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Bajaj Finserv from 17 July 2020The stock is showing bullish sign in 4h Timeframe ... positional long can be taken. There is consolidation zone present right above the 6403 level ..which might result in some high wick candles MFI is showing sign of increasing .. though RSI and MACD in -ve zone --> consolidation zone very problematical Targets --> 6664 -> 6905 (tough) Trade setup : Safe Setup : ( Sell 5700 PE + Sell 5600 PE ) + ( BUY 4800 PE * 2 ) to decrease margin total profit : 10K margin 160K Nerves of Steel Setup : 1. Sell 5700 PE + Sell 5600 PE 2. Buy 6300 CE use appropriate hedging to decrease margin :: assumption taking 4800 PE *2 and 7200 CE total profit : 90K margin: 180K very risky : 48% success probability
NSE:BAJAJFINSVLong
by Trade_with_yash
Bull Put spread on spike in volatility - The Anty strategy I think with the slightly over-cooked sell-off into an area with high volume trading activity should be price stabilize. This is a strong company with good projected income potential over the next few years. If I was forced to buy it via exercised then I could live with that. In the meantime - I can pick up a credit at close to 'at-the money' and see what happens....it just has to expire in 3 weeks above 18.00 before I'd need to consider 'rolling down & out ' etc The volatility spiked up about 7 % which means the options premiums will be slightly fatter, and there is only 15 trading days left before expires for time-decay to work it away... This is "the Anty" strategy - adopted a bit longer for options
ASX:A2M
by Aussie-scalper
$GOOGL Options play of the month | New ATH!Technical look on $GOOGL with a huge potential options play through earnings Throughout Covid, Netflix has performed rather well since the first wave down, pushing 46% from lows. We are looking for Google to either retest previous ATH or straight rip, will probably play it safe and wait for the retest. If the setup doesn't look good enough for entry, we will simply sit on our hands and wait for the right time. The Play: GOOGL $1,600 Call 7/17 Estimated Time: 7-13 Days - Bullish - Breakout on the upside to make even more ATHs, looking to retest the previous channel resistance. This play will payout stupid but takes quite a bit of capital, congrats if you made a bag on this :) This is not financial advice nor am I a financial advisor DotcomJack (View other option plays below)
NASDAQ:GOOGL
by DotcomJack
BSL Bull Put spread - Aug expires with strikes 10.76/ 10.51 technical reasons - there seems to be a recover in price by rallying past previous low, and after completing corrective legs fundamental - Goldman Sachs have a BUY rating with target of $14.95 over 12 months ( +37%) good probability of this credit spread- with 5 weeks until expiry there is 'time-decay' on side - the implied volatility is high for the past 30 days in upper range 42-47% - European style option cannot be exercised before expiry date - plenty of time to manage on table risk eg. 27/02 payoff diagram shows only -$250 if price down to 10.81, with reward of $1000 this is a good Risk reward if exit in two weeks - Price merely has to stay above the upper sold strike of 10.76 to win - if price rallies a lot can exit the trade for a substantial profit early - if price drops a lot, at a few weeks before expiry can roll down and out to recover loss next month - if decide to own the stock, its better to wait until after dividend payment in September as no tax imputations allowable and best not to have an options trade on during this time.....
ASX:XMJ
by Aussie-scalper
set up BUY if 3.00 good price rating 5.50 GS plus Sept dividend OSH - seems to be well placed for accumulation; I'm just looking for a better entry price...the energy sector chart indicates some scope for further C leg downside correction. So waiting for OSH to test recent low. I figure the following entry technique: 1. in about 1-2 weeks if corrects lower to about 3.00 sell a bull credit/put spread Aug ( I'm looking at 3000 shares worth for about $1100 credit). 2. collect credit premium until Aug 20th expiry- this should get another +10c premium for a discount on buying stock 3. buy actual stock after expires then immediately sell a call above at target price of +50c ; if expires worthless, keep rolling out months until call exercised. 4. possible to collect Sept interim dividend if offered of about 7 c. Goldman Sachs have a 12 month rating ( from March) of 5.50 target ( information from Commsec).
