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Como negociar em opções de bancos nítidas
Banknifty é o segundo índice mais popular na India Stock Markets, primeiro obviamente é Nifty. O Banknifty é um índice setorial composto pela maioria das ações bancárias indianas líquidas e de grandes capitais.
12 Os estoques bancários fazem parte do índice Banknifty com diferentes níveis de pesagem. Os bancos incluídos neste índice são: Banco Axis, Banco de Baroda, Banco da Índia, Banco Canara, Banco Federal, Banco Hdfc, Banco Icici, Banco Indusind, Banco Kotak, Banco Nacional Punjab, Banco Estadual da Índia, Yes Bank.
O que fazemos no BANKNIFTY?
Estamos negociando em Banknifty desde há muitos anos e vimos e sobreviveram muitos movimentos voláteis dele com sucesso. Agora, desenvolvemos um plano de negociação denominado The Banknifty Plan, onde fornecemos um método passo a passo para negociar de forma rentável em opções de Banknifty.
PORQUE você precisa desse Plano de Negociação?
Verificou-se que os mercados são amplamente operados por fabricantes de mercado. Então, se você está negociando com métodos antigos de análises técnicas ou teorias de software, essas teses são muito conhecidas por esses fabricantes de mercado. Certamente eles criarão situações em que suas perdas serão atingidas. Parar a perda também é uma perda. O Plano Banknifty é algo que não depende de nenhuma especulação ou direção. Depende da lógica do mercado e, enquanto os mercados estão lá, funcionará. Então, siga a lógica do que a especulação e as chances de sucesso são cem por cento.
Como você pode obter este Plano de Negociação?
Visite a página The Banknifty Plan neste site para conhecer os detalhes de obter este plano. Você também pode contatar-nos no 09311654963.
Quem deve ir para este plano de negociação?
Se você é um comerciante existente e tem alguma experiência em opções de negociação, você deve ir para este plano de negociação. Se você é totalmente novo no comércio de derivativos ou na negociação Nifty / Banknifty, não o encorajamos a comprar este plano.
Aprenda com ETMarkets: como jogar em contratos de opções semanais de Bank Nifty.
Benefício para trocar: espera-se que o novo contrato de opções semanais no Bank Nifty seja um sucesso com operadores de opções, dizem especialistas. "No segmento NSE F & O, as opções de índice (Nifty & Bank Nifty) contribuem com cerca de 75-80 por cento do volume de negócios do mercado. Este novo produto pode gerar volumes de negociação adicionais na plataforma de câmbio", Chandan Taparia, Analista de Derivados - Equity Research, Anand Rathi Financial Services disse à ETMarkets.
A Taparia disse que o novo produto seria mais adequado para a noite, bem como cobertura semanal em um prêmio menor, especialmente no momento de um grande evento doméstico ou global.
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Mercado agora: Confira os estoques que ampliaram 10%
O índice NSE Nifty50 do índice de referência do patrimônio foi 8 pontos abaixo em 11,077, enquanto o BSE Sensex foi de 53 pontos para baixo em 36,109, às 10h30 (IST).
Os retardatários da Largecap podem gerar um grande crescimento: veja estas ideias.
Alguns analistas acham que muitas dessas ações podem emergir candidatos potenciais de retorno.
Mercado agora: essas ações caíram mais de 5% na NSE.
Os mercados de ações refletiram o temperamento descendente antes do prazo de validade do Futures and Options (F & amp; O) para a série de janeiro de hoje.
Mercado agora: os estoques de TI caem; HCL Tech, Infosys melhores perdedores.
O índice de TI Nifty estava negociando 1,13 por cento abaixo em 13.099 por volta das 10:15 da manhã (IST).
Mercado agora: Bharti Airtel, Vedanta entre ações mais ativas em termos de valor.
A maioria das ações ativas em termos de valor ajuda os investidores a identificar as ações com o maior volume de negócios durante o dia.
Mercado agora: bancos de PSU afundam, reagem negativamente ao plano de recapitalização.
O índice Nifty PSU Bank estava negociando 2,21 por cento abaixo em 3.878 em torno das 09h45 (IST).
Sensex, Nifty open flat; As ações bancárias aumentam até 10% no pacote de recapitulação.
Os investidores nacionais optaram por aliviar a exposição antes do fim de semana prolongado e orçamento na próxima semana.
Rupia começa em alta, até 20 paises em 63,49 vs dólar.
O índice NSE Nifty caiu 1,50 pontos, ou 0,01 por cento, em 11.084.
Mercado agora: PNB, SBI, BoB entre os estoques mais negociados.
Os benchmarks de equivalência patrimonial Nifty50 e Sensex estavam na zona negativa antes do prazo de validade do Futures and Options (F & amp; O) para as séries de janeiro de hoje.
'COMPRAR' ou 'VENDER' idéias de especialistas para quinta-feira, 25 de janeiro de 2018.
Jindal Steel & amp; O poder é uma chamada de "Vender" com um preço-alvo de Rs 262 e uma perda de parada de Rs 282.
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Direitos autorais e cópia; 2018 Bennett Coleman & amp; Co. Todos os direitos reservados. Desenvolvido por Indiatimes.
Como transformar as opções semanais do Bank Nifty em uma máquina regular de condução de renda?
O contrato do Bank Nifty Weekly Options foi introduzido pela Bolsa Nacional de Valores da Índia (NSE) a partir de 27 de maio de 2018.
Mais cedo, apenas o contrato de opções mensais estava disponível para negociação para todos os instrumentos, incluindo ações e índice, enquanto que agora você pode negociar no contrato de Contrato Níquel Semanal do Banco onde o dia de caducidade para este contrato semanal é quinta-feira de todas as semanas.
como essas opções semanais no índice bancário têm benefícios sobre os contratos de opção mensais?
Por que trocar as opções semanais bancárias e semanárias do que os futuros de bancos comerciais?
Como podemos negociar essas opções nítidas bancárias semanais para ganhar dinheiro?
Os benefícios das opções de negociação sobre os futuros, conforme descrito no artigo Parte VII e # 8211; Começando com o Trading & # 8211; Como trocar opções? é que todo investidor está familiarizado com o velho ditado de & # 8220; Comprar baixo e vender alto & # 8221; mas com opções você pode fazer lucros quando os mercados estão indo para cima, para baixo ou mesmo para os lados.
As opções oferecem uma vantagem para você como comerciante para ganhar dinheiro, mesmo quando os mercados não estão tendendo e presos na faixa de consolidação.
As opções semanais nos darão a qualquer momento oito contratos semanais (Call / Put) no Bank Nifty Index para negociação junto com o contrato de expiração mensal do terceiro mês. Portanto, assim que expirar o primeiro mês, os contratos semanais para o terceiro mês também serão disponibilizados.
Por que os novos comerciantes sentem que a negociação de opções é como jogar?
A maioria dos novos comerciantes que entra no mercado ficou entusiasmado e fascinado ao saber que eles podem comprar um mercado ou um estoque com oportunidades para obter lucros ilimitados.
e isso também com um risco muito limitado ao comprar as chamadas fora do dinheiro.
Parece um bom lugar para começar e se sente ser uma varinha mágica que os levará a novas alturas simplesmente comprando as opções de OTM baratas e ganhando grandes ganhos.
Isso sentiu-se sincronizado com a psicologia do comerciante (especialmente os novos vencedores) de comprar um estoque baixo e vendê-lo alto, onde eles caíram na armadilha de comprar ações de baixa qualidade a preço barato.
O que acontece depois,
Toda a loucura entrou em um dreno para a maioria dos recém-chegados quando a maioria das suas idéias comerciais de comprar opções baratas & # 8230; & # 8230; passou a ser nada digno e tudo se torna um Apocalipse.
Isso ocorre devido ao fato de que o comerciante não precisa estar certo apenas com a direção do movimento de preços, mas também tem que estar certo com o tempo.
Se estamos errados sobre qualquer um dos itens acima, isso resultará na perda do prémio pago.
Geralmente, os mercados estão em fase de preparação por mais de 70% do tempo, o que leva a mais de 70% do contrato de opção expirar sem valor, ou seja, tornam-se ZERO.
Assim, o tempo funciona como um inimigo para o comprador da opção, pois cada dia o subjacente não se move, a opção premium começará a derreter e evaporar.
Portanto, se você é um comprador de opções, então há 30% das chances de que você será lucrativo enquanto o vendedor tiver chances de 70%, o comércio será a seu favor.
Pergunte-se o que você escolheu para trocar quando você entrou no mercado de negociação pela primeira vez & # 8211; Opções de compra como o risco é limitado ou Opções de venda que tem mais risco envolvido?
Você sabe que o maior erro cometido pela maioria dos comerciantes é que eles pensam que deveriam trocar todos os dias.
Eles pensam que o comércio é tudo sobre estar na frente de sua mesa de troca todos os dias, e comprar e vender esquerda e direita.
E, eles caem sob a armadilha.
Se você realmente quer evitar grandes perdas comerciais, você precisa ter alguns fatos e razões para negociar.
E acredite em mim, você precisará aprender muita paciência para entender o mercado, enquadrar e seguir suas regras de negociação.
Evite a armadilha, Leia Por que negociar todos os dias é um plano bobo (e o que fazer em vez disso) para entender como o dia de negociação é diferente do pensamento geral de negociação a cada dia.
E, como os profissionais trocam os mercados para evitar cometer os mesmos erros repetidas vezes.
Você pode ter lido e ouvido milhões de vezes que o risco com as opções de compra é limitado ao preço do prémio pago. Certo?
Mas você sabe que podemos até ficar preso e perder mais do que o valor do prémio, mesmo quando você está comprando opções e se eu lhe disser que você pode sofrer perda, mesmo depois de ter um comércio rentável.
Leia o Aviso: 5 armadilhas a serem evitadas ao negociar as opções semanais do NIFTY no dia de expiração para saber como o adágbio teórico de perda limitada ao comprar opções não é completamente verdadeiro em todos os casos e como evitar uma das maiores armadilhas do que nós chamar como um & # 8220; Contract Shock & # 8221 ;.
Vamos voltar às opções & # 8230 ;.
Por isso, não queremos dizer que os compradores das opções não ganhem dinheiro ou não devemos comprar as opções de qualquer forma?
Eles fazem & amp; Nós também devemos fazer isso # 8230;
Então, sempre que você for opções de compra, especialmente aquelas que atraem muito interesse dos novos concorrentes, ou seja, que estão fora do dinheiro, você precisa de uma justificativa sólida e válida e um fato para provar que os mercados irão aumentar e que também antes do termo do contrato & # 8230 ;.
Quando você sabe que o mercado vai subir ou cair por causa de algum padrão de conclusão em gráficos ou outros motivos, então faz sentido comprar opções e alcançar alguns bons resultados.
Podemos ter razão com a análise de que o mercado pode aumentar, diz 200-300 pontos com poucos dias e as chamadas OTM explodem 100-300% dentro de alguns dias.
Da mesma forma, existem maneiras em que podemos comprar uma opção de compra com uma perda de parada próxima para intraday quando esperamos que o banco habilmente complete um padrão e prepare-se para se reunir e ganhar dinheiro decente em nosso comércio.
Mas isso exige que você esteja muito certo com sua análise especialmente com a direção do mercado.
Nós aqui gostaríamos de deixar claro que não é que não compramos opções .. Nós fazemos & # 8230;
Mas essa estratégia tem pré-requisitos diferentes e deve ser implementada quando esperamos um movimento direcional claro no banco nifty após padrões claros ou baixos.
A compra será rentável somente quando pudermos analisar e prever a direção e um grande impulso de preços no subjacente, enquanto a venda pode ser rentável quando você está certo com o pensamento geral de que o mercado pode consolidar ou não ir acima ou abaixo de algumas marcas psicológicas importantes.
Portanto, os recém-chegados não devem cair na armadilha das opções de negociação comprando chamadas baratas ou colocando apenas porque estão negociando a preços baixos.
Como comprar sempre funciona como jogar no casino onde os vendedores das opções são donos dos casinos com maior probabilidade de obter o comércio a seu favor.
