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Options-strategy

BANKNIFTY FUTURE INTRADAY VIEW:-EXPIRY DAYI told day before yesterday that banknifty will fall first and then in next day, it will again rise. Banknifty reacts exactly the same as I predicted. BNF buy above 34370 Target:-34800 As per open interest, 34000PE added huge OI and 34500CE, 35000CE seems equal OI which indicates a rally !! Once if breaks and manages above 34560 will try to move 34800 levels support:-34250, 34150 and 34000 (Strong support zone) Banknifty index may open gap up above 34500 to test break out point @34627. Here watch Bank nifty has to sustain above it to move up towards 34800. Be alert if Bank nifty unable to hold above break out point then may slip towards 34300 and 34113.
NSE:BANKNIFTY1!Long
by biplab86
In Search of an Edge for Non-Professional TradersCBOT:ZW1! What do Gold, Crude Oil, Natural Gas, Corn, Soybeans, and Wheat have in common? Their prices all go up in a global crisis. In other words, these strategically important commodities are positively correlated with the level of risk. “Risk Up, Price Up; and Risk Down, Price Down”. Everyday non-professional traders (NonProfs) usually have a disadvantage trading these futures contracts. Let’s see who we are up against: • Commercial Firms, including producers, processors, merchants, and major users of the underlying commodities. • Financial Institutions, such as investment banks, hedge funds, asset managers, proprietary trading firms, commodity trading advisors and futures commission merchants. These professional traders (Profs) have industry knowledge, market information, research capabilities, trading technologies, high-speed and seemingly unlimited amount of money. They contribute to about 80% of trading volume for a typical futures contract. So, what could you do in an uphill battle? Recall our Three-Factor Commodity Pricing Model( ): Commodities Futures Price = Intrinsic Value + Market Sentiment + Global Crisis Premium In peaceful times, the coefficient of Crisis Premium is zero. The Profs win out easily. When a global crisis breaks out, price pattern may be altered completely. The chart illustrates how CBOT Wheat Futures behaves before and after the start of Russia-Ukraine conflict. Based on Efficient Market Hypothesis (EMH), a baseline futures price reflects all information regarding the Intrinsic Value and Market Sentiment factors. However, the Crisis Premium is unknown to all of us. The Profs could not use fundamental analysis or technical analysis to gain a better understanding of Mr. Putin’s mindset. Few had inside information of the inner working of the Kremlin or the Russian generals, either. Your guesses are just as good as the Profs when it comes to what’s happening next. An analogue: In a close-range hand combat, the Profs have no use for their arsenal of missiles, fighter jets and tanks. NonPros with limited resources are on an equal footing to trade against the Profs. It’s critical to pick a fight that you have a chance to win. Recall that we discussed how to define global crisis with binary outcomes, and select financial instruments based on their responses to those outcomes. ( ) For CBOT Wheat Futures, Ukraine conflict has become the dominant price driver since February 14th. But after four months, we still have no clue when or how the war could end. Let’s define it in two simple outcomes: War and Peace. The first one includes all scenarios that the war would continue or intensify, where the second one could be a peace deal or a victory in favor of either Russia of Ukraine. As a NonProf, you don’t want to dive deep into the impossible task of forecasting the different scenarios. Keep it simple: War = Risk Up, Peace = Risk Down. The probability of either outcome is real. It’s difficult to predict which one is more likely. Therefore, directional trades of Long or Short are both risky. Many event shocks exist to make the wheat price fluctuate. If a major wheat producing country announces an export ban, wheat price could fly because of global market shortage. However, a phone call between Mr. Putin and Mr. Zelenskyy could punch wheat price to the ground. Russia is the No. 1 wheat exporter. An end of the conflict could end the sanctions against Russia and increase global supply by 44 million tons of wheat. Looking back in 2018 and 2019, we know how strongly Gold Futures reacted to a call between the U.S. and China. A Long Strangle options strategy may be appropriate under these circumstances. Investor would purchase a Call and a Put option with a different strike price: an out-of-the-money (OTM) call option and an OTM put option simultaneously on the same wheat futures contract. This is based on my belief that wheat futures price could experience a very large movement, but I am unsure of which direction the move will take. The following is an illustration (not an actual trading strategy): September Wheat Futures (ZWU2) is quoted at $10.54/bushel on June 14th. An OTM call with a $12.00 strike price is quoted at 17 cents. An OTM put with a $9.00 strike price is quoted at 4.625 cents. Look at the chart again, you will see wheat price at $7.80 right before the war and up to $13.70 in early March. A Long Strangle will cost $1,081.25, as each call and put contract is based on 5,000 bushels of Chicago wheat. This is the maximum amount you would lose if wheat price stuck at current level in the next two months. A big move, either up or down, could make one of the two trades profitable, and hopefully with enough profit margins to cover the other losing trade. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CBOT:ZW1!