OLong
by Aussie-scalper
NFLX Pre-Move Analysis |Technical look on $NFLX NASDAQ:NFLX with potential options play Netflix makes $100 million commitment to support Black communities in the U.S. As we come toward the end of this massive 10 month wedge, we must be patient. Throughout Covid, Netflix has performed rather well since the first wave, achieving 20% above previous 2020 highs. Will Netflix moon into earnings? Will earnings disappoint long investors? Comment your thoughts below! The Plays: Estimated Time: 7-11 weeks - Bullish - Breakout on the upside or other bullish activity: NFLX $540 Call expiring late september, this break will result in a massive rip in which we will aim to play the continuation. Take profits! - Bearish - Break toward downside, lose of channel: NFLX $460 Put Expiring late September or October. Chart is giving off more bearish signals than bullish but that's not pricing in Covid. We will cover this play when the time is right, be sure to keep your eye on it. This is not financial advice nor am I a financial advisor DotcomJack
NASDAQ:NFLX
by DotcomJack
4
Day trading and Scalping Example NIFTY July 8I use multi time frame analysis very heavily. I always establish context for trading before I start the day. For context and levels, please check the following posts prior to July 8 *** Links Below I am always fascinated by day trading - not because of the lure of quick money. But I think it is extremely hard for me. At least it is hard for my personality. It is always said there are two kind of traders 1. Traders who can think very fast 2. Traders who can think very deep I always see myself comfortable in category two - deep thinker. But to put myself out of my own opinion's prison - I day trade. Though day trading is hard, it teaches many things to me as a trader. 1. Emotional Control and Money Management - I don't have time to adjust , reflect back and somehow prove to myself that I am on the right side. I better quickly exit of my positions with great emotional control. 2. Relentless Planning - Since I don't have lot of time, I have to plan insanely - thinking of all possibilities and my actions. 3. NO to laziness - I cant afford to relax during the day session. I need to have extreme clarity of thought throughout the trading session. Now, one may think that all these learning can be from any time frame trading. That's true. But when you have a ticking clock next to you and market presenting you 1 of n possibilities every single candle, that changes you for good. It makes you fast. Then you can adjust to larger trading styles easily. Below is my example live thought log for the day. I escaped the day with approx Rs 34 / lot profit. Not a bad hunt after crazy price movement! ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- NIFTY chart is extremely positive. Market looks prime for 11000, but global clues soft. Typically, such setups if bullish do not give chance to enter, starts with gap up. If there is no gap up it may be contra indication for sideways movement for the day. Since it is Wednesday , 1 day prior to weekly expiry, it is better to sell options and scalp premium. Risk : large volatile movement. Stop Loss, opening ranges of 1 st hr. Close positions starting from 1:30 PM. -------------------------------------------------------------------------------------------------------------------------------------------- 1. Expectation was rally. But flat opening. Global markets are soft. Hence I sold 9300 CALL. Idea is to cash in Theta loss for the day in case of sideways movement. It is a risky trade. 2. Candle at 9.30 starts confirming this movement. Let this movement complete. 3. Any close below Previous day High, position can be added to. 4. As yesterdays high shows support around 10800, 10700 PUT is sold as well. Again Idea is to get benefitted by sideways movement and theta decay. 5. Overall position entry is now 33+30.30 = 63.30 Rs. 6. Since breakout failed, now NIFTY likely to stay in the range. So 10800 CALL sold 68.05 Rs. 7. So far trade is going ok. definitely signs of consolidation. BANK NIFTY broken out, NIFTY lagging. 