Não há comparação quando você compra um estoque de alta qualidade a um preço razoável e quando está comprando ações de baixa qualidade apenas porque está negociando a um preço barato.
Você, como comerciante, sempre terá uma vantagem e terá maiores chances de sucesso no comércio ao detectar e inserir um estoque de alta qualidade.
Como mesmo o risco será muito menor e as recompensas serão muito agradáveis.
Warren Buffet para Investir nos Stocks disse:
"O grande erro que fizemos nos primeiros anos foi tentar comprar um negócio ruim a um preço realmente barato # 8230;
Levou cerca de 20 a 30 anos para descobrir que não era uma boa idéia ".
Pensamentos semelhantes podem ser aplicados enquanto estamos negociando ações, futuros ou as opções. Então, não é o preço ao qual a opção está sendo negociada e é mais sobre a avaliação da probabilidade que esperamos pelo sucesso do comércio.
A grande consideração aqui é primeiro conhecer e entender a oportunidade e a probabilidade do sucesso do comércio, especialmente quando as opções de negociação, em vez do custo de comprá-lo.
Mas por que diabos devo trocar por retornos pequenos e enfrentar grandes riscos?
Como apenas porque 18000 Bank Nifty Weekly Call Option estão negociando a um preço barato de Rs. 10 não faz uma compra lucrativa se o mercado não tem como ir acima desse mercado dentro de alguns dias ou até o termo.
Há uma razão pela qual ele está negociando em Rs. 10 porque há menos chances de que o mercado atinja essa marca até o termo.
Então, seria melhor escrever a opção de chamada 18000 para receber o pequeno valor premium, pois há maior probabilidade de que o mercado não atinja essa marca até o término.
Então, se os lucros são pequenos ou grandes, deve ter certeza de que ajudará um comerciante a assumir grandes posições e a obter grandes ganhos seguros.
Para fazer um sucesso na negociação de opções, restrinja-se com a primeira pesquisa do movimento de preços do subjacente (BankNifty) para prever onde ele vai se dirigir dentro de seu tempo estipulado, então vá em busca e digite o contrato de opção certa com motivo justificado de por que você é comprando ou vendendo.
Além disso, quando você está negociando opções nítidas bancárias semanais, o valor do tempo se evaporará muito rápido após o fechamento de terça-feira.
Então, ao comprar opções, você precisa ser rápido, nítido e certo com sua análise sobre o movimento de preços que está esperando e saber em que intervalo de tempo e # 8230 ;.
Isto discutimos no final da publicação descrevendo os benefícios de escrever uma opção do que comprar opções.
Economize seu tempo e frustração. Tempo para ler sobre como começar com as opções de negociação & amp; banco nifty.
Como ganhar dinheiro com a negociação no mercado de ações indiano? & # 8211; Fizemos o melhor possível para mantê-lo detalhado e nítido, tudo que você sempre quis saber sobre Trading & amp; Investir no mercado de ações da Índia. Aqui estão oito passos a seguir para começar a ganhar dinheiro com a negociação.
Parte VII e # 8211; Começando com o Trading & # 8211; Como trocar opções? & # 8211; Quer ser um comerciante de opções em tempo integral, mas tem medo de todos os jargões e achar difícil entender a dinâmica das opções de negociação. Então você precisa ler isso.
Parte I & # 8211; Começando com Opções de Negociação & # 8211; Como funciona um comércio de opções? & # 8211; Entrar em Real Trading é complicado. Como um novo comerciante, é importante tornar sua tarefa comercial mais simples. Se aprofundar em entender como funcionam as opções comerciais no mercado real.
Por que mais margem é necessária para opções de curto / gravação do que opções de compra? & # 8211; Perguntando por que você é convidado a colocar mais dinheiro quando você está escrevendo opções do que quando compra? Tem algo para lidar com o risco do comércio. Mas isso não reduz a probabilidade de tornar o dinheiro inteligente curto das opções do que comprar. Time to Think & # 8230; & # 8230;
O que é o índice BankNifty (CNX Bank Nifty Index) & amp; Como negociar BankNifty? & # 8211; É sempre importante entender o que deriva o movimento do subjacente especialmente quando você está lidando com opções e amp; isso também quando é um instrumento altamente volátil Bank Nifty & # 8211; então não há escape para ele. Pergunte a si mesmo como pode fazer grandes mercados de futuros ou mercados de opções em que você não conhece nada?
Como negociar Futuros Nivis Bancos? & # 8211; Já se perguntou quantos comerciantes fizeram sua carreira comercial apenas negociando com sucesso os futuros do banco? Aqui é exatamente como saber um mercado profundo e pré-planejamento lhe dará a espada para gerenciar seu risco sabiamente, seja seguro e continue rentável no mercado para sempre. Esses elementos ajudarão a transformá-lo de um Comerciante Aspirante em um Tradutor Legendário.
O preço do preço de opção de opções bancárias tem uma lacuna de 100 pontos dentro de cada contrato. Atualmente, o índice Bank Nifty é @ 17700, de modo que as chamadas e o preço de levantamento dos contratos semanais de 16000 a 19500 estão disponíveis para negociação com contratos sucessivos de 16100, 16200, 16300 e assim por diante.
Mas a liquidez só está disponível nos contratos que estão perto do preço subjacente, com 5% mais e menos, ou seja, de 17700 a 18500 para opções de chamadas e de 17700 a 17000 para opções de venda e também para o contrato da semana atual, em 23 de junho de 2018.
Tabela 2 e # 8211; Bank Nifty Weekly Options Chain.
Confira os preços em tempo real de todos os contratos disponíveis para negociação BankNifty Options @ NseIndia & # 8211; Cadeia de opções nítida do banco.
Por que as opções fora do dinheiro são os contratos mais ativos?
Se você verificar o gráfico eu, podemos esboçar que a chamada que está acima do preço de mercado atual (ou seja, fora das chamadas de dinheiro) está ativa com a maioria dos volumes negociados, ou seja, as opções de compra do preço de exercício 17800, 17900 e assim por diante são negociadas grande enquanto a chamada 18000 tem o maior volume comercializado para o dia com maior interesse aberto.
enquanto as opções de venda que estão abaixo do preço de mercado atual (ou seja, fora do dinheiro colocado) são ativas com a maioria dos volumes negociados, ou seja, as opções de venda do preço de exercício 17600, 17500 e assim por diante são negociadas grandes enquanto a opção de venda de 17000 é a maior parte negociada com maior interesse aberto.
Por que a opção de chamada ou colocação que não possui valor intrínseco, em vez disso, o preço do prémio é que o valor do tempo é negociado ativamente?
Isso ocorre porque muita escrita está acontecendo para a opção de chamada 18000 e a opção de venda 17000, ou seja, o mercado está esperando que o banco não se mova em qualquer lugar acima da marca de 18000 e abaixo de 17000 antes dessa sessão de caducidade.
& amp; se isso acontecer, os vendedores da opção de chamada 18000 e amp; A opção 17000 colocada manterá o prêmio completo de Rs. 42 e amp; Rs. 17 no bolso no prazo de validade, uma vez que ambas as opções se tornarão zero se o mercado expirar em qualquer lugar dentro da zona de 17000-18000.
Além disso, um comerciante deve manter um olho falcão em qualquer aumento no interesse aberto do contrato de opções que nos permite saber quais os níveis que os mercados consideram importantes como resistência e suporte.
Para verificar as opções mais robustas do banco. Visite as 20 melhores opções mais habilitadas do banco no NseIndia e escolha Nifty Bank Options. Isso o ajudará a conhecer os níveis mais importantes como suporte ou resistência no mercado.
Facilidade de negociação para compradores e Escritores com opções semanais do Bankly Weekly.
As opções semanais certamente ampliaram o escopo das oportunidades de negociação disponíveis para um comerciante do Bank Nifty.
Como agora, o comerciante pode assumir posições no contrato de opção semanal pagando menos prémio do que ele teve que pagar ao entrar nos contratos mensais.
Anteriormente, o escritor ou o comprador das opções enfrenta muitos problemas e precisa manter o alinhamento das suas posições comerciais, uma vez que houve grande diferença de tempo entre o prazo de validade dos contratos. Mas a introdução do banco nifty opções semanais mãos oportunidade para ganhar dinheiro para prever o mercado se move a acontecer nos próximos dias do que esperar o final do mês.
Da mesma forma, o vendedor das opções terá que prever o mercado por alguns dias para aproveitar a oportunidade escrevendo as opções semanais do banco nítidas.
Em geral, existem duas estratégias que um comerciante pode escolher: - Opções de compra e amp; Opções de venda.
A opção de compra pode envolver a compra de chamadas (quando se espera uma vantagem no Índice Nítido Bancário) ou a compra coloca (quando se espera uma queda no Índice Nítido Bancário). Enquanto, por outro lado, as opções de venda envolvem a venda de chamadas ou as opções de venda do Contrato Nítido do Banco.
É muito importante entender o que constitui o preço premium do contrato de opções.
Premium = valor intrínseco + valor de tempo.
O valor intrínseco é o que as opções são reais ou próprias. Em outras palavras, qual será o valor da opção se o contrato for expirado agora mesmo.
Digamos que o BankNifty está às 18000 e a chamada 17800 está sendo negociada em Rs. 250 então o valor intrínseco é Rs. 200, que é o valor da opção se expirar imediatamente. Então, o valor do tempo se tornará zero.
O preço das opções é feito nos fatores como Valor do subjacente, tempo de expiração, etc.
Então, o preço não leva em consideração a posição do mercado, suporte ou níveis de resistasnce que o mercado enfrenta, etc. Assim, o comerciante técnico está em vantagem porque eles têm essas outras espadas fundamentais para entender onde os mercados irão se dirigir para dentro de alguns dias.
Opções de compra.
Ao comprar uma opção, você pagará o preço premium, que inclui alguns extras como valor do tempo para decidir se deseja cumprir o contrato ou deixar seu direito expirar.
Um comerciante que compra uma opção call / put espera um movimento para cima / para baixo no Índice BankNifty mais do que o prémio que pagou e também dentro de um curto período de tempo antes ou pelo menos até o final do contato, pois o valor do tempo continua reduzindo com o tempo .
Por exemplo, quando o índice BankNifty está negociando em 17700, a opção de compra semanal do preço de exercício de 17800 é negociada em um preço premium de Rs. 100. A opção de chamada 17800 não tem valor intrínseco enquanto você paga Rs. 100 extra para obter o direito de comprar o BankNifty @ 17800.
Então, os Rs. 100 extra é o valor de tempo que você está pagando para obter o tempo para decidir se deseja cumprir seu direito de comprar o banco nifty @ 17800 ou deixar o seu direito expirar e sofrer uma perda máxima do prêmio pago.
Portanto, você espera que o banco se mantenha acima de 17900, ou seja, 17800 + 100 até o vencimento para lucrar com o comércio.
Suponha que, no prazo de validade, o índice do banco nítido suba para 18000, esta opção de opção de chamada 17800 valerá Rs. 200, pois o valor do tempo agora se tornará zero e você ganhará o lucro de Rs. 100 (200-100).
Mas e se o índice aumentar para apenas 17800, a opção de chamada valerá Rs. zero e você sofrerá uma perda do prêmio total que você pagou quando o banco era nítido negociando @ 17700.
Assim, mesmo depois que o índice do banco nifty subiu de 17700 para 17800, mas você não fez nenhum lucro porque você pagou o valor extra de Rs. 100 para o vendedor do contrato para estender o tempo para decidir se deseja cumprir o contato ou deixar seu direito expirar.
Opções de venda.
Quando você estiver vendendo uma opção você receberá o preço premium por dar ao comprador o direito de comprar a opção que inclui o valor do tempo que normalmente funciona a favor dos vendedores do contrato da opção.
Um comerciante que vende opções de compra / venda não significa que o movimento de queda / subida significativo seja muito superior ao nível do preço de exercício. Assim, os vendedores esperam que o mercado não vá acima do preço de exercício da opção de compra que ele vendeu e não vá abaixo do preço de exercício da opção de venda que ele vendeu.