by JimHuangChicago
4
Bear Call SpreadAs i discussed in my last post if Nifty reaches to my Reasistance zone I will create an Option Strategy so i did created "Bear Call Strategy" by selling a Call of 15700 and against that Anchor unit bought an offset uinit of call 15950 for perfet spread i want to buy 16000 CE but it was not liquid at that time and was available only for Intraday you can't convert it to Holdings. Here i want to state that both calls are of next expiry as a day after tommorow is expiry day and i didn't want that my options epires worthless. "TRADE RIGHT, SIT TIGHT"
NSE:NIFTYShort
by r7888911518
VIXY Bearish inclined Naked Calls 17 June Expiry Whats The Plan/Trade/Thought For some reason the VXX options contracts seems to require a lot of Margin/BP to develop a decent premium. As such I decided to look at other VIX related ETFs and found VIXY well priced and from my research has a closer correlation with the VIX Over the past year of trading options i’ve come to realised that I’m really trading volatility in the different sectors. This trade is my hedge trade and while I believe we are in a bearish situation now, I believe we will be ranging at least for the time being. Hence I am somewhat not directional with VIXY Risk Mitigation I have two S&R points for this trade with the key S&R 1 at 26.64. This will be my guard rails and reaction points for risk mitigation I Feel I feel comfortable on this trade, I’m somewhat still feeling the effects of last month. But I cannot let that influence me Imagine Yourself Taking The Other Side This is a possibility given that I am not directional but I could only mark one S&R point Look For New Information By selling Calls, I am accepting that there won’t be a steep reversal How Do I Feel Now Clear on why I have taken this trade Trade Specs Sold 255 Calls @ 0.27 - Strike 27 46.26% to Strike BP Used 85K Max Gain $6630
CBOE:VIXYLong
by Ronin_trader
CWH Bearish inclined naked calls 17 June expiry Whats The Plan/Trade/Thought CWH is part of the Recreational Vehicles sector, that came out of my shortlist of companies with medium level volatility in the past month Across the sector there is a bearish alignment which is important I do expect some volatility with an upwards movement as price across the markets might stabilise from the past 5 weeks of back to back drops Risk Mitigation Very clear S&R lines. If price breaks S&R 1, I will have to close the trade. I Feel I feel confident about this trade as I will be using my S&R lines as a risk mitigator. Imagine Yourself Taking The Other Side With the bearish price action from the past 5 weeks, selling puts would be too risky and almost as if you are trying to guess the bottom Look For New Information Dividends is happening on the 13 June. But I have not seen this event result in volatility How Do I Feel Now Good, I’m clear Trade Specs Sold 236 Calls @ 0.25 - Strike 34 23.6% to Strike BP Used 66.9K Max Gain $5,900
NYSE:CWHShort
by Ronin_trader
Nifty EvolutionKeeping neutral to bullish view applied Bull put spread as volatility is very high but as the nifty contineously stucking below 15800. 15800 PE going in LOSS day by day squared off the positions and sold CE of two strike price 15900 & 16000 as in any case nifty not going to cross it and sold PE of 15500 because after falling 400 points either nifty shows recovery which didn't shown and remains in range so total of 1CE sold 15900(@46.40)+ 3CE sold 16000(@22.18) + 3PE sold 15500(@33.58). "Key element is view and knowledge what and how i am doing so toal range for me now becomes 15900 to 15500 if closes in between or today remains in between banks most of premium and HAPPY
NSE:NIFTY
by r7888911518
#OP/USDT 15M CHART UPDATE !!Welcome to this quick OP/USDT analysis. I have tried my best to bring the best possible outcome in this chart. Reason for trade:- OP is trading in an uptrend channel and respecting the support and resistance level. The support is $1.27 area and the major resistance is $1.59-$1.66 area. Try to grab some OP near support level with tight stop loss.$1.24 Remember:-This is not a piece of financial advice. All investment made by me is at my own risk and I am held responsible for my own profit and losses. So, do your own research before investing in this trade. Sorry for my English it is not my native language. Do hit the like button if you like it and share your charts in the comments section. Thank you...