8. Position 10700/10900 Strangle : 66 Rs (3Rs loss) Position 10800 Call : 74 Rs (6 Rs loss) -------------------------------------------------- 9 Rs Loss 9. Position 10700/10900 Strangle : 65 Rs (2Rs loss) Position 10800 Call : 56 Rs (12 Rs Profit) -------------------------------------------------- 10 Rs Profit Going as expected. On breakout of the opening range Another short added 10800 CALL 56 10. Opening range breakout failed. 10750 PUT sold, Now look for opportunity to reduce position on 10800 CALL as breakout failed. 11. Usually NIFTY may jump around after 1.30. VIX did not decrease so far. So NIFTY players sense uncertainity at these levels. Closed 10800 1/2 position. Position 10700/10900 Strangle : 56 Rs (10Rs Profit) Position 10800 Call *: 62 (6 Rs Loss) Position 10750 Put : 46 (3 Rs Profit) * Position 10800 CALL : (68-61) (7 Rs Profit) -------------------------------------------------- 7 Rs Profit / 7 Rs Booked Profit = 14 Rs 12. The price range is getting tighter. NIFTY advance decline is 25 to 24 Neutral. 13. As Expected move started. How strong the move to be seen. 10800 PUT sold as initial direction of the move crossing the range. VIX started cooling off 14. Break above range is not showing strong follow through so expansion attempt is not rapid. That is a good sign for my trades. Position 10700/10900 Strangle : 50 Rs (13Rs Profit) Position 10800 Call : 74 (18 Rs Loss) Position 10750 Put : 31 (18 Rs Profit) Position 10800 Put : 50 (4 Rs Profit) * Position 10800 CALL : (68-61) (7 Rs Profit) -------------------------------------------------- 17 Rs Profit / 7 Rs Booked Profit = 24 Rs 15. NIFTY is showing many indecisive moves. It is above previous day high. Essentially, the morning down move can be negated and fresh up move possible tomorrow. It is 2.20 PM so 1 hr to go in trading. Priority will be to close short positions first. Then Long ones. Closed 10800 Put : It was latest and more prone to loss. * Position 10800 Put : 49 (5 Rs Profit) 16. NIFTY dipped below Previous day Low. Now NIFTY can again go to 10800 17. Actually large moevement at 2.30 PM. Closed the positions. Final tally is Position 10700/10900 Strangle : (63 - 45)(18 Rs Profit) Position 10800 CALL : (68-61) ( 7 Rs Profit) Position 10800 CALL : (56-55) ( 1 Rs Profit) Position 10750 PUT : (49-46) ( 3 Rs Profit) Position 10800 PUT : (54-49) ( 5 Rs Profit) ------------------------------------------------------ 34 Rs Profit ------------------------------------------------------------------------------------------------------------------------------- Retrospection : -ve's 1. Position of 10800 PUT sell was not a good position to take, it was more like a balancing previous position. Better option would be to just square off 10800 CALL position for loss. 2. Entry for 2nd position on 10800 CALL could have been better. Also it was not correct with original sideways assumption. +ve's 1. Traded as per the plan. 2. I was able to close everything fast enough before the volatile move. Reference Monthly Analysis Weekly Analysis July 7 Log
NSE:NIFTYEducation
by Observe_Think_Act_Think
1
Amara Raja Batteries from 4 July 2020April-May has shown considerable Upside movement June - July month is showing consolidation period ... prices has touched the red zone thrice ==> also showing breakout ( very high volume ) Daily chart is showing evening doji pattern .... Future price movement can be expected in two ways .. 1. legitimate breakout ... new consolidation zone around 740 ... at-max this month 20-25% growth can be their ... 1 July opening 650 --> max 780 - 812 very tough 2. cup and handle formation then after good investor build up takeoff to 740 zone ---> if prices come down ... then expecting the end of handle to be around 660-666 then shoot to 740 zone trade strategy ... 1 safe one ---> sell 640 PE --> sell at 665 zone 2. somewhat risky --- > sell 640 PE ( at price level of 665) + sell 800 CE right now --> heart of steel require
ALong
by Trade_with_yash
Neutral to bullish - bull put spread ( net credit) Options trade - Bull Put Spread technical - seems like a two legged correction in a weak bullish trend of equal amounts has indicated a pause in price ; The at the money put at 16.50 is sold for credit for Aug 20th expirey; The out of money put at 15.50 is bought for debit net credit $1000 scenarios - 1. If > 16.50 at expires keep money 2. if between 15.50 & 16.50 try to get out around breakeven... 3. If really goes down hard < 15.50 strike or breakeven point, may have to roll down for small loss...
