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SwingTrader
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Post: #1   PostPosted: Fri Dec 20, 2013 11:03 am    Post subject: Options - Q & A Reply with quote

Please ask questions about any kind of options trades here in this topic.

Thanks.

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udaysahai
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Post: #2   PostPosted: Fri Dec 20, 2013 11:45 am    Post subject: Reply with quote

can we ask about stock options i.e. call and puts...
thanks and best regards.
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Post: #3   PostPosted: Fri Dec 20, 2013 11:48 am    Post subject: Reply with quote

udaysahai wrote:
can we ask about stock options i.e. call and puts...
thanks and best regards.


Yes, you can. I will try and answer as best as I can. I haven't traded stock options a lot due to liquidity issues but I will answer whatever questions you may have.

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udaysahai
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Post: #4   PostPosted: Fri Dec 20, 2013 12:19 pm    Post subject: Reply with quote

What are the trends in Mcdowell n and TCS, can we bye ATM calls of both and what would be targets.
Mcdowell n 2650Ce @ 45 and TCS 2100 Ce @ 36 ?
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Post: #5   PostPosted: Fri Dec 20, 2013 12:34 pm    Post subject: Reply with quote

udaysahai wrote:
What are the trends in Mcdowell n and TCS, can we bye ATM calls of both and what would be targets.
Mcdowell n 2650Ce @ 45 and TCS 2100 Ce @ 36 ?
Thanks and best regards.


Sorry, I think I misunderstood your question in your previous post. I can answer your questions about any options strategies but not about specific trades. Specific trades require study of the related stock charts and I may not get time to do that. I trade only NF options. I have not looked at McDowell & TCS charts for a while now.

Please let me know if you want any info about any options strategy, that I can discuss in detail.

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vvsp
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Post: #6   PostPosted: Fri Dec 20, 2013 1:33 pm    Post subject: Reply with quote

Hello ST,

The capital required for setting up one unit of diagnol/vertical spread is Rs.30,000/- or less including margin and cost. Ideally, how much capital should be aside per unit?

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vvsp.
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Post: #7   PostPosted: Fri Dec 20, 2013 1:52 pm    Post subject: Reply with quote

vvsp wrote:
Hello ST,

The capital required for setting up one unit of diagnol/vertical spread is Rs.30,000/- or less including margin and cost. Ideally, how much capital should be aside per unit?

Thanks,
vvsp.


For diagonal or vertical, on average, cost + margin will come to around 21-22,000. Margin will fluctuate a bit so you can put aside around 25,000 per unit.

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Post: #8   PostPosted: Fri Dec 20, 2013 2:09 pm    Post subject: Reply with quote

Thank you ST Sir for your reply.
Best regards.
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Post: #9   PostPosted: Fri Dec 20, 2013 2:45 pm    Post subject: Reply with quote

ST sir
can i post query regarding entry n stop loss for diagonals, according to 13 n 89 ema crossover ( by posting charts for last 8-9 months or so) in this thread ?
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Post: #10   PostPosted: Fri Dec 20, 2013 5:28 pm    Post subject: Reply with quote

maha wrote:
ST sir
can i post query regarding entry n stop loss for diagonals, according to 13 n 89 ema crossover ( by posting charts for last 8-9 months or so) in this thread ?


I have posted three charts using the method and will be continuing with the rest (all signals until now).

But go ahead and post if you have any specific doubts about that method, I will clarify.

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Post: #11   PostPosted: Fri Dec 20, 2013 5:31 pm    Post subject: Reply with quote

Dear ST,

Thanks for detailed response on various aspects related to diagonals.

Ref. my trade which we discussed in main thread. I got the exit signal as ema 3/15 positive crossover happened. Interestingly, PARSAR has remained in bearish mode. I have just squared off the trade today. Will initiate next diagonal in early part of next week.

Sincere thanks and Happy Trading as well as Coaching !
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Post: #12   PostPosted: Fri Dec 20, 2013 9:16 pm    Post subject: Reply with quote

Gemini wrote:
Dear ST,

Thanks for detailed response on various aspects related to diagonals.

Ref. my trade which we discussed in main thread. I got the exit signal as ema 3/15 positive crossover happened. Interestingly, PARSAR has remained in bearish mode. I have just squared off the trade today. Will initiate next diagonal in early part of next week.

Sincere thanks and Happy Trading as well as Coaching !


Ok. Whatever the method to select trades, make sure you have thought through it. Make sure you stick to it consistently. This is necessary to realise the full potential of that particular method.

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Post: #13   PostPosted: Mon Jan 27, 2014 9:08 pm    Post subject: Selling option Reply with quote

Dear ST Sir,
If we go for selling the spread (Vertical or diagonal), what will be its results? As there is always time decay in options, rather than buying call spread ( when we are bullish) selling put spread will lead to lesser loss if market goes against us.
On 23/01/2014, I took diagonal call spread i.e. baught CE 6200 Mar @ 302 & sold CE 6400 Feb @ 105. Now this position is in loss almost Rs.52*50 per lot.
Again today market closed below the pivot support after bearish cross-over of EMA13/233.
Thanking you.
Dr.Suhas Kothavale
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Post: #14   PostPosted: Mon Jan 27, 2014 10:31 pm    Post subject: Re: Selling option Reply with quote

drsuhask wrote:
Dear ST Sir,
If we go for selling the spread (Vertical or diagonal), what will be its results? As there is always time decay in options, rather than buying call spread ( when we are bullish) selling put spread will lead to lesser loss if market goes against us.
On 23/01/2014, I took diagonal call spread i.e. baught CE 6200 Mar @ 302 & sold CE 6400 Feb @ 105. Now this position is in loss almost Rs.52*50 per lot.
Again today market closed below the pivot support after bearish cross-over of EMA13/233.
Thanking you.
Dr.Suhas Kothavale


Before I give you my opinion about selling verticals/diagonals let me talk about the trade you initiated on 23rd Jan.

You will really need a good method to initiate a trade. 23rd Jan was no day to initiate a bullish diagonal. A bullish trade would have been okay on a daily close above the 2nd Jan high (13-233 EMA method, crossover was on 13th, 2nd Jan high was prior pivot to break) but not before that (I was waiting for this signal and would have initiated a bullish trade if this had happened). Anyway...the trade you initiated would, of course, be in significant loss as price turned against you immediately and that too with increased volatility. Volatility would have benefited the diagonal but price moved down too fast. There is no option but to close this trade if it hits 15% loss. I can only suggest you to think more on trade initiation method. Consider the 13-233 EMA method I had posted recently or if you are using your own method then continue and stick with it. I strongly suggest you to paper trade ITM/ATM/OTM diagonals for the same trading method signal to get a handle on P/L characteristics of all types of diagonals. Do this for a while before you trade live. In any case, such moves against our trade will happen from time to time and this can't be avoided for any trading method. The only option is to thoroughly know what to expect and be prepared for the worse and know exactly what you will do if you encounter such a situation.

About selling verticals/diagonals....if you want to sell, do sell only verticals but not diagonals. If you sell a diagonal then make sure you exit quickly as time decay will be working against you and not for you. In case of selling verticals time decay would work for you and is fine. Just make sure you sell OTM verticals. You will have to be strict about SL in this case as you can lose significantly and fast if you are wrong.

There are no good or bad trading methods. It all boils down to how well you have mastered all aspects of the method. You will have to know the in & out of the method and stick to it for a while to trade it well and reap its rewards.

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Post: #15   PostPosted: Tue Jan 28, 2014 7:37 am    Post subject: Reply with quote

Thank you ST Sir for prompt reply.
Dr.Suhas Kothavale
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