Long
by CryptoSanders9563
#OP/USDT 30M CHART UPDATE !!Welcome to this quick OP/USDT analysis. I have tried my best to bring the best possible outcome in this chart. Reason for trade:- OP is trading in an uptrend channel and respecting the support and resistance level. The support is $1.35 area and the major resistance is $1.59-$1.66 area. Try to grab some OP near support level with tight stop loss. Remember:-This is not a piece of financial advice. All investment made by me is at my own risk and I am held responsible for my own profit and losses. So, do your own research before investing in this trade. Sorry for my English it is not my native language. Do hit the like button if you like it and share your charts in the comments section. Thank you...
Long
by CryptoSanders9563
2
BTCUSD / COINBASE Correlation I have been watching how the Coin base equity stock is trading compared to Bitcoin . We are able to spot very good trading opportunities, such as the bear trap shown above. As of now, $COIN closed at 75.29 on Friday afternoon, which is above last weeks highs. Most people will try to go long because they consider that a breakout. On the other hand, on Friday BTCUSDT was near the lows of last weeks. Now, its at near highs. I have already published another idea explaining why COIN is a sell. Will be following my stop loss and take profit levels. I'll be quick to switch sides if i see the right price action.
BITSTAMP:BTCUSD
by StavrosK
NVDA Possible Short entry targeting 195 before earning!So many indicators at sell signals - bearish daily candles - bearish RSI and guess what everything looks bearish before earning report which is expected to beat expectation (est. 1.3 eps) . The idea: This is good spot for short entry targeting 195-188-175-165-155 with stops at recent gaps at 258-231 . The expected scenario is to go down to new low for 2022 then strong bounce to 250-280-320. BUT on other side its possible for strong bounce at any moment with long green candle which will award Call options so Strangle here up to earning report will be much appreciated.
NASDAQ:NVDALong
by WinnerTrader99
4
A Rule for OPTION Call Writing Making a good strategy help to be consistent in OPTION Writing Here we will look some key point for Option Writing and the Rules . 1. Market runs in FEAR and GREED ,Make the most out of it for your trading A stock which try to move up is very rare than most of the stocks try to fall badly This is due to buyer and selling greed and Fear, When fear plays sell happens more than Buy 2. Make advantage of Falling Market or Sideways Market Theta (Time) decay will help option trader to be write even if you take a wrong position 3. Identify a level beyond which the price will not move above or sideways move also ok 4. Fix the strike price which is reasonably above from current market price Example : if a Current Market price is 1000 prefer Call side 1200 ,1300,1400 ,1500 strikes for CALL Short selling 5. Always Sell the Call on OTM (Out of the Money Range only) 6. Check the Volume and OI both must be having highest or better highest numbers ,this would help to avoid a situation where you have no buyers to cover you short CALL later 7. Check the BID and OFFER Price ,Place the Call Sell order by the OFFER Price or BID Price 8. Always choose the EXPIRY contracts which will have 40days time to get more premium price of the particular contracts. if a expiry occurs in 10days avoid this month contract ,go for next month contract #6 th point is due to this only ,volume matters for the trade, no volume then no trades 9. Always aim to short the CALL on the higher price 10. Do not average the CALL price often ,Set a average limit as 25% price move from the entry price if this is helpful Like, Comment and feedback your view
L
by MarxBabu
JWN Bullish inclined Naked Calls 20 May Expiry (May Track 3)Whats The Plan/Trade/Thought I had filled my Macy’s trade first but as I was looking at the charts I realised that it was possible for me to create some sort of a hedge with JWN and M (one being Puts, the other Calls). JWN similar to Macy’s has strong S&R lines at 30, 26 and 24.19 As I believe we are in the ranging situation. I expect the price to drop or go up but be contained within the S&R lines at least for the short term I Feel I’m entering this reflection post and 2 days after filling this trade, Fed Powell announces the rate hikes and the price drops by 5.25%. Not surprising, but I didn’t expected this drop to happen so quickly. I figured this would happen closer to May. I’m still confident of this trade plan Imagine Yourself Taking The Other Side This is possible also as it is aligned with the range movement I expect and there is an S&R line at 30.20 Imagine Yourself As A Neutral Observer This trade as a hedge with the Macy’s trade makes good sense and the strong S&R lines below at 26 and 24.19 gives good resistance Look For New Information Before trade entry Nordstrom generally has positive news with it rising 27% How Do I Feel Now I feel ok, with the current situation but will have to monitor how the first S&R line holds Trade Specs Sold 340 Puts @ 0.22 - Strike 22.5 % to Strike 29% ATR 22% BP used 75k Max Gain: 7534.4