ASX:ORI
by Aussie-scalper
2
Hindustan Unilever from 4 July 2020The stock was moving in sideways channel --> it broke with very much difficulty It is now showing signs of spring entry ... Multiple red candle touched the breakout level and now a jump in price is seen ... possibly showed retest of resitance zone ... Main trade setup can be expected ... 1. Buying ITM CE --> why ITM because if price decrease we don't want to lose to time decay . 2. Selling OTM PE --> this OTM PE can be sell .. price on safe side can be should be below Support Zone (green)
NSE:HINDUNILVRLong
by Trade_with_yash
1
Trader's Guide to Credit SpreadsThe strategies and ideas presented in this guide have been designed to provide you with a comprehensive program of learning. The goal is to guide you through the learning experience so you may be an independent, educated, confident and successful trader. There are numerous variations of traditional options strategies and each has a desired outcome. Some are very risky strategies and others require a considerable amount of time to find, execute and manage positions. Spreads are a limited risk strategy. Spreads Spreads are simply an option trade that combines two options into one position. The two legs of one spread position could have different expiration dates and/or different strikes. Spreads can be established as bearish or bullish positions. How the spread is constructed will define whether it is bullish (rising bias) or bearish (declining bias). Different types of spreads can be used for the same directional bias of the stock. For example, if the stock has a declining bias, a call credit spread or a put debit spread could be opened to take advantage of the same anticipated move down. In this guide we will be talking about Credit Spreads , which are a limited risk strategy. Learning how to manage risk is as important as learning the details of a strategy. Credit Spreads A credit spread is created when an investor simultaneously sells-to-open (STO) one option and buys-to-open (BTO) another option. The premium received for the STO is always greater than the premium paid for the BTO thus creating a net credit to the account. Example : STO a call using the 120 strike for a credit of $5.20 BTO a call using the 130 strike for a debit of $3.80 Net credit for the spread is $1.40 = 5.20 credit - 3.80 debit The ideal construction of a credit spread is to sell-to-open (STO) an out-of-the-money (OTM) strike and buy-to-open (BTO) the strike that is 5 – 10 points further out-of-the-money (OTM) using the same expiration. When opening a call credit spread , further OTM means a higher strike. When opening a put credit spread , further OTM means a lower strike. Both legs are opened on the same underlying equity and use the same expiration month. Call credit spreads are opened when there is a declining bias and will be profitable if the stock moves down. This is because a call credit spread is opened for a credit and since the value of a call option decreases as the stock goes down, at some point the spread will be bought-to-close (BTC) for less than it was sold-to-open (STO). Here is an example: Stock trading at 500 and has a declining bias. STO 510 call BTO 520 call This spread creates a credit of $4.80 Stock declines to 490 causing the values of the calls to also decline. The position can now be closed for a profit. BTC 510 call STC 520 call The cost to buy back the spread is only $3.80. Since the stock declined in value, the call options are cheaper. The spread was STO for a credit of $4.80 and BTC for a debit of $3.80 resulting in a $1.00 profit. Put credit spreads are opened when there is a rising bias and will be profitable if the stock moves higher. This is because a put credit spread is opened for a credit and since the value of a put option decreases as the stock goes up, at some point the spread will be bought-to-close (BTC) for less than it was sold-to-open (STO). Here is an example: Stock trading at 520 and has a rising bias. STO 510 put BTO 500 put This spread creates a credit of $3.60 Stock rises to 530 causing the values of the puts to decline. The position can now be closed for a profit. BTC 510 put STC 500 put The cost to buy back the spread is only $1.80. Since the stock went up in value, the put options are cheaper. The spread was STO for a credit of $3.60 and BTC for a debit of $1.80 resulting in a $1.80 profit. Time decay is a positive factor in trading credit spreads. Since the position is opened for a credit, money comes into the traders account immediately. As time value decays, combined with a favorable movement of the stock, the value of the position will decrease allowing the trader to buy-to-close (BTC) the position for less than it was originally sold-to-open (STO). Risk and Reward on Credit Spreads Reward The maximum profit that can be earned from a credit spread is equal to the net credit received when the spread was opened. For a credit spread to realize the maximum profit, both legs of the spread would need to expire worthless which means the position would need to be held until expiration and be out-of-the-money at expiration. It is not advised to hold positions until expiration. Short term movements in the stock plus time value decay provide opportunities to close out positions for a profit of, generally, about 10%. If a position is profitable and the trader decides to hold the position hoping for a bigger profit or in an attempt