Em geral, o vendedor do contrato de opção entra no mercado durante a terceira ou última semana da expiração mensal, mas agora é apenas a questão das cinco sessões de negociação e das negociações de maior probabilidade podem ser inseridas ao escrever as opções nos últimos 2-3 dias do prazo. contrato, enquanto o valor da maior parte do tempo evapora rapidamente durante esse período.
No exemplo acima, no dia de expiração, se o índice bancário aumentar para 18000, o vendedor terá que sofrer uma perda de Rs. 100.
Enquanto se o índice sobe para apenas 17800, a opção de chamada valerá Rs. zero e o vendedor terá o lucro do prêmio completo. Assim, mesmo depois que o índice bancário aumentou de 17700 a 17800, o vendedor está no lucro.
Assim, o comércio de opções envolve não apenas prever o movimento do preço esperado do subjacente, mas também acessar o período em que esse movimento de preços acontecerá, pois você estará pagando o valor do tempo ao comprar um contrato de opções.
Portanto, se você pode prever que o mercado se moverá grande em uma direção, então você pode comprar ou colocar e obter lucros, enquanto você espera que o mercado não vá acima ou abaixo de algum nível, então você pode vender esse contrato de opção e retome todos os prêmios, pois o valor do tempo funcionará a seu favor se o mercado não se movesse muito no prazo estipulado.
Agora, somos claros com as opções positivas e negativas de negociação. Voltemos ao contexto do Contrato de Opções Semanais Nítidas do Banco com o qual você pode detectar e conquistar mais oportunidades.
Como agora com as opções semanais, teremos que acessar e prever o que o mercado estará fazendo nos próximos dias para se beneficiar da oportunidade # 8230;
Benefícios do Trading Bank Nifty Weekly Options.
Existem vários benefícios para isso: -
Agora, os comerciantes que gostariam de assumir posições no Bank Nifty podem fazê-lo comprando chamadas ou colocando a um preço menor que o que estava disponível com as opções mensais.
& # 8211; Isso ajudará a reduzir uma grande ambigüidade com a redução do intervalo de tempo para expirar. Tal como acontece com as opções mensais, era necessário fazer um alinhamento das posições no mês. Como é mais conveniente e possível prever os movimentos para 5 dias de negociação do que mais de 20 dias de negociação.
& # 8211; Como a maioria dos grandes comerciantes usa opções para escrever e empobrecer o valor da decadência do tempo. Então, esses semanários os ajudarão a ter um melhor controle sobre seus negócios, já que eles têm que prever o mercado por 5 dias de negociação e não mais do que acontecerão nos próximos 20 dias.
# 3. A oportunidade de negociar de acordo com o mercado se move 4 vezes por mês.
Agora, as oportunidades de decadência do tempo estarão disponíveis 4 vezes em um mês, em comparação com uma vez por mês. Os comerciantes ficam ativos durante os últimos dias da expiração para escrever chamadas OTM e colocar opções. Então, agora eles podem fazer isso negociando todas as semanas.
# 4. Troque importantes eventos com menos riscos.
Weeklies ajudará os comerciantes a assumir posições para grandes eventos, como a política de RBI, Brexit, Election Results e também com muito menos risco.
& # 8211; Negociar nesses dias exige que você tome posições em ambas as direções do mercado, pois esperamos um impulso, mas não tem certeza da direção. Então, chamadas e colocações que estarão disponíveis a um custo muito barato podem ser compradas para aproveitar a volatilidade.
& # 8211; Hedging para esses eventos & # 8211; Weeklies podem ser especificamente utilizados para proteger seu portfólio para qualquer correção imparcial por curto prazo. Como o que aconteceu no dia do brexit. Bank Nifty caiu de 18000 para 17000 e retornou para seguir sua atual tendência ascendente. Assim, a cobertura de portfólio pode ser feita comprando itens semanais a baixo custo.
& # 8211; Antes da introdução de opções semanais, se quisermos proteger uma posição por risco de evento, como uma Brexit ou RBI Policy ou Dados de inflação, fomos obrigados a usar as opções mensais e pagar um prêmio pelos dias restantes para o vencimento por isso opção. Agora, é muito mais fácil e mais barato lidar com cobertura para risco de eventos usando opções semanais.
# 5. Oportunidade para pequenos comerciantes.
Assim como a negociação de um evento, os pequenos comerciantes podem negociar esses semanais para proteger suas carteiras, escreva opções de Out Of The Money (OTM) para tirar proveito do tempo de deterioração, o que era difícil de fazer com as opções mensais de alto custo.
As opções de opção semanais são coberturas excelentes e baratas para cobrir outras posições de participações de longo prazo, enquanto as opções de chamadas semanais são ótimas para trabalhar como Chamada Coberta para escrever apostas de alta probabilidade.
# 6. Distribuição reduzida entre lance e amp; Peça preços.
Isso ajudará a aumentar a participação de todos os comerciantes de variedades, de modo que haverá menos diferença entre os preços de oferta e de venda. Portanto, uma entrada ou saída rápida pode ser feita sem se preocupar.
# 7. Comissões aumentadas e amp; Renda para troca, corretores.
E sim, o aumento da participação na participação levará a mais rendimentos para trocas e corretores.
# 8. Mantenha sincronizado com mercados desenvolvidos.
Em outras nações desenvolvidas, as opções semanais estão disponíveis para negociação no índice, bem como ações para ajudar os comerciantes a se protegerem e assumir posições curtas de acordo com as condições do mercado. Além disso, além dos semanários, há opções de longo prazo no índice e as ações também estão disponíveis para negociação para assumir posições de grande horário, pagando o custo da perda.
Felizmente, vamos ver mais semanários em estoques e outros índices. Comece com nossos sapatos e prepare-se para conceber idéias, estratégias para ganhar dinheiro com esses semanários.
Como negociar as opções semanais do banco nítidas?
O preço das opções é impulsionado principalmente pela movimentação de preços do subjacente que, neste caso, é o índice bancário nítido. Então, para julgar onde as opções se dirigem para ele, é importante dar uma devida consideração para onde o Índice Nipty do Banco se moverá.
Portanto, a primeira coisa e acima de tudo que nós, comerciante de opções bancárias, é fazer e analisar e prever o que pode acontecer no índice bancário para os próximos dias.
Há outra maneira de ver isso. Esperando o que o Índice Nítido do Banco não fará nos próximos dias?
Muitos comerciantes não se sentem confiantes nos futuros do banco negociador, mesmo depois de fazerem um ótimo trabalho de pesquisa, mas são bons em avaliar depois de determinada ação de preço do mercado quais os níveis que os mercados não esperam se mover acima ou abaixo.
O mercado de opções ajuda-os a lidar com esse problema e servem como uma ótima ferramenta para obter lucros consistentes usando estratégias multidimensionais em um movimento de mercado lateral.
Se você estiver escrevendo opções semanais bancárias antes do prazo de validade, você precisa avaliar o que o mercado deverá fazer no próximo dia, quais níveis são importantes como suporte e resistência, que o mercado não pode quebrar mesmo no caso de haver algum nível alto movimento de preço de impulso.
Isso pode não exigir muito para prever o quantum e o tempo do movimento, em vez de estimar o que o mercado não pode fazer até a quinta-feira.
Como esboçamos, o prémio de opção tem o valor intrínseco e de tempo ao todo tempo. Então, o preço não leva em consideração o quanto o mercado já reagiu? onde são os principais apoios e resistências que o mercado pode se referir no próximo momento?
Um chartist tem uma vantagem para obter o benefício dessa oportunidade subjacente.
Diga se um comerciante pode entender a posição do mercado e conclui que o mercado se reuniu em grande e agora está sentado em uma grande resistência de 18000, que exige que a consolidação aconteça em uma grande banda para decidir se ir mais longe ou começar a corrigir, então eles podem venda a opção de compra do preço de exercício acima da marca de 18000, uma vez que expirará sem valor se o mercado não puder ir acima dela.
Esta ilustração parece ser tão fácil de trocar. Mas muitos de vocês podem estar abusando de quem diabos vai nos dizer que o mercado enfrentará a resistência @ 18000?
Então, depende totalmente do que você é bom ao chamar o mercado?
Você consegue concluir que os mercados vão gastar tempo antes de subir ou descer ou os mercados vão estar explodindo ou encalhando mais baixo?
Cada tipo de evidência final irá ajudá-lo a decidir qual estratégia escolher para tirar o máximo proveito.
Mas, como agora, os volumes de negociação de opções estão aumentando várias vezes desde os últimos anos e a maioria desses contratos de opções (pelo menos 70%) expiram sem valor.
Então, quem diabos está ganhando dinheiro se estamos comprando opções o tempo todo para assumir menos riscos e acaba com opções inúteis?
Escrever uma opção coloca você em uma ótima vantagem à medida que o valor da decadência do tempo funciona em seu favor. ou seja, o prémio começa a derreter com a degradação do tempo.
Na verdade, existem muitas maneiras diferentes de trocar essas Opções Semanais Nítidas do Banco, mas neste artigo discutiremos mais sobre como cancelar as opções semanais próximas ou no prazo de validade para ter um fluxo de renda regular e consistente e fazer com que este tempo se desintegra como sua espada na guerra.
Escrita / Shorting Bank Nifty Weekly Options.
Opções de redação requer margem total para negociar como no caso da negociação de futuros. Os comerciantes geralmente pesquisam o movimento do preço do índice nítido do banco e apresentam os principais níveis que eles esperam que o mercado não quebre até o termo do contrato.
Como o preço não considera a posição do mercado, sim depende do preço do subjacente, da volatilidade e do tempo de expiração.
Chart readers are always at advantage as they can see other important aspects that is not considered while evaluating the pricing of the premium.
Traders by analyzing the charts can make up that market within few days may not break the major resistance or support areas. So, they may know that the market find sellers coming in from the top again or buyers from the bottom. Traders can evaluate and understand the major trend of the market and can take positions accordingly. Say if the trend is up then there are higher probabilities that market after correcting will start moving again with the current trend and buying of calls can be done or selling of puts which are below the support levels. Market spends time for consolidation after big fast up or down moves which serve as an advantage of writing options to profit out from the time value decay. We may need not be right with the direction of the price move. Some traders are good at analyzing the big picture and can evaluate that the market may not break some support level, resistance level or will go lower before going up, etc.
As the time value evaporates very fast in the last two days for the weekly contract so a big line of trading positions are initiated in the weekly options market late Tuesday or during the trading hours on Wednesday with an expectations of where the market can most rise or fall till the expiry day i. e. Thursday.
So, our task starts by analyzing the big picture and price performance of Bank Nifty Index till Tuesday to predict what can happen on Wednesday and Thursday (the expiry day).
If we can make up that market will not rise or fall below some major levels then we can start writing the options to take the benefit of the time value decay.
Gráfico 1 e # 8211; Bank Nifty Weekly Expiry Chart (5 Minutes)
In the chart 1 above (for the month of May & June 2018), all the blue lines represent the Weekly expiry days while the dotted pink line represents the place where market closed on Tuesday of every week i. e. 2 days before the expiry.
For example, the very last blue line represents the weekly expiry of June 16th, 2018 while the pink line before it represents the closing position of the market on Tuesday i. e. June 14th, 2018.
Choosing a right option contract is very important specially when writing the options.
Always go with the charts and try to write the call or put option which is far away from the current market price but has strike price close to some important top or bottom. This will generate a very small profit but will put the probability of working right in your favor.
So, the task here is to analyse the big picture of the market till Tuesday or early Wednesday to forecast where the market can go maximum up or down till it expires on Thursday. Therefore, we need to anchor the major support and resistance levels of the bank nifty index which will serve as an anchor for us to trade in the coming two days till expiry.
Say on 14th June, 2018 (Wednesday) we can see that the market has a strong resistance at or above 18000 which again serve as a sellers place.
So, we can plan to short the 18000 call on Wednesday but as the market kept on going positive since opening and also closed bullish to reach to 17900 levels.
This requires us to trade with conservative thought and will give us another anchor point to consider as support which now is 17500.
