the call option buyer is the maximum profit of the call option seller. This depends on your method. To make profit should I sell the same contract for a higher premium say Rs. You will not make money doing so, or in other words you will certainly lose money in such circumstances. European option means the settlement is on expiry day. Now what happens here B1 just transfers his position to another person, say B2 who is interested to take position from B1. Whereas 1 point change in BHEL refers to Rs. As the markets change on a minute by minute basis, therefore the Option Greeks change and therefore the option premiums! This is to emphasize that both these option variants make money only when the market is expected to go higher. Just to give you a heads up, the focus going forward in this module will be on moneyness of an option, premiums, option pricing, option Greeks, and strike selection.
Thanks for the great explanation. Expiry has nothing to do with this. Hello Sir, if I buy a lot of 1000, call option of strike price 260 at a premium of Rs 2 with a spot price of 250. Please clarify me on this. European trade CE as u said. Please correct me if im wrong.
He can sell it. They do not really wait for the options to expire. The buyer of an option has limited risk, to the extent of premium paid. Assume in this massive swing you managed to capture just 2 points while trading this particular option intraday. Might be, I am not able to get what u explained and I am really sorry for asking it again. We will do the same in the next chapter. When you write an option, the maximum profit you make is to the extent of the premium you receive. If you can master these aspects of an option, let me assure you that you would set yourself on a professional path to trade options.
Dear sir I thank you and your team members for educating the public in stock trading. Hi Sir, excellent explanation. If you have sold and option or holding on to an option which is OTM, then you can let just expire without worrying about Sq off on expiry. When does the build up condition meet? IF latter is possible how do we do it in real trading world. Options was Greek and Latin for me once and now, Im slowly getting the concept with this. Eg the tool can reveal opportunities of shorting scripts if VI is high as compared to 2 SD Vol etc. What is the basis for the change in premium? Firstly, I convey my heartily thank for this type of wonderful effort.
Further, here is a table where the option positions are summarized. Also we have potential of unlimited profit in long call or long put and even we can trail stoploss of premiums. Got your point, see if you are holding the option till expiry you will end up getting the amount equivalent to the intrensic value of the option. Till now it has been very clear and crisp. Which one to select current month, next month or far month? You need a bit of luck!
Lab are two good options for going short on Thursday as massive bearish bets have been built up in these counters. These are fairly common to expect in the options world. Is there a difference if I am closing my position before expiry or excersize it at expiry? Do yoiu have to keep a track of the premium as well as the Nifty Index? Thank you so much for your articles sir. Option Greeks influence the option premium however the Option Greeks itself are controlled by the markets. As mentioned, before expiry date means he just square off his position. Yes, B2 has taken on the risk from B1. Option, Just started trading a week ago. Yes you are right, it becomes the counterparties obligation.
Rohit, this is a classic bull call spread. Hi Karthik, Thanks a lot for these wonderful modules. Well, these questions and therefore the answers to these form the crux of option trading. They give out this information on a daily basis. We will be discussing SL based on Volatility very soon. As Nifty does not have a window to buy or sell how does the Call or Put Option screen look like? Imagination and intellect is the only requirement for creating these option trades. How to select and which one to select because there are many available.
Do they see OI change data for ITM OTM call and puts and conclude that? Click on the stock symbol below to see live Open Interest chart. Similarly, the strike price with highest Open Interest of Puts of considered a resistance level for that stock. The higher the open interest of a particular stock, the better. The charts should not be relied upon for the stocks where the open interest is very low. How to use these charts? Are these charts reliable in identifying support and resistance levels?
Also, if the stock is in sharp uptrend or the momentum is very strong, the trader should not rely on support and resistance from these charts. Generally speaking, the strike price with highest OI of Calls is considered a resistance. The NSE Option Chain chart for stocks above shows open interest data for stock options that are trading on NSE India. The total open interest of Puts and Calls is visible for each strike price for that particular stock. If a particular stock has a market cap of INR 1 Trillion and OI is just ten thousand then the Open Interest data should not be used to identify levels for that particular stock. The major supports and resistances get broken during strong up or down moves.
The charts can be used to identify the support and resistance levels based on Open Interest data.
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