to carry the position to expiration, there is a good chance that the profit can disappear, and the position could turn into a losing position. A good way to lose money is to wait for a bigger profit. Risk The maximum risk, or potential loss, from a credit spread is the difference between the two strikes minus the net credit. Example: STO 120 call for a credit of $5.20 BTO 130 call for a debit of $3.80 Net credit for the spread is $1.40 The difference between the strikes is 10 points. $10 is the max risk less $1.40 credit = risk of $8.60. The maximum profit is equal to the net credit, $1.40. Losses occur when the short strike (the STO leg) is in-the-money at expiration. This is because the trader has sold to someone else the right to buy the stock at the short leg strike. Since the trader does not actually own the stock, they will need to buy it and sell it at a loss. A maximum loss will occur when both strikes are in-the-money at expiration. The breakeven point on a bearish (call) credit spread is the lower strike price plus the net credit. Referring to the example above, if the stock settled at 121.40 at expiration, there would be no loss and no profit. Example of breakeven point on above credit spread: Stock trading at 121.40 Buyer exercises the right to buy stock from you at 120. Since you do not own the stock, you buy it at the market price of 121.40 and sell it at 120. This results in a $1.40 loss You get to keep the original credit of $1.40. This netted against the $1.40 loss results in breaking even on the position. The breakeven point on a bullish (put) credit spread is the higher strike price minus the net credit. Calculating the Return There are two ways to view the percentage return of profits from a credit spread. One is to divide the profit by the difference between the strikes. If the difference between strikes is 10 points and the trade resulted in a $1.00 profit, that would be a 10% return ($1.00 / 10). The second approach is to calculate the return based on the amount of capital that was at risk. After all, if the trade lost 100% of the risk, that is the amount the trader would no longer have. So, the profit percent is calculated by dividing the profit by the risk. In the example above, the net risk is $8.60. If the credit spread trade resulted in a $1.00 of profit, the percentage return would be 11.63% ($1.00 / $8.60). This approach shows the importance of managing risk. Lower risk drives higher returns relative to capital at risk. Opening a new Call Credit Spread The following steps should be referred to when opening a new call credit spread position: 1. Review the technical indicators on your chart and confirm there is a consensus between multiple indicators pointing to a declining bias. 2. Select an expiration that is two to four weeks out. Two weeks is generally the minimum time to expiration you want to use. Building time into options positions is advised in case it needs to be managed. The sweet spot for opening new positions is three weeks to expiration. 3. STO an out-of-the-money (OTM) call strike. 4. BTO the strike that is 5-10 points further out-of-the-money (OTM). With a call spread, further OTM means a higher strike. Generally, when properly constructed, the credit on a 5 point spread will be in the range of $1.20 - $1.80. A 10 point spread will generally be 2.50 – 3.50. The closer the strikes are to the current price, the higher the credit, while this reduces the overall risk of the position, it also increases the chances of the position moving in-the-money (ITM) which can result in an overall loss. 5. When placing the order, always use a Limit Order . A limit credit order specifies to the market the amount of the credit you will accept. A limit credit order will be filled at the specified limit or higher. Market orders should not be used. 6. With some stocks and indexes, the difference between the bid and ask is quite large. The broker will usually give you a quote called the “Mark”. This is the midpoint between the bid and ask. It is the price you should start with when submitting your limit credit order. 7. Calculate the risk of the position. Difference between the strikes – credit = risk. A position with a credit of $4.50 and 10 points between the short (sold) and long (buy) strikes would have a risk of $5.50. 8. Use the risk number to determine the number of contracts to open. Risk x 100 = the investment required for each contract. With $5.50 of risk and 1 contract, the total investment would be $550. ($5.50 x (1 contract x 100 shares per contract)). The total investment on 4 contracts would be $2,200. ($5.50 x(4 contracts x 100 shares per contract)). 9. Once you know the total investment required per contract, you can decide how many contracts to trade based on the size of your portfolio and personal risk tolerance. 10. After the trade has been opened, place a Good-til-Canceled (GTC) order to close the position. A GTC order will stay active until market conditions are such that the position can be closed for a profit. GTC orders execute automatically and do not require you to be in front of your trading platform to take advantage of the profit opportunity. Place the GTC for a limit debit price based on your desired profit target. One example is to set a GTC for 50% of the credit you received when you opened the position. With a credit of $4.50, a GTC would be placed to buy to close the position at $2.25 allowing a $2.25 profit.