Gráfico 2 e # 8211; Bank Nifty June Weekly Chart ( 5 Minutes)
Now, we can analyse the market position early on the day of the expiry to conclude maximum it can move up and down with in the day.
As on day of expiry, the market had a big fall within the first few hours of the trading day. But as we analysed that the market was coming to a major support level of 17500 where it had a big consolidation and went up earlier.
So, here we can write the 17500 put options as this level will act as a major support for the market to consolidate or reverse for the upside.
Also, This fall make the conclusion very clear here that the that now the market will not break the today`s high of 17800 or the ultimate top level of 17900. But we cannot write the call options after this crash.
So we have to wait for the market to rise up so that we can start writing the call options of 17800 or 17900 and digests in all the premiums with the time decay.
If market did not reached the levels till the closing time then these call options will expire worthless or in other words will become Zero.
If you see the chart 2, the market started to consolidate in a band after the rise which benefits the option writer.
To check this further in another situation, Lets take the market position as on 29th June, 2018 i. e. Wednesday as now only one day is left for the expiry of the June Contract.
Gráfico 3 e # 8211; Bank Nifty Weekly Chart June 2018 (15 Minutes)
There is no clear pattern forming up to conclude which levels can be act as anchored place to take stop losses as market in current phase is in strong intermediate up trend with no corrections.
From the chart above, we can see that the bank nifty has closed near 17700 mark on Wednesday and there are major resistance marks of 17900 & 18000 and support of 17400.
At 17900 mark, market has formed a double top which may again create a lot of problem for the market. Also, there is a major gap down from that level so even if market will reach that level it will just close the gap. This becomes our anchored top to write the call option of 17900 mark tomorrow i. e. on the day of expiry.
Table 3 – Bank Nifty Weekly June Contract Options Chain.
From the table above, the 17900 call option is trading at Rs. 14 which was trading for more than Rs. 20 today. So, tomorrow watching the market opening and few early trading time, we can analyse if market had less chances to go above it then one can write this call option to make small profit but which has higher chances and probability of success.
Also, if you see it is the only call option which has the highest positive change of open interest of 1,20,840 contracts which signifies that this is the option which has most of the interest of the market participant today and surely they are not buying it rather writing off to make Small But Higher Probability Profit.
17900 seems to be a better call option to write which we expect can become worthless with higher probabilities of success..
But as the markets current trend is up and momentum and volatility is huge so we may skip writing the call this expiry as the market can still continue the up trend and even opens gap up tomorrow.
As the volatility is huge so writing of options or carry any over night position specially when writing options in not suggestive as market map open with gaps the following days. So, under such cases, always wait till the day of expiry and trade as per the market move which happens in the early hours.
If we talk about the support of 17400 we cannot call it to be a major but still we can anchor it as a support for the market which can help us to write the put options below that level by checking the movement of the bank nifty tomorrow by the afternoon.
Also, the open interest is increasing in 17500,17600 put options by 1,54,050 and 1,26,600 contracts with highest open interest of more than 5.5 lac contracts in 17500 put option which depicts interest of market at these levels. This shows market is seeing them to also work as a major support so tomorrow market is also expecting that it may gap up and stay above 17500 or 17600 levels so they may also seem good to trade. if this happens, and market gap up and get moving up then the interest in 17700 put option will also increase.
Therefore, as there is big increase in open interest of 17500 & 17600 puts which shows market is seeing them to work as a major support tomorrow so there are chances that market may continue its current up trend further to go near 17900 pr 18000.
So, writing of calls seems a bit less attractive where if we go with the current trend of the market and high increasing open interest in puts of 17500 and 17600, the writing of puts or buying call seems to be a better choice on the expiry day tomorrow.
# 1. Whenever markets are not forming any clear bullish or bearish pattern and we are unable to find places to enter the market and place our stop losses so cannot buy options, then writing of options of strike price above or below the major anchored top or bottom is the only way for the trader to take the benefit of time decay on or before every weekly expiry.
# 2. Wait for the market move till Tuesday Close.
# 3. Anchor Major Resistance & Support Levels.
# 4. Analyse how far the market may go (in any direction) today even when there is high price momentum. If volatility is high and a trend is underway, wait to see the market movement in early hours on the day of expiry to take any positions.
# 5. Check which options has higher open interest and changes in the open interest to understand which market is seeing as major support or resistance near your anchored top or bottom. If even after reaching resistance market starts to show increase in open interest in puts expect market to keep going with current up trend. So skipping writing calls is what makes sense with buying calls or writing puts will put us under great chances of success.
# 6. Write the option above or below the major levels as and when market moves towards it but when it is still far off from major levels.
# 7. As options pricing do not consider these technical aspects of markets, so the right analysis becomes a sword for the trader to make great trades with higher chances of success.
The major drawback of this strategy is that it did not give us place to put up stop losses as even after shorting the option, the premium can rise with the movement against but still not move above or below the strike price and later become Zero.
Thatswhy it makes sense to trade near the expiry days (i. e. on later Wednesday or Thursday) which can give you be clear with the moves and in-turn have higher chances of successful trades.
Trading Bank Nifty Weekly Options in the Last Hours on the Expiry Day.
There are another set of traders who just get active on the last 2 hours of the expiry day. Seeing the trading for the complete day they come to conclusion for the new levels which market will now anchor as resistances or supports. So during the last 120 minutes, levels which are 100-200 points away from the current market needs to be anchored on.
So, the idea again is here to conclude What the Bank Nifty Index will not do in the next 90-120 minutes?
i. e., knowing Which levels market will not break now.
Also, some times during the expiry day which will happen once or twice every month, market will be near the major resistance or support levels. Traders have a tendency to book the profits during the last hours of the trading day when the market has moved in one direction during the day. Also this reluctancy to carry position is strong when the markets have reached some major sellers or buyers level.
So, those levels becomes our anchor levels to write the call or put options above or below it to take the benefit of time decay. The premiums must be trading at very low levels of Rs. 10-25 but the success rate will be huge as time decay is very fast during the last few hours of expiry…
# 1. Wait for the market movement till 1-2 PM on the expiry day i. e., every Thursday.
# 2. Anchor Resistance & Support Levels 100-200 points away from the current market price.
# 3. Also, check if the market is near some major resistance top or support bottom. Market may not go above or below it just because traders are reluctant to enter new buy or sell positions at the end of the day to avoid carrying any overnight positions whenever the markets are near these major levels which may give surprises by tomorrow morning gap up or gap down.
# 4. Also, if the market has been swiftly moving in a single direction though out the day and reaching the major sellers or buyers area then traders who bought during the day starts to book profits before the close. So, this may push the market lower or higher and not breaking these major resistance or supports.
# 6. Write the option above or below these important levels as and when market moves towards it but when it is still far off from major levels.
# 7. Again, as options pricing do not consider these technical aspects of markets, so the right analysis becomes a sword for the trader to make great trades with higher chances of success.
An important point to remember here is that the options will expire as per the settlement price of the underlying which in our case is Bank Nifty Spot Index. Settlement price is calculated as the weighted average of the last 30 minutes i. e. from 3-3:30 PM. Do not confuse it with the last traded price. So if on any day the bank nifty index rises in the last half hour then surely settlement price will comes out somewhere in between the last half hour range.
The objective to detail out about options and writing strategy is to show you how big traders create a lot of positions by writing options according to the market conditions. This can also be justified with increasing open interest in calls and puts which shows big writing off these options. This is not the only way to trade options but there are other strategies that we may follow which with time will keep on sharing.
But Remember, Whenever markets are trending strong in one direction and volatility is there then you should surely avoid writing the options as this may increase the risk and go all against you.. Whenever the volatility is huge it is always better to buy options (Calls or Puts) then writing or selling options first.
So, be sure of why you are buying or writing the options. Don`t be in a hurry to trade similar on every expiry day and even as we say that Trading Everyday is a Silly Plan similarly Trading on Every Expiry is a Silly Plan too and more silly with similar plan every time.
Therefore, it is always important first to understand how volatile the market is and how higher the chances are that it will stuck in range and will not break the important supports or resistance levels. Because if the trend is strong and markets are drifting in one direction from last few days and you still follows the similar strategy of writing options to get few profit points you might get into trouble.
You should know that the when the markets are not trending, stuck in band during the expiry days and no trending pattern is getting completed to let the market run in fast momentum in very short time frame then you can make out the important support or resistance levels which market may not break with higher probability and write options.
But when the trend is strong or patterns for bullish or bearish moves are there then writing will surely not be fruitful or sometimes may out the trader into trouble when the market reverses and corrects fast.
Therefore, always first analyse and give complete importance to the understanding the what the bank nifty is expected to do in the next few hours to day to decide what is best strategy to adopt to trade bank nifty weekly otpions on or near expiry.
Just like buying options is always not the right strategy similarly writing options is always not the right strategy too.
Weekly bank nifty options contract has widened the scope of trading options as now options sellers can repeat the process to sell options 4 times in a month which will reduce the ambiguity of being restricted to trade monthly options which had big time frame of 20+ trading days to expiration.
But only when you trade right ..
and when you do not fall under the trap of trading options by buying the cheap far away options.
Ask yourself why some has so much of interest in these far away option which has high open interest?
Are they really buying it all because they are trading at cheap price?
And if they are buying with such great interest, then who the hell is selling to them and ends up pocketing all premium value of the worthless options on expiry?
To make money it is not always important to know what the markets will do.
.. rather by knowing what the market will not do can make decent money for you and that too with higher probabilities of success.
It`s like the living up with the angel and devil… The angel on one shoulder says you’r trading it the right way, one that will result in a great trade and change the way you see it. Meanwhile, the devil on the other shoulder calls you a moron, born fool for taking risk and avoiding the way to make unlimited profits.
These are not the only way to trade it…
There are many many other ways to trade in the market.. Do find one which is within your comfortable zone and keep stretching…
Make big profits and achieve Sensational RESULTS.
& amp; we will keep sharing with you some more awesome ways to do it during our journey together..
We have before us a great deal of opportunity to make monstrous and sensational fortune and feel the jaw dropping miracle. And the way is … para trocar opções. And more consistent when trading bank nifty weekly options. But Responsibility to use it wisely is what makes the miracle to continue.
So, next time you think you’re ready to click Enter , go back and weed out these important killers.
Your trading will be more powerful and your profits will surely soar … B ig.
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Day Trader Lost Rs. 18 Lakhs in 5 Minutes by investing Rs. 11250 (That too in a profitable trade) - April 23, 2017 Warning: 5 Traps To Avoid When Trading Bank Nifty Weekly Options on the Expiry Day - August 15, 2018 Why Trading Every Day is a Silly Plan (And What to Do Instead) - July 10, 2018.
27 thoughts on “ How to Turn Bank Nifty Weekly Options into a Regular Income-Driving Machine? & rdquo;
Nice post….Thank you.
@Amuthan.. Happy to hear that… Thanks for taking time to share your words.
Many many thanks for inspiring the New Comers.
Heartful thanks to you for sharing such words. Its really motivating for us to keep up the pace for sharing more great content. This really gives us a feeling of satisfaction for our effortful work. Thanks a lot and we are delighted that you liked our work.
Let`s work together and help the traders make a success.
I like what you write. Can you point me to any articles you have written on Technical Analysis/Derivatives Analysis/Chart Reading. In case you haven’t can you please point me to some really good resources?
Really good to hear that you like our post.
There are a lot of content available online but unsure of any crisp and clear on chart reading. As most of the content talk only about candlesticks and technical indicators.
We are working on writing content on chart reading and how traders can use chart reading to refine their trading further and get an edge just like professional traders.
Once we are done, we will send you an update on your email or whats-app.
Also, refer to the Recommended Trading Books that helped us in our trading.
REALLY NICE POST AND ENJOYED READING IT.
Could you please let us know if any such tool available which takes all required data from internet FOR A GIVEN (selected) UNDERLYING and can advise us to buy/sell any particular option for the selected underlying?
The automated software’s are generally used by big traders or institutions to take benefit of mis-pricing due to market volatility. That is the reason why markets reverses very fast after big up or down moves…
Any mis-pricing generates trading opportunities for arbitrage or less risk trades..
