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                                          Active Call Options

Nifty Tips of 13/1/2014

Index/Option Open T-1 T-2 T-3 SL
Nifty 6242 6230 6201 6180
6280

13/1/14 Buy Put 6100 @ Rs25 Targets 32,40,60 SL 14 Revise SL 10

2/1/14 Buy Put6100 @ Rs25 Targets 32,40,60 SL 14 Achieved Target T3.

19/12/13 Buy Put 6100 @ Rs17 Targets 25,32,55, SL 9 SL triggered.

16/12/13 Buy Put 6000  @ Rs19 targets 25,34,55 SL 9  SL triggered.

9/12/13 Buy Put 6100 4 lots @ Rs 22 Targets 30,37,50 SL 11 Acieved Target T2

5/12/13 Buy Put 6000@ Rs 38 2 lots Targets 45,55,72 SL 25 Achieved Target T-1 45

2/12/13 Buy Put 6000 @ Rs60 Targets 66,75,92 SL 46 Achieved Target T-3

25/11/13Buy Dec Put 6000 2 lots @ Rs78 Targets 83,90,110 SL 62  Achieved Target T2 and made high of Rs102 

19/11/13Achieved Target T3 72 of Call 6200 Profit 78-48= 30 Points Buy 2 lots Dec Put 6000 @ Rs 52 Targets 59,65,82 SL 40

12/11/13 Buy 3 lots call 6200 @ Rs 40 Targets 48,59,72 SL 30

11/11/13 Buy 2 lots call 6200 @ Rs 72 Targets 80,88,100 SL 58

28/10/13 9.25am Buy Oct Call 6300 6 lots @ Rs11 Targets 20,29,50 SL---------Zero Max Loss Rs3300/-

Exit @ Rs11 Loss 11-10=1

Nov Call 6300 is also on hold with SL 72.

24/10/13 9.45 Exit Nov call 6300 @ Rs143

10.00 Wait and watch............

14.30 Buy Nov call 6300 2 lots @Rs 98 Targets 106, 114,130 Revised SL 72 Loss 98-72 = 26 X 100 Rs2600/-

23/10/13 9.00am Revise put 6100 SL 20 and hold based on US future is negative since last 5 hrs and loss is increasing.

13.30pm Exit Put 6100 @ Rs52.

14.00pm Buy Nov Call 6300 2 lots @ Rs90 targets 97,109,125 SL 72 Profit 143 - 97 = 46X100 Rs4600/-

22/10/13 9.20am Buy Put 6100 3 lots Rs 36 Targets 44,55,75 SL 25 Profit 52-36 = 16X150 = Rs2400

21/10/13Buy Put 6100 2 lots Rs 42 Targets 47,55,75 SL 37 loss 42-37 = 5

18/10/13 13.2pm Exit Call 6200 @ Rs 75/- 

17/10/13 9.20am Buy Call 6200 2 lots @ Rs 48 Targets 55,65,80 Revised SL 27

11/10/13 Hold Call 6100 with T-1, T-2 as Stop loss made high of Rs148

Profit 140-104 = 36*100 = Rs3600/-

10/10/1311.25am Exit put 5900 at Rs 104 Buy call 6100 2 lots@ Rs103Targets 109,116,132 Sl 90 

9/10/13 14.00 pm Buy Put 5900 2 lots @ Rs106 Targets 109,120,142 SL 80 Revise SL 72

Loss106-104 = 2*100 = Rs200

7/10/13 9.45am Buy Call 6000 2 lots @ Rs102 Targets 109,120,155 SL 80 profit 155-102 = 53points

Profit 53*100 = Rs5300/-

3/10/13 14.00pm Do not hold put 5800 for tomorrow. Exit today. Market should have some correction today as per USA Future Loss 104-90 = 14*100 = Rs1400/-

12.20pm Exit Call 5900 @ Rs 170 Buy Put 5800 2 lots @ Rs104 Targets 109,115,127 SL Exit before15.15pm

1-10-13 Buy 3 lots call 5900 @ 107 targets 112,119,135 SL 90Exit @ Rs170 Profit 170-107 = 63

Profit 150*63 = Rs 9450/-

19/9/13 Buy 2 lots Put 5700 @ 8 targets 13,19,30 SL 2 Achieved target T1 13-8 = 5*100 = Rs500/-

16/9/13 Buy Put 5700 4 lots At Rs40 Targets 51,64,72 SL 22  Achieved target T3 Profit72-40 = 32