NYSE:JWN
by Ronin_trader
M Bearish inclined naked calls 13 May expiry (May Track 2)Whats The Plan/Trade/Thought The Departmental Store sector was not one of my original shortlist. But I also do think my current method of shortlisting from the median of the monthly performance (both negative and positive), might not be the best. Even if the price performance meets my expectations on what I should be trading in a volatile ranging market. Earning season did not help as part of my strategy is to stay away from earnings which are unpredictable With nothing to show for my May shortlist. I was exploring my past trades and found that the Departmental Store sector had good prices and WAS close to how I wanted the price movement to be (within a range). Macy’s had strong S&R lines at 28.54 and 22.97 and had lower high points I sold calls on this as I expect it to range between the S&R points with a bearish inclination I Feel I felt good about this trade, confident as it met my expectations and what I was looking for. Imagine Yourself Taking The Other Side With the lower highs I would be worried. Also i expect some bearish movement from the Fed announcements early May We do know that while the overall consumer sentiment has been bearish, consumer spending is up and rising. This could drive some upside Imagine Yourself As A Neutral Observer Given that we feel that it is a Ranging market with Strong S&R lines. I think both could be right but with interest rate increases the probabilities are more bearish Look For New Information No new information that I could find on Macy’s How Do I Feel Now Post entering the trade, I feel good especially since prices have drop with Fed Powell’s announcement on the half-point hike. I was expecting this price drop to happen in May and not this week as the half-point hike is not a surprise and has been reported before Trade Specs Sold 290 Calls @0.26 - Strike 31 % to Strike is 15% ATR is 1% BP used 75k Max Gain: 7540
NYSE:MShort
by Ronin_trader
AAL Bullish inclined naked puts 20 May expiry (May Track 1)Whats The Plan/Trade/Thought My original intention was to leverage the volatility from the rate increases to enter VXX. However the BP (Buying Power) requirements were pretty high. Making IT less attractive in risk and reward The airlines sector are seeing signs or recovery with surges over pre-pandemic level in March. United Airlines (21 April) have forecasted a profit this year. Looking at the Airline stocks with similar prices movements. I decided to sell puts with AAL as I expected traders to jump into this sector with obvious recovery elements. Especially since Tech companies have been victim number 1 with the rising interest rates. I also saw markets rising after Powell’s address and I figured the volatility was all done. Boy was I wrong haha I Feel I’m entering this post entering the trade. Hence my views now are slightly impacted with what has transpired on Thursday and Friday. I feel I have made the right decision based on the information I had. However Given that my overall stance was that it was a bearish sideways market. 2/3 of my trades should not be bullish. I am not good at predicting the market, so I must be aware of the probabilities across all my trades and not just each individual trade In my reflection, how I could have also structured this is, riskier trades should be tied to closer expiry dates Imagine Yourself Taking The Other Side Right now post entry, post 5,6 May blood bath. It must feel pretty sweet Imagine Yourself As A Neutral Observer In all states (Bullish, Bearish and Neutral). We all agree that the market is ranging and is highly volatile. As such the trade currently is not moving entirely unexpectedly. I think was was unexpected was the Bullish market wide move, followed by two red days Look For New Information Current bearish price action is a market wide drop. There could be recovery or it could continue dropping. We have some allowance, but it’s getting tighter How Do I Feel Now A little worried about Monday, but I know this trade individually is made of sound decision elements. However as part of an overall monthly trade structure, this new trade weakens it Trade Specs Sold 350 Puts @ 0.13 - Strike 15.5 % to Strike is 17.5% ATR IS 5% BP used 54k Max Gain: 4322.5
NASDAQ:AALLong
by Ronin_trader
EUR/USD 20 year low what happens with Peace?EUR/USD has taken the brunt of the USD strength since the Ukraine War and Russian sanctions soured the economic outlook of the Eurozone. What happens with peace? Well obviously we rally but the argument is that with the ECB acting as well we will not just bounce but fly back above EUR/USD 1.10. Now timing this potential outcome is the issue and we could rally organically from 20 year lows if the USD weakens as well. FX Options are a solution and on our easyMarkets Options are made accesible for everyone. 3 month EUR/USD is currently 240 pips so we have a long time for peace with a maximum loss of 240pips. For more information on Options, Professional traders will get a 1-1 tutorial from a FX options Dealer.
Long
by easyMarkets