I don`t think there is any such free tool available online which can generate buy/sell triggers. But if you got any trading strategy for options then you can find ones by exporting the real-time price into excel and using formula`s to determine the right entry time…
I am also in process to write about some option trading strategies we keep a track of. The one we shared in this same article is the one we generally use to trade during or near the expiry.
There are some option software vendors in the market but we have not reviewed them till yet. Let me try contracting some and find which are worth buying. Once we do it we will review it here on the website.. You can also share the ones here, if u find some good one. we can review it here…
By the way, thanks for complimenting and we are also happy that you loved reading it..
Sir, please excuse me. I have a request. Above post has very confusing language. Some sentences are absolutely beyond comprehension. I do not wish to criticize. But simple, short, precise structure will help novices like me to appreciate your work.
Concrete problem. In many places above you have covered call and put actions together. In some places you have talked about call, put, buying and writing in a single breath. Even an experienced option trader cannot make a head or tail out of it.
Hope you do not take me wrongly.
Dear shri Madhav Ji.
I have tried keeping things in great details as possible.. To help all get the core of the thought.. Writing in short will ease my work but feels that won’t suffice (as you adviced as per the need of the newcomers)
Actually, we have shared all the links in between to other article which relates to basics of options, bank nifty futures, etc to help new comers to get the grip on options and bank nifty..
But yes, I understand you concern and whatever questions, or confusion you have related to this article you can post it here ..and I am here to reply and solve it. Any number of queries.
Feel free to share… Will be more than happy to discuss and learn new things from traders like you..
And that what we believe in – An open environment where our readers can ask us anything they wish to.
Waiting for your all questions… Even our other readers will be happy to know new sides and problems they can face while trading bank nifty weekly options..
very helpful article.
Thanks a lot for explaining options in an easily comprehensible manner. your posts have triggered my passion for options.
Looking forward to read more similar stuff.
OH My God! I am amazed reading your thoughts.. Didn`t expected such great response…. Thanks a lot Karthikeyan for such inspiring words.. Your comment has also triggered my passion to right more great stuff.
Sir, Great series of articles. Specially this one (Turn bank nifty …).
Do you have a write up on entry price ? As an example at one place I decide that 17900 call should be shorted @14 Rs. I would decide this on Tuesday evening. But when I fire my order on Wed, the volatility brings price down to 4 Rs within first 20 minutes of trading and then not sure if there is any juice left in it. As traders we never launch market orders. How to deal with this situation ?
I am really glad that you like the work.
At present, I havn`t written much on trading and entry system but i am planning to do so asap. In your example, yes the prices generally fall much faster within the last 1-2 days of the expiry due to time value decay but such fall from 14 to 4 might be of the case that the market has opened way lower than Tuesday close.
Always it better to place in limit orders when trading the options for such small price gap as many of them have big bid and ask price between them.
The only way to deal is by either enter on Tuesday evening or trade on Wednesday the option which is more close to the index value by evaluating well what the market is going to do till the expiry… What levels it will not break.. What tops or bottoms are important… and what the market is due for.. etc.
Can anybody can tell margin required for selling call or put bank nifty ?
Margin for shorting options is more or less similar to what is required to trade in bank nifty futures. At present it is approximately Rs. 60,000.
I want to know about options selling. Here i am putting some question so plz help me by solving these questions.
1. Suppose i short sell Bank Nifty 21000 call at 20 and that time spot price is 20850. If expiry day spot price is 20950 and premium is 0.05. So i am in loss or profit ?
2. Can i buy back my short position at 0.05.
3. What will happen if i forget to square off my short selling position in the expiry day.
4. Suppose i short sell 21000 call and i am in loss and i want to hold my position till the expiry. So is it possible and if yes so how ?
5. I short sell Bank Nifty 20800 call at 30 spot – 20720 and the expiry day Bank nifty close at 20900 and premium became 55. So am i in loss ? if yes so how much loss i have to bear.
I want to answer just five question and i hope you will give proper response.
Good to see you are finding answers to your queries. I have tried to share my thoughts on the questions in detail.. Hope it helps answer your queries rightly.
# 1. When you have shorted Bank Nifty 21000 call that means you are expecting market to expire below 21000 to pocket in the full premium amount of Rs. 20. And, the bank nifty index expired @ 20950 so the 21000 call will become worthless i. e. becomes zero.
So, as you have shorted it at Rs. 20 and it got expired at zero, you made a profit of Rs. 20 x 40 = 800.
# 2. Yes, you can buy your short position @ 0.05.
# 3. Even if you forget to buy back the shorted call option – You will still pocket in the full value of premium i. e. Rs. 20 as the call option has expired out of the money.
# 4. If you have sold short 21000 call and you wish to carry the option then you need to take care of M to M loss everyday as future and options are settled everyday.
Suppose, you shorted 21000 call option at premium of rs. 20 and at the end of the day the premium rises to Rs. 30 and there are few more days left to expiry and you are still in the position then the broker will debit your trading ledger with the M – M loss of Rs 400 (40 x 10). Also, if next day the premium went down and close to Rs. 25 from the last day close of Rs. 30 then the broker will credit the ledger with the profit of Rs. 200 (40 x 5).
Also, you will have to maintain the total margin requirement which these days will be approx. Rs. 60000.
# 5. If you have shorted the bank nifty 20800 call at Rs. 30 and on the expiry bank nifty index expires @ 20900 then the premium will become Rs. 100 and not Rs. 55.
So, you will have to bear a total loss of Rs. 70 x 40 = Rs. 2800.
I hope the answers have solved your queries. You can further read the below article to get equipped with the basics & advanced of the options market.
Further, if you have any more questions. do share here.. I will be more than happy to answer.
Thank you very much Sir. You are doing great job to help the begainer trader.
Thanks Rajat For your kind words…. We started this with the same thought of helping new traders to not commit mistakes that we even fall into during our early days.
Hope to continue the same in the future.
Its very great explanation on Bank Nifty Writing strategies , which i ever found in I have small query on margin required for writing options . Do we need that 60k fixed irrespective of call/put premium we are writing at ( for wg., 20,30,50/- ) ? or margin varies depends on premium value of underlying strike price , which we are selling ?
There is a slight margin difference between the different strike prices where the 60K might become 65K or 70K. So, atleast you will require 60000 these days to carry overnight position in options selling.
But if you are trading for intraday say writting on the day of the expiry, then you might be able to do one lot of short selling at 20k by getting intraday MIS exposure. which requires you to square your position 10-15 minutes before the market close.
Espero que esta ajuda. If you have any other query, do post it here. I will be more than happy to help.
I have been reading your insanely lengthy posts which are so detailed that i cannot but appreciate the efforts you have been putting in, in every article. Great effort.
I was reading this post and was wondering if it is possible to do weekly spreads on the nifty options ??
Do you have any articles on spreads..
Correção. I meant on The weekly Bank NIfty Options.
Till now I didn`t get into that concept… I generally trade options as an alternative to futures. Will try to pace up to learn further about options strategies…
Thanks a lot for your words… really good to hear that it helped you in some bits… You are reminding of the nights i took out to write those… Sleepless nights hahaha…
Warning: 5 Traps To Avoid When Trading Bank Nifty Weekly Options on the Expiry Day.
We all love trading options on the expiry day. Don`t we?
The excitement and love must have increased 400% now with the introduction of bank nifty weekly options.
which earlier was restricted to once every month by trading only monthly expiry contracts.
Bank Nifty weekly options has surely opened a gate to the options trader to make consistent profits, hedge their portfolio positions and take benefit of the major market driven events like results, RBI policies, economic events, etc at real low cost…
Some traders are addicted to buy options which are trading at lower prices on the expiry day with a thought of making big with less risk while others make up their trading plan to write the out of the money options and pocket in the full premium value.
This addiction has also increased multi folds when now traders can trade or write options to make money from trading bank nifty weekly options.
We have shared deep information in the article How to Turn Bank Nifty Weekly Options into a Regular Income-Driving Machine? on how traders specially those who are professionals use Bank Nifty weekly options to make sure money consistently on their capital by writing the options and putting the benefit of the time value decay in their favor. Also, how they use weekly bank nifty options to buy the markets instead of taking positions in the bank nifty futures..
Trading options gives a sword to the trader as you can not only make money when the markets are trending up or down but also when the market are moving sideways and stuck in consolidation band.
But most traders fell into the trap by engaging in options market in similar old fashioned thoughts and trading ideas.
by buying out of the money options with a thought that the loss is limited and opportunity to make big or unlimited profits are in their favor.
many who trades it on the expiry day, usually buys the cheap low prices options in big quantities by dreaming that the market will zoom up or fall big to turn their small risk trade into big turnaround profitable day.
and there are some who doubles up their position in the losing option by buying more at the lower price to average out and compromise on their risk management.
These mistakes are mostly incurred by new comers who enter the options market with the fascination of making big money by buying cheap low prices options and with lack of planning, and research.
But there are some mistakes or trap that most traders generally fall into due to lack of understanding of the mechanism and settlement of the options market and suffer big losses..
and one of the biggest trap is when they have what we call as a “Contract Shock”.
You might have read and heard million number of times that the risk with buying options is limited to the price of the premium paid. Certo?
É esse o caso?
If you fail to understand the technicalities behind the mechanism of options market then the rule of limited loss surely do not apply there.
Feeling Puzzled, Right?
Ok, so lets take a very simple case here.
Say if you have bought hundred lots or 4000 units (100 x 40) of bank nifty weekly 19000 call option on the day of expiry for Rs. 3 when bank nifty index is trading @ say 19000, And you knew that market will surely close above 19000 today anyhow…
then what will be the maximum loss you can have?
The answer must be a maximum loss of Rs. 12000 Right?
Recalculating… Oh yes we miss the brokerage and taxes, etc..
So, the new answer must be max approx Rs. 13,000. Certo?
Still not correct.
Sorry.. But I need to ask this too…
Tell me what happen if the bank nifty index rises and you are sure that the market will settle at a higher price and you know that difference between the close price of Bank Nifty Index and your call option strike price of 19000 will be your profit.
and as you expected … it did settled above 19000 say @ 19010.
You must be calculating the profit on the trade as 4000 x 7 (10-3) = Rs. 28000 .. Right?
But let me tell you when you will receive your contract note in the evening, you are going to get a “ Contract Shock” by seeing what happened…
Rs. 67,000 Net Loss on a Profitable Trade of Rs. 28000.
How you can incur such big loss even when you had a profitable trade and that too when you know that the loss is limited to the premium we pay when we buy options i. e. Rs. 4000 x 3 = Rs. 12000.
Curious to know how that can happen?
or must be feeling that it is all bullsh*t & rubbish….
But actually it is not…
Read the TRAP 1 & TRAP 2 to understand how we can get trapped by even letting our profitable trade in big losing one that too when we have read and convinced all through over that.
WHEN WE BUY OPTIONS – LOSS IS LIMITED TO THE PREMIUM PAID.
which is not completely true in all of the cases.
The rules or traps are generally similar for any equity stock or equity index futures & options but to keep it clear we have illustrated the same by taking the case of bank nifty weekly options as they are the one we will be trading 3 times more than any other option contract.
# TRAP 1. Not Selling In-The-Money Options Before Expiry.
To help you understand the concept well we have tried best to take all the possible cases and events in great detail. So, bear with us and open gates to the new learning…. And this trap generally has to do something with Taxes – STT.
STT or Securities Transaction Tax is levied on every purchase or sale of securities that are listed on the Indian stock exchanges. This include shares, derivatives or equity-oriented mutual funds units.
This was first introduced in 2004 by the Finance Minister P. Chidambaram to subside the tax loss when they turn long term capital gain tax as zero.
Some Important Points on STT :-
STT is applicable only on sell transactions for both futures and option contracts Each futures trade is valued at the actual traded price and option trade is valued at premium. On this value, the STT rate is applied to determine the STT liability In case of final exercise of an option contract, STT is levied on settlement price if the option contract is in the money In 2018 Budget, Finance Minister Arun Jaitley increased the STT on options by nearly three-fold to 0.05% from earlier rate of 0.017%
Below are the current STT rates that are charged on Futures & Options Trading in India.