SP:SPXEducation
by NewCycleTrading
3
Bollinger Band Snaps (BBS)Bollinger Band Snaps (BBS) Timing of options trades are elusive, especially during dynamic price trends. There is one technique, however, that reliably and consistently allows you to time trades. The Bollinger Band Snap (BBS) signal occurs at very precise moments during a bullish or bearish trend, and vastly improves timing of both entry and exit. The chart of Chipotle (CMG ) is highlighted with three examples. The first occurred in late February, when price moved below the lower Bollinger band for two sessions. The move then “snapped” back into range, which is predictable. Price rarely remains outside of the Bollinger Band range for long. The second event occurred in mid-March, when price moved below the lower Bollinger band. In this case, the expected retracement (snap) happened the next market day. The final incident was the longest of the three, from mid-May into end May. Price traded above the upper band for six consecutive sessions before snapping back into range. The signal is reliable because a retracement back into the Bollinger Band’s two-standard deviation range is inevitable. It can take a longer or shorter period, but it eventually occurs. The signal provides both an entry flag (when price moves outside of the band) and an exit flag (when it moves back into range). Trading this signal is also apparent at the time it begins to develop. A move outside of the Bollinger trading range generally is going to snap back within a few sessions in each instance. In the February case, price was approximately $755 per share. With the expectation of a snap back into range, a bull credit spread could be opened with puts. Buying one 735 put and selling a 740 put would have set up a small credit. Using the weekly expirations ensures rapid time value decay. In the second example, price was approximately $465 per share. A call could be opened using 4 – 6 weeks to expiration and opening an at-the-money strike. The credit spread strategy could also be applied in mid-May when price began advancing above Bollinger’s upper band at $998 per share. Buying one 1030 call and selling a 1025 call for a credit. In all of these instances, the entry point is easy to identify. It is seen where price moves outside of the two standard deviation range marked by the upper and lower bands. The exit point then occurs when price snaps back into range.
NYSE:CMGEducation
by NewCycleTrading
3
WES - neutral to bullish strategy : Bull Put Spread ( options) The Consumer discretionary sector is correcting in a Bull leg - it has done 'normal' correction so far in length and time; SO looking at a stronger leading stock in the sector - we have a similar action. As this places a slightly higher probability of the stock at least holding 'above' support zones below - a neutral to bullish options credit spread can take advantage of slightly higher options implied volatility for the past 30 day ( 33% vs 27%) ; and with only 14 days left on June 25th expiry can get the 'time-decay' before it closes below credit leg strike of 40.75. Bull Put spread June expiry : -15 shares @ 40.75 strike ( european) = -0.74 +15 @ 40.06 = +0.53 diff = + $ 464 premium paid no stops required as if stock expires 'in the money below 40.74, I will buy the stock after being exercised and hold for a recovery of any losses on the table whilst doing a covered call strategy for extra income & hold for dividend payment in 2 months time..... The entry strategy : Firstly, the consumer discretionary sector is down three bear bars without too much overlap, and it has equaled the largest correction recently of about -9.5%. As its a fairly strong uptrend, I anticiapte it won't drop to much further or if so, it will recover fairly quickly to AT LEAST present levels for the next two weeks.... ( neutral) This is because this sector is defensive in nature, and coming to end of June Quarter should see ' window dressing' by FUNDs on the conservative side. Stock analysis : WES has a similar corrective degree though only -7.5%, and is the 'Leader' in terms of strength in this sector. The entry signal is based loosely on 'The ANTY' which takes advantage of catching brief corrections in a larger trend. The modified Stochastic indicator shows its cycled down to corrective part of cycle creating a disparity in price to averages. I only haven't waited for 'confirmation of next day recovery because I wish to use an options - spread as ' protection rather than a stoploss, and I want to enter on a down- day to get the most oomph in the put premium I can sqeeze out given only 14 days left for time-decay to do the rest of the errosion in premium ( and thus my profit being a credit spread).
ASX:XDJ
by Aussie-scalper