Kindly suggest if my strategy is right. Nifty spot is at 8524 and nifty 8500 call is at 115 while the put of same strike is at 71. I wish to carry them till expiry. If nifty ends on 8500 i might get entire premium (115+71=186). In fact, i will be not only safe but in profit till nifty is in range of 150 points on either side of 8500. Thanks n regards
You did not mentioned Buy / Short. From your words I understood You want to be on Short. Right ?
Then You are right.
But Think twice before shorting At the Money options. Because We can’t say when Nifty crosses your limits, It may be possible even on expiry day also.
Think about out of money options to short or Keep some hedging for At the Money Shorts.
This strategy is entirely wrong. If you carry till expiry, see what happens:-
1. You bought NIFTY 8500 Call at Rs 115 (Nifty Spot is at 8500) (If bought 1 Call, Qty-25)
After expiry, you will get 8524 (spot) - 8500 (strike) = 24 x 25 (1 Lot) = Rs 600 only.
(YOU WILL GET PROFIT ONLY IF SPOT IS MORE THAN STRIKE PRICE)
In the case of call What you will get is, how much nifty spot is more than your strike price x Qty bought.
2. You bought NIFTY 8500 Put at Rs 71 (Nifty Spot is at 8500) (If bought 1 Call, Qty-25)
After expiry, You will get 8500 (spot) - 8500 (strike) = 0
(YOU WILL GET PROFIT ONLY IF SPOT IS LESS THAN STRIKE PRICE)
In the case of Put What you will get is, how much nifty spot is less than your strike price x Qty bought
Hope it clarifies your doubts
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How Iam doing NIFTY Options Call Put Intraday Trading? What is my Strategy? What You need?
1. Basic Understanding of Index options, Call Put etc.
2. Good PC and or Laptop with UPS (In case of power failure)
3. Broadband Internet/ 3G Net connection.
4. TV with CNBC Channel (For latest news)
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9. Tips worked for only half time, so what you got is what you loose and some dynamic trading by me made 2500 loss.
10. I have paid Rs 22500 as brokerages (Can u believe this?).
11. Paid Rs 10000 for tips.
After that I have changed my plan stopped trading for a month and checked what went wrong with me? I got this
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Thanks and Happy trading.
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yes i am talking about shorting otherwise how can i collect premium if i buy them.