STT in case of Bank Nifty Futures Trading.
When you trade Bank Nifty Futures, you are charged with STT of 0.01 percent on the total sell value of the contract.
Say, if you have bought one lot of Bank Nifty Futures Contact (July 28th Expiry) on July 22nd at 18650 and sell it in the market before or on the expiry day @ 19000 then a total STT of Rs. 76 will be charged on the sale value which is calculates as below.
= (19000 x 40) x 0.01 percent.
Selling Price x Lot Size x STT Rate.
Also, consider the case where you don`t sell the futures contract in the market till the expiry and let it settled at the settlement price of BankNifty Index value then the similar STT of Rs. 76 will be charged.
Say, if you have bought one lot of Bank Nifty Futures Contact (July 28th Expiry) on July 22nd at 18650 and don`t sell it in the market till the expiry day and let it settled at the settlement price of 18882.40 then a total STT of Rs. 75.5 (calculates as below) will be charged which is similar as the one charged when you squared the long position by selling it in the market.
= (18882.4 x 40) x 0.01 percent.
Bank Nifty Index Settlement Price x Lot Size x STT Rate.
But What if You have Short Bank Nifty Futures and let it square via settlement route through exchange?
If you are short bank nifty futures (sold first), then you have already paid STT and it doesn’t matter if you buy the futures contract through market trade or hold them till expiry and get it settled, as there is no STT on the buying side and no distinction of whether you square the position through market trade or settlement route.
As, there is no distinction whether the long or short bank nifty futures contract is squared through the market trade or settlement route at the settlement price there is no question of STT that will be charged in either case. As it remains same.
So, trader needs not to worry where he/she square his open futures position by self in the market or let it expire and get it settled via settlement route as STT will remain same.
But there is a difference between when such trade happens in options via market trade or exercised through exchange.
STT in Case of Bank Nifty Weekly Options Trading.
This generally answers to the question.
Why is it Important to Square-Off ITM (In The Money) Options rather let them Expire on the Expiry Day?
which we have explained later in the post.
STT on Bank Nifty Weekly Options Trades Done in the Market Vs STT on Exercised Bank Nifty Weekly Options Contract.
STT on Bank Nifty Weekly Options Trade Done in the Market.
STT on normal option trades done in the market is charged at 0.05% on the selling side of the premium value of the option irrespective of whether you buy first or sell first.
When you buy options first, then you do not pay the STT as it will charged on the selling premium value when you will square that open position by selling in the market.
Also if you have short/ write options first, then you have to pay the STT first and you will not be charged when you will square the position by buying the position back in the market trade.
Simply put, if you are doing both the side of the trade (Buy and sell or sell and buy) through the market trade, then STT of 0.05% on sell value will be charged.
Say, if you have bought one lot of Bank Nifty 19000 Weekly Call Option at Rs. 100 then you don`t have to pay the STT but when you sell it in market say @ Rs. 110 (before the market close on expiry day) then a STT of Rs. 2.20 (calculates as below) will be charged, which is very insignificant.
= (110 x 40) x 0.05 percent.
Selling Premium x Lot Size x STT Rate.
Similarly, if you have sold one lot of Bank Nifty 19000 Weekly Call Option at Rs. 100 then you pay STT of Rs. 2.00 (calculates as below) and when you will buyback this call options say @ Rs. 90 (before the expiry) then you need not to pay any STT as you have already paid when you sold it short.
= (100 x 40) x 0.05 percent.
Selling Premium x Lot Size x STT Rate.
Similar case is applied when you bought or write put option and square the open position in the market before the close of the market on the expiry day. Then STT of standard 0.05% will be charged on the selling value of the premium.
But what will happen when you will let your option contract expire and let it settle via settlement route?
Or in other words, when you do not not square your buy or short position till the close of the market on the day of expiry of the options contract?
STT on Bank Nifty Weekly Options Contracts Settled / Exercised / Expired.
This will help answer some of the questions which many of our visitors generally ask us.
Is it compulsory to Sell Options (Either Call or Put) in the market before the expiry of the contract?
If I bought an options contract and on expiry it is trading at Rs. 0.05? Should I sell it in the market or let this option exercise? If yes, what are the charges and STT that will be levied?
What will happen if the option that I shorted on expiry day rises but bank nifty index closes below my strike price? Whether I will be in profit or loss?
If I don`t sell my ITM call option on expiry, how much STT will be charged?
Let`s dig in deep to get the answers for all these questions.
If You Buy Option and it Expires In-The-Money?
The problem comes only in the case of options that you have purchased, are in the money on the expiry and you do not square the open position in the market and let it expire and get it settle through settlement route.
Whenever you let your buy positions in the options expire In-The-Money till the close of the markets on the expiry day, then STT rate will increase from 0.05% to 0.125% and it will now be charged on the total value of the contract and not on the premium value.
i. e. STT of 0.125% of the contract value* will be charged if you buy and keep holding it till the close of markets on the expiry day (in case of In The Money options).
where, * Contract Value (Call / Put Option) = (Strike Price+Option Premium) x Lot Size.
Suppose, you have bought one lot of Bank Nifty 19000 Weekly Call Option at Rs. 100, market rises to and settle at 19100 i. e. the call option becomes In-The-Money and you let it expire and did not square your open position i. e. you didn`t sell it in the market and let it expire till the close of the market on the expiry day then it is considered to be as exercised .
As when you bought the call option you don`t have to pay the STT but as this time you didn`t sold the option contact in the market and you let it expire in the money and now it is exercised then a total STT of Rs. 955 (calculated as below) will be charged, which is very much bigger than the earlier insignificant value of STT of Rs. 2 that you would have paid if you sold the options in the market instead of letting it exercised / expired.
STT = (19000+100) x 40 x 0.125 percent.
(Strike Price + Premium) x Lot Size x STT Rate.
Therefore, this additional STT is charged when you are the buyer of an option (call or put) and it is expiring in the money and you have not squared it off before market closing on expiry day. In such a case the option gets exercised and you are charged STT at a higher rate.
So, it is always advisable to sell the open in the money options in the market rather than letting them expire.
Similar applies in case of Put Option.
If you have bought one lot of Bank Nifty 19000 Weekly Put Option at Rs. 100, market falls and settle on expiry @ 18900 i. e. the put option becomes In-The-Money and you let it expire and did not square your open position i. e. you didn`t sell it in the market and let it expire till the close of the market on the expiry day then it considered to be as exercised .
As when you bought the put option you don`t have to pay the STT but as this time you didn`t sold the put option in the market and let it expire and now it is exercised then a total STT of Rs. 950 (calculates as below) will be charged, which is very way bigger than the earlier insignificant value of STT of Rs. 2 which you would have paid if you sold the options in the market instead of letting it exercised / expired.
= (18900+100) x 40 x 0.125 percent.
(Strike Price + Premium Value) x Lot Size x STT Rate.
So, If the buy options (Call or put) has any value in it or market is settling above in case of call or below in case of put option and you let it expire till the close of the market on the expiry day, then STT will go up from 0.05% to 0.125% and it will be charged on the total contract value and not on the premium value.
So, When Options are Considered to be Exercised?
Options are considered exercised if you hold buy positions in options till close of the market on expiry day (i. e. till 3.30 PM on every Thursday) and with them having some intrinsic value or being ITM (in the money) i. e. where settlement price of Bank Nifty Index is more than strike price of the option in case of call option or where settlement price of Bank Nifty Index is less than strike price of the option in case of cput option.
Additional STT of 0.125% (instead of 0.05%) is charged when you are the buyer of an in-the-money option and have not squared it off before market closing on the expiry day. In such a case the option gets exercised and you get charged STT at a higher rate.
But What if You Buy Option and it Expires Out of the Money?
If the buy options has no value in it till the close of the market on the expiry day i. e. it gets expired worthless then no STT is applicable.
Suppose, you have bought one lot of Bank Nifty 19000 Weekly Call Option at Rs. 100, and bank nifty index expires below 19000 i. e. the call option becomes Out-Of-The-Money. Then the value of the 19000 call option will surely be zero. Then you need not to sell in the market as there is no STT on the Out-Of-The-Money options.
As when you bought the call option you don`t have to pay the STT but as this time the market expired below the call option strike price, so no STT will be charged.
Similar can be applied in case of put option.
Suppose, you have bought one lot of Bank Nifty 19000 Put Weekly Option at Rs. 100, and bank nifty index expires above 19000 i. e. the put option becomes Out-Of-The-Money. Then the value of the 19000 put option will surely be zero. Then you need not to sell it in the market as there is no STT on the Out-Of-The-Money options.
As when you bought the put option you don`t have to pay the STT but as this time the market expired above the put option strike price, so no STT will be charged.
Important note here is that it is considered In-The-Money or Out-Of-The-Money depending on where the Bank Nifty Index settle and not Futures Contract.
So, if the Bank Nifty Index expires below the call option strike price then it it considered to be Out-Of-The-Money while if the Bank Nifty expires above the put option strike price then it is considered to be Out-Of-The-Money.
What if You Write Options and let it Expire?
If you are short/written options (sold first), you have already paid STT and it doesn’t matter if you buy the options in the market or hold them till the closing on the day of expiry, as there is no STT on the buying side.
If you write option @ Rs. 100 and at the expiry day it’s value stands @ 50 and you let this ITM option expire. How much STT will be charged?
As we are writing options (i. e selling first) we would have already paid the STT (@0.05% of the premium). So, in both the cases whether we buy from the market or we let it expire, we don’t have to pay any STT at all, i. e STT would be zero since we have already paid STT when you had shorted the options contract.
An important point to consider here is that settlement price is weighted average of last 30 minutes. So, make sure you know whether it is beneficial to square by buying or selling in the market or through exchange.
If it seems confusing, then only remember that higher STT of 0.125% instead of 0.05% will be charged only in case of options :-
& # 8211; If you have bought options, they are expiring in the money and you are not selling it in the market rather letting it expire though settlement route.
Therefore, if you have bought options and they are expiring worthless (With value 0) or are expiring out of the money then you don’t have to sell it to save STT because STT on options which has no value is zero.
Also, if you have sold short or write options, then you need not to worry for the STT as you have already paid it at the usual rate of 0.05%. So, it makes no difference whether you square the short position by buying them back from the market trade or let it expire at the settlement price.
So, the only problem comes when you have bought options, they are expiring in the money and you are letting it expire/exercised via settlement route. So, It is advisable to sell it in the market than let it expire/exercised.
The question which must be coming to your mind is why on the Expiry of Contract, STT charges are different for options?
Why is the rate of STT for a buy exercised option is so high 0.125% compared to 0.05%?
Theoretically, the buyer of the option (whether Index or Stock) gets the right to buy or sell certain quantity of underlying at the specified price by paying a premium price. It means that if the option position which has some intrinsic value in it if is not squared rather the buyer of options let the contract expire at the settlement price means he is ready to buy or sell the underlying @ that particular strike price. Because the option contract has still some value in it which requires the buyer to take the benefit by selling the contract in the market and if not then he is ready to to buy or sell the underlying.
So at the expiry, if you are not exercising the In-The-Money options contract it is assumed you will take or give delivery of the underlying which in our case if Bank Nifty.
Thatswhy only In-The-Money are settled at the expiry settlement price which requires higher STT to be paid while Out-The-Money which are worthless for the buyer of the option is left untouched and does not require any STT to be paid.
So, the buyer of the option who has exercised the contract means that he has exercised his right to take delivery of the underlying if he has bought a call option or ready to give the delivery of the underlying in case he has bought the put option.
As in India all the derivatives (future or options contract) are cash settled and there is no actual exchange of delivery. But since theoretically this accounts to an option buyer asking/giving delivery of the underlying the STT is now considered as per delivery based trade which is 0.125% of the entire value of the contract and not just the premium value.
This is also the reason why income from Future & Options is considered as Non Speculative Business Income.
Many traders generally get fooled and fall into the trap by buying the options trading at less than their theoretical values before the close of the market on the day of expiry. But this trap generally let them with no wonders so it is really important to understand the reason for it so that you do not fall into this another trap.
# TRAP 2. Buying Options which are Trading at Less Price than the Actual T heoretical Value on the Expiry Day.
Now we are clear with why, how and when STT is charged and burdened on the shoulders of the traders who fall into the trap because of not clear guidance and awareness. For many, it must be a nightmare when they get a Contract Shock and feels to be like a really expensive learning.
Now another important to ask.
Why do options trade at lesser than theoretical value on the expiry day?
There are generally two reasons why some of the options which are close to the current traded price starts trading at different price than the theoretical values on the day of expiry: –
2. Settlement Price.
Gráfico 1 e # 8211; Bank Nifty Index Intraday Chart (Aug 4th, 2018)
Let`s take the case of August 04th, 2018 expiry from the chart 1, where Bank Nifty Index rallied from 18450 to 18638 in the last hour of the trade.
Question 1 – Then why did the Bank Nifty Index get settled @ 18571.70?
Question 2 – Also, why did 18500 & 18600 calls traded and settled at different prices than the theoretical prices before the close of the market on the day of the expiry?
Below are the details for the Bank Nifty 18500 & 18600 Weekly Call Options that expired on Aug 4th, 2018.
Table 1 – Bank Nifty Weekly 18600 Call Option (Weekly Expiry of Aug 4th, 2018)
Table 2 – Bank Nifty Weekly 18500 Call Option (Weekly Expiry of Aug 4th, 2018)
From the above, we can see that the bank nifty 18500 call option traded at the last price of Rs. 70.
The reason behind such a discrepancy between the theoretical and real traded prices of both of this call option is due to the settlement mechanism of underlying where market settles at different price than the last traded price and discounting the value of the STT.
First, as settlement price or closing price is the weighted average of last 30 minutes on any trading day. So, if market has rallied in the last say 20-30 minutes then the average weighted price will come lower than the last traded price where as if the market has fallen in the last say 20-30 minutes then the average weighted price will come higher than the last traded price.
Therefore, it should not be of any surprise where if Bank Nifty rallied from 18540 to 18638 from 15:00 to 15:30 and still 19500 call option must be trading at very lower prices of say Rs. 70 which as per the theoretical value should be trading around 138 on the expiry. This is due to the fact that the settlement price will comes around somewhere between 18540 & 18638 and market is also accounting the value of STT to be paid by the buyer of the In-The-Money options contract if they do not sell their open positions in the market.
Because if the buyer of the 18500 call will let the contract expire and get it settled through the settlement route will incur the STT cost of approx Rs. 930 which comes out to be 23 points for 1 lot size of 40 units.
Also, as all the option contract are cash settled at the settlement price of the underlying which in our case is Bank Nifty Index where settlement price is the weighted average of the last 30 minutes. It is important to not get confused the last traded price with the settlement price.
Also, when the Bank Nifty traded @ 18638 at 15:30, then the 18600 call option should be trading at theoretical value of Rs. 38 but as the average will come somewhere in between 18540 & 18638 and market is also discounting the STT value that is why it was trading at Rs. 0.10. So, this 18600 which seems to be in the money will settle at out of the money i. e. why it was trading at Rs. 0.10.
Therefore, If you see options which seem to be cheap (trading lesser than theoretical value) during the last half hour of the trade on expiry day, do consider the fact that the market is discounting that the settlement price will be different than the current traded price (if bank nifty has rallied or fall in last 30 minutes on expiry) and also because of the higher STT rate that which will be charged if you do not square your position in the market but rather will let your In-The-Money options expire and get it settled via settlement route.
Therefore, during the last 30 minutes of the trade, the 18500 call must not be trading around its actual theoretical value of trading at Rs. 100+ and did not closed at its theoretical value of Rs. 138 (18,638 – 18,500) is first because of the fact that Bank nifty index has rallied in the last 30 minutes and the weighted average price will settle much lower than the current market price and second because of the higher cost of STT that will be charged if we do not sell the contract in the market and let it expire and settle via settlement route.
Another important to consider is that if on the expiry day, bank nifty index falls in the last 30 minutes then the weighted average price will come higher than the prevailing market price so traders are require to account the higher settlement price and deduct the STT cost to understand which options will be In-The-Money and which will be Out-The-Money.
I will try to share some real time examples on the expiry days later in the coming days. Till then observe these on the expiry days and trade accordingly.
Now, as we are clear with how this works, now lets come to the example which took earlier in the beginning of the post.
So, if you have bought hundred lots or 4000 units (100 x 40) of bank nifty weekly 19000 call option on the day of expiry for Rs. 3 when bank nifty index is trading @ say 19000 and market settles @ 19010.
Then the total profit from the trade will be 4000 (19010-1900) – 3 = Rs. 28000.
Because during the last half hour of trading, when market was trading at marginally higher than 19000 levels then the call option of 19000 must be trading at a value close to zero only because of the cost of STT which needs to be accounted. So, the call we bought at Rs. 3 cant be sold at profit even if the bank nifty index is above 19000 levels. Therefore, we are forced to let this expire and settle via the settlement route at the weighted average price of the bank nifty index on the expiry.
As the bank nifty index as in our example settles @ 19010 i. e. our 19000 call has expired In-The-Money where we will be charged with the STT tax of 0.125% on the total contract value which is as:-
19000 x 4000 x 0.125%
So , net loss from the transaction will be Rs. 67000 (95000-28000)
But an important point here is that as the market on the day of expiry will already consider the cost of STT in the pricing of all the in the money options specially which are away from the current market price. So, even the market is at 19330 and you buy 19200 call at 114. Then as per the market price the 19200 must be trading at Rs. 130 so it is including some Rs. 16 for the STT cost. But if you calculate the real cost which will be incurred it will be Rs. 965 i. e. 24.5 points. So, you will incur a loss of 8.5 points if you buy 19200 call at 114 and let it expire say @ 19330.
It will not be the complete loss of STT but remaining which the market has not discounted in the price of options.
So, how does this work?
Generally as you will witness that the options which are already in the money i. e. say those which are atleast 100 points away from the current Bank Nifty index price would have already discounted the STT cost as the traders get a feel that there is higher probability that this call option will expire In-The-Money. So, you will see them trading at the price lower than the theoretical price.
While, the call options which are say 30/40/50 points away or those which are At-The-Money very close to the current index level will still be trading at a higher premium price with full intrinsic and some time value in them as no one is sure that the current options will expire In-The-Money.
For Example say at 2 P. M., the current bank nifty index level is at 19320 then the 19200 call will be trading @ say Rs. 100 (below its intrinsic value) as there are more chances that it will expire In-The-Money so it is discounting the STT cost and some time value in it where as the 19300 must be trading at Rs. 25 because no one is sure whether this will expire In-The-Money or not as it is very close to the current market price and still has 90 minutes to go.
Rest below mentioned are not traps rather mistakes that an option trader generally incur due to lack of understanding of the mechanism on which options trading and settlement is based on :-
# TRAP 3. Waiting too Long to Buyback the Short Options.
This is one of the biggest mistake most options trader fall into – they don`t buy back their short options rather keep waiting for the market to get close or waiting for the last bits of points by thinking they will buy @ Rs. 0.05.
They traded right by writing the options which may expire out of the money (worthless) but fall into the trap by thinking why to incur additional transaction cost when the options are going to expire worthless and settle as per the settlement price.
Some of them even fall into the trap looking for last few bits of points by not buying it back even at Rs. 0.50 or Rs. 1 and saying I will buy only at the last price of Rs. 0.05.
It is important to understand and follow one piece of advice: Always be ready and willing to buy back short options early. Don’t wait for it to become Rs. 0.05.
This is because we have seen a number of times market reversing big in the last hour of the trade. You might have short some options with the thought that they will expire worthless today and till 14:30 or 15:00 you might be at a good profit and you short option must be trading at very low price of say Rs. 2 or Rs. 5. for which you felt confident that the market will expire below you call option strike price and you will be pocket in all the premium value of the call option.
But suddenly market reverses and starts moving up and kept on going for some 200-300 points within the last hour of the trade which forces your profitable trade to turn up into a losing one. Just because you strive for the last few bits of points.
This is specifically for those who trade and write big quantities of options with a thought that the short options will expire out of the money or worthless.
So do not fall into the trap by looking for last few bit of points. Rather square you position and sit calm and relax.
# TRAP 4. Buying Deep In-The-Money Options.
Buying far away options can put a trader into trouble as he may find it difficult to exit due to less liquidity. So, if the market is far away from the the options you bought, you may get stuck up with position as it may happen you may not get the buyers to sell you open position which may lead you to incur huge STT tax.
In the above case, where bank nifty index was trading between 18450-18550 levels and you purchased 18300 call option at the price of Rs. 200. Bank Nifty index rises to 18638 levels and your call option of strike price 18300 will be worth more than Rs. 300. But what if there are no buyers available for the 18300 call option?
Table 3 – Bank Nifty Weekly 18300 Call Option (Weekly Expiry of Aug 4th, 2018)
From the above table, you can see that the 18300 call option has traded with only 722 contracts on the expiry day, even when bank nifty was trading near 18450-18550. This is because most of the traders felt that the market will not touch 18300 mark so had lack of interest from the participants. Similarly, the contract of 18200 and 18100 will also have less liquidity.
It may happen that there may be no buyers of this 18300 call option during the close of the market on the expiry day or there must be big gap between the bid and ask prices which may force you to not sell the option in the market.
Then you cannot square your long 18200 Call option in the market but will be forced to let it expire and settle via settlement route as per the levels of bank nifty index on the expiry. This may force you to incur huge STT cost as this call option is In-The-Money and will be considered as a delivery trade. Such huge STT tax will not be there if you would have been able to sell it in the market.
The reason behind lack of liquidity is these deep in the money options has huge premium price in it which requires a lot of capital to be stuck up in carrying the position. As similar results can be obtained by trading in the near In-The-Money or At-The-Money options which are close to the current or expected traded price.
# TRAP 5. Option Pricing are based on Bank Nifty Futures Contract.
This might be one of the very basic but yet very important to consider while trading weekly bank nifty options. As the futures contract on bank nifty has only monthly expires where weekly options on bank nifty settles every Thursday.
So, most of the time bank nifty futures will be trading at a huge premium than the levels of bank nifty index due to time value and cost of carry in the futures contract.
Therefore, it is very important for any trader to consider that all the weekly bank nifty options contract will expire and settle as per the closing settled price of the bank nifty index on every Thursday and not as per the Bank Nifty Futures closing.
Another important note here is that, traders who are writing the weekly Bank Nifty options on the day of expiry with a view of letting them expire worthless or out of the money should consider the support and resistance levels of bank nifty index and not bank nifty futures.
As In our above case, where bank nifty index was trading at 18638 during the close of the market day but on the other side the bank nifty futures contract was trading at 18755 with a premium of more than 100 points. So, it is important to evaluate the pricing of the weekly bank nifty options as per the bank nifty index levels and not futures contract.
Gráfico 2 e # 8211; Bank Nifty Future Intraday Chart (5 Minutes – Aug 4th, 2018)
As per the chart above, we trader may be interested in writing the 18500 or 18600 put option with a view that market has found support @ 18500 levels and has started going bullish during the last hour of the trade on the expiry day so it may not go below 18500 or 18600 till the expiry of the contract.
Table 4 – Bank Nifty Weekly 18500 Put Option (Weekly Expiry of Aug 4th, 2018)
But as we see the Bank Nifty 18500 put option traded at Rs. 0.05 but 18600 put option was trading at Rs. 8.50 even when the bank nifty contract rallied till 18700+.
Table 5 – Bank Nifty Weekly 18600 Put Option (Weekly Expiry of Aug 4th, 2018)
This is because of the fact that the above chart is for the Bank Nifty Future contract expiring on Aug 28th,2018 and not that for the Bank Nifty Index.
From the below chart, if we see the levels as per the Bank Nifty Index it is important to write 18400 and 18500 put options and not 18600 put options. where both of the put options of 18400 and 18500 expired out of the money or worthless as bank nifty settled and closed @ 18571.70 after rallying from 18450 to 18650 in last hour of the trade.
Gráfico 3 e # 8211; Bank Nifty Index Intraday Chart (5 Minutes – Aug 4th, 2018)
Also, do consider that the options will trade before the closing of the expiry as per the settlement price which will come as per the weighted average of last 30 minutes of the the Bank Nifty Index. As in our case, as bank nifty has rallied so the weighted average price will come lower than the traded price in last few minutes.
Are You Ready to Get Serious?
The reason most new traders fall into these traps isn’t because of lack of interest but because of lack of information which is available there in the market.
If you’ve fall into any of these traps, It is OK. All is not lost.
Even if you are a new trader, now that you know the traps, you can avoid them with ease.
And, I can expect that.
you’re going to be different, right?
You’re going to commit yourself to not fall into these mistakes and traps..
And, make the better use of opportunity by making big bucks from the trading…
Leave a comment, telling me your experience with any of these….
KNOWLEDGE IS POWER!
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Day Trader Lost Rs. 18 Lakhs in 5 Minutes by investing Rs. 11250 (That too in a profitable trade) - April 23, 2017 Warning: 5 Traps To Avoid When Trading Bank Nifty Weekly Options on the Expiry Day - August 15, 2018 Why Trading Every Day is a Silly Plan (And What to Do Instead) - July 10, 2018.
36 pensamentos sobre & ldquo; Warning: 5 Traps To Avoid When Trading Bank Nifty Weekly Options on the Expiry Day ”
Good information. Obrigado.
Happy to know that you find it useful…. We are amazed to see how quick you commented on the post just after we published it.. You commented it first. Awesome…
Where can we get weighted average price on real time.
Same we can get it in the charting trading software. We will share the same in this same article on how to calculate the volume weighted average price manually… Do check the article again later in the day..
Thanks you for your prompt reply. Instead of calculating manually, is there any way to get price real time. you are doing extant job in giving valuable information. kudos to your team.
Which charting software are you using for trading? Also, yes I too feel its difficult to calculate it manually in real time market.
Generally, we take a close guess on as per the movement of the market in last 30 minutes. So, if market has rallied in the last 30 minutes then it will adjust lower than the last traded price which may hover around 50% of the last 30 minute range.
You can use the charting software indicator sector to come up with the weighted average price…
By The Way, Thanks for you kind words…
And Yes, Happy Independence Day… Jai Hind.
I am using zerodha 5 minute heikinashi candle chart. rsi and stocastics.
Do check the study and indicator section – there must be an option to add the weighted average price for the stock or index. Till then let me try to find from my end on how to add it in your charting software and other used by other traders. We will update you via email once I get the info.
Also, If you are an experienced trader or an investor, do share your story or ideas on how you trade the market and how you use options market and specifically Bank Nifty Weekly Options to make profit.
You can get the weighted average price in you Market Watch by adding an additional column Predictive Close. This gives the estimated closing price of that particular scrip which helps you to know On expiry days, whether the option will expire in the money or out of the money.
very very useful information here and it will really help lot of traders to avoid such mistakes and save their hard earned money.
We are delighted that you liked our work. Yes, there are many such mistakes that traders generally fall into due to lack of awareness and information available. For this we have taken an endeavour to share all possible info to help traders not fall into such traps…
if i buy bank nifty both call and put and it exercise by exchange then what would be stt in the money or out the money.
All the options which expire out of the money will not attract any additional STT.
Say, BankNifty Index expires @ 19900 so all the call options above 19900 will expires out of the money and on the other hand, all the put options below 19900 will be out of the money.
But all the call options which are below 19900 will be in the money and if are not squared till the expiry will attract STT @ 0.125% of the (Strike price + Premium) x lot size.
In the above case, say we let 19800 call expire at the expire then STT of Rs.1000 will be charged (19800 +
100) x 40 x 0.125%..
Hi can you please explain to me what happens when you short an OTM call @ 14 (3 days before expiry) and on expiry day, the price of the call goes to 0.5 as the call is still OTM. What if there were no buyers and i was forced to let it settle. How does this settlement happen and who buys them if exchange settles it after expiry.
Wanted to congratulate in this wonderful informative write up. Kudos.
As the option has expired out of the money, then you keep all the money you received when you shorted it @ Rs. 14.
An example to illustrate this say you wanted to sell a mobile phone for Rs. 19800 and some friend comes to you and said he wishes to buy it but will need three days to arrange the money. To grant him three days you asked him to pay a security amount say Rs. 14. So, if he is able to find a buyer for that phone above Rs. 19800 then only he will come to you and exercise his right.. Else he will let the right expire and lose Rs. 14 which is the maximum profit you earn.
*His intention is to make profit and not keep the phone for self (as all the F&O contracts in India are cash settled).
So, the 19800 call option you shorted @ Rs. 14 three days before expiry will expire worthless if market did not expire above 19800. Then surely the buyer of the 19800 call option will not exercise his right. So you keep all the money you received i. e. Rs. 14.
Regarding STT, as you have shorted the call option then you would have already paid STT as per the premium value of the option and need not to worry whether you buy the contract in the market or let it settle via exchange. Because there is no STT on the buy side of the contract.
The above was an extremely informative article.
Would be glad if someone may throw some light on a doubt of mine.
What happens if I short an OTM call of 19000 @14 (3 days before expiry) and create a short vertical spread by buying 19100 !@ 6. Now, on the day of expiry say spot stays at 18700 and both these positions are trading below Re1. Is it safe to let this trade go into expiry and how exchange settles this trade? or is it always safe to settle this position at market even with less profit? Would also like to know how exchanges settle both of these positions after expiry.
Because the bank nifty index settles @ 18700. So both 19000 & 19100 call option expired out of the money. So, you will keep Rs. 14 on 19000 call option while you loose Rs. 6 on the 19100 call option.
So, either you let it expire and get it settle via exchange or you square it in the market it makes no difference. As both are out of the money so there is no question of higher STT to be charged.
Regarding settlement, to keep it simple its just like you shorted a stock @ Rs. 14 and it becomes zero so you made Rs. 14 on that stock while the other one you bought at Rs. 6 also becomes zero so you loose Rs. 6 on the second stock.
Only important consideration when trading options is when you bought an option and it is expiring in-the-money. So those are required to be squared of in the market than letting it expire and settle at the exchange due to higher STT cost (As explained deeply in the article)..
Hope this clarifies, If still you are in doubt please share. I will surely help to sort that out.
I am a new trader, and a new reader of your blog. Just felt one thing – you are writing too long. You are telling lot of stories before coming to the point. Please come to the point fast. Otherwise it becomes boring. just take it as a feedback.
Appreciate your feedback. Will make a note while writing new articles.
Can you please guide how to Start trading in weekly option? A blog which will guide a beginner to start? Also a step by step guide to Start for beginners.
Does this mean that when I enter into a Short Straddle (short 1 ATM call and 1 ATM put) and the underlying expires at any other price than the strike of these options, its best for me to not close my positions at all?
Lets assume that the settlement price of the underlying is between the two break-even points and my short straddle has resulted in a profit.
STT is paid only on the selling of the options contract. So, if you have short call and put then you have already paid the STT and need not to worry to fall under the STT Trap.
The only thing need to consider is for Straddle whether you are more profitable squaring that in the market or by letting it settle as per the settlement price of the underlying.
Thanks @sreejith. Hope to keep on getting such words…Again and Again.. Thanks.
Started option trading with a hope to make huge money and lost 42l…. huge huge loss… been trapped to all your mentioned 5 traps and trapped to unwanted elements who had little or no knowledge… but no one mentioned or enhanced my knowledge…your post and explanation are so useful tt given me a little moral boost up not to let go market and keep continuing with whatever little am left with….
Thank you for such detailed post and giving your valuable time for small traders.
I can truly understand the pain you must have gone through & I know how bad it feels when things doesn`t work out as planned specially when trading.
But it makes me feel good that you have find another hope and boosted self to try back again which really shows that you have found something in life which gives you happiness.
And i am sure this time it will be different – With big valuable knowledge, with a pre defined plan and list of mistakes not to commit again.
As Spryte Loriano once said – Every great story on the planet happened when someone decided not to give up, but kept going no matter what.
Thank you for your swift response…
Kindly advise on your paid advisory service on whatsapp.
At present, We have not started the paid advisory services as registration with SEBI and many other formalities are required to be done. We are under plan to start the advisory soon.
And also, we are in process to start the premium newsletter services to help traders be in-sync with market.
We will intimate you on your whats app number or via email.
Just checked.. You have added your number and email to receive the newsletter. Also, do share what else information or knowledge center you want us to build to help you with your trading. You can share it here or send me an email on support@justtrading. in.
Firstly I must thank you. You have provided so much information with all the necessary details.
As I am not new to trading (I trade in mostly cash equity market) and also know all about the call and put options, but that was all theoretical. Till today.
Today I traded for the first time in options. I Bought 2 lots of BANKNIFTY 19300 CE at Rs. 15 and settled it at Rs. 23. A small profit. But I must say that it rallied to Rs. 160 later on till 3.10. After that it finally settled at Rs. 150.(almost).
I thought I could have made a lot of money using just Rs. 232 (Rs. 116 per lot). Alongside I thought that if I had bought 50 lots and carried the same to Rs. 150 and squared off at around 3.10 pm what would have been the profits.
But I don’t get too excited, so I searched about some options values and how they are valued in reality. And really you have explained quite a bit more than expected detail. :-).
I just want to know one thing. When I looked in the span calculator, the 19300 CE scan risk was only Rs. 116. Why is that?
Am I not required to pay the total amount of Rs. 15 * 80 i. e. Rs. 1200. Or am I mistaken?
Is the Rs. 116 the amount I am required to pay while buying the call option. Or the full amount is required to buy the option?
If the full amount is required to buy the option, then what is this Rs. 116 i. e. the scan risk. And how to calculate the number of lots that can be purchased?
Seriously, It was really good reading your thought. Kicked me with a motivation punch to keep sharing more great useful ways for trading… Obrigado!
I am really happy for you that you just started trading options today and had a profit. Congrats on that.. The party is due on you now! Also, that you traded and exited the trade as per your plan and not bothering where the market is heading. Keep following your rules and plan…
To take the benefit of the big moves and not letting profits run into losses, professional traders generally enter with multiple lots and exit some in the early moves and keep trailing the rest to keep following with the market moves.
Regarding your question for margin, you are right – as you are buying you are required to pay only 80×15 = 1200. I am unsure of what this Scan risk is about. It might be showing for leveraged position where you place stop losses along with the buying orders which requires you to pay less than the usual margin for intraday trades.
Share further details so that i can check and we can discuss further.
Anyways, Congratulations to you… I am really happy for you. Keep learning, maintain your calm and stay profitable… Hope to add another profitable trader in our list of JustTraders.
I wish you all the very best for future… Permaneça conectado.
Never Short Sell large quantity of the Options let it be Nifty, Bank Nifty or Stock Options. Easy way to lose money.
Deep out of the money Sell call or Sell Put ? Answer No… You will lose money …..
Example Short 50 Qty of Bank Nifty at the price of Rupees 50 , Price 50* Lot Size 40=one contract Rupees 2000 Credit * 50 Qty =100000 Credit …. even when the price comes down to 20 Rupees or 10 Rupees , when you wait for more price dip to happen. Market will not work on favour of you all times , one trade reverses.. Price moves to 10 Rupees to 150 in span of Minutes or gagup opening.
think of your losses.
Yes, its always sensible to trade safe and sound. One should develop and follow his trading rules well in advance and work under that framework only.
Thanks for the Useful Information. I have already fell into 2 of the above traps mentioned. I have learnt a lot from this article and this information will be very useful for trading.
Thanks Prashant. I can understand the pain of falling into stupid mistakes.
but actually MISTAKE IS NOT COMMITTING A MISTAKE RATHER STAYING WITH THE MISTAKE. So, its important not repeat it again.
Wish you a great trading career ahead.
Thanks, you r doing great job…keep it up, and god bless you.
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