Profit 32*200 = Rs6400/-

2/9/13 Buy Put 5300 2 lots @ Rs 85 Targets 93,107,120 SL71 Target T3 achieved

Profit 120-85 = 35 *100 = Rs3500/-

26/8/13 Buy Sep Put 5300 1 lot @ Rs 78 Targets 82,90,103 SL 67 Achieved target T3 made high of Rs297 Profit 282-82 =200 Profit 200*50= Rs10,000

50X21 = Rs1050

23/8/13 Buy Sep Put 5200 1 lot @ Rs90 Targets 98, 105,121  SL81 Loss 90-81= 9   50X9 = Rs450/-

22/8/13 Buy only One Lot Sep Call 5500 near Rs82 Targets 90,96,103 SL 70

Call 5500 close @ Rs132 Profit 132-82 = 50 points  50X50 =Rs2500/-

Hold Call 5800 Till Expiry. Loss Rs6150/-

Buy call 5800 6 Lots @ Rs 6 Av. Price Rs10.25 Hold for Profit

Revise Call 5800 SL 3 Loss

 Buy Call 5800 6 Lots At Rs 14.50/- With targets 23, 33,50 SL 7 Hold for Next Week

Call 5900 6 lots are on hold buy @ Rs15.50 Targets 23,32,50 SL 5  Achieved Target T-1  Profit Rs2250/-

Nifty Tips of July 2013

 Buy Aug Call 6200 @ Rs44 2 lots Targets 47,53,60 Strict SL 37 Loss 44-37 =7, 7*100 = Rs700/-

 Aug Call 6200 Achieved Target T-3 and made high Rs88/- Profit 83-53 = 30, 100*30 = Rs3000/-

16/7/13 9.45am Buy 2 Lots Aug Call 6200 @ Rs53 Targets 59, 65,72 SL 41

Call 6100 achieved Target T2 and made high of Rs36 Profit 30-14 = 16,  200*16 = Rs3200/-

10/7/2013 Hold Call 6100 with targets 19,25,55. Trade less S&P downgrade Itlay for worst recession since world war two.

Trace USA Future  

9/07/2013 Buy Call 6100 4 lots @ Rs14  Targets 19,25,55 SL 6

3/7/2013 Buy Call 6000 4 lots @ Rs20 Targets 27,36,52 SL 11. Hold for tomorrow

5/7/13 Target T2 achieved Profit 46-20= 26 points 200*26= Rs5200/-

25/6/13 Buy July call 5900 2 lots @ Rs27 Targets 33,38,47 SL 21 

Call 5900 Touch Rs 97 Profit 97-27= 50 points  Profit 100*50= Rs5000/-


   Share market is not a money machine. Just hold your call positions and wait for up move. 

Nifty Tips of May 2013

Do not Open New Positions. No trading is better than Loss. If INR recovers till 55.20 than Nifty can move towards 6200 otherwise a huge risk of nifty collapse any time.

 

Date Results
2-4-13 Open 5712 Targets 5725,5742,5765 SL 5672 Target T2 achieved Call 5900 6 lots SL triggered 20-12=8  Loss 8*300 = Rs2400
10-4-13 Call 5700 4 lots buy @ Rs15 profit of 30-15=15 points  200*15 = Rs3000/-

15-4-13 Call 5700 Buy on dated 15/4/13  Profit 51-13 = 38     300*38 = Rs11400/-
25-4-13 Call 5900 8 lots 5 Sold @ Rs13.50 Profit 13.50-5= 8.50    400*8.50 = Rs3400
26-4-13 Put 5700 4 lots buy @ Rs37  Loss 37-25= 12 200*12 = Rs2400/- 

                                                             Old Tips

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What Is An Option
A stock option is a contract which conveys to its holder the right, but not the obligation, to buy or sell shares of the underlying security at a specified price on or before a given date. This right is granted by the seller of the option. There are two types of options, calls and puts. A call option gives its holder the right to buy an underlying security, whereas a put option conveys the right to sell an underlying security.

Underlying Security

The specific stock on which an option contract is based is commonly referred to as the
underlying security. Options are categorized as derivative securities because their
value is derived in part from the value and characteristics of the underlying security. A
stock option contract's unit of trade is the number of shares of underlying stock which
are represented by that option. Generally speaking, stock options have a unit of trade
of 100 shares. This means that one option contract represents the right to buy or sell
100 shares of the underlying security.

Strike Price
The strike price, or exercise price, of an option is the specified share price at which the
shares of stock can be bought or sold by the holder, or buyer, of the option contract if
he exercises his right against a writer, or seller, of the option. To exercise your option
is to exercise your right to buy (in the case of a call) or sell (in the case of a put) the
underlying shares at the specified strike price of the option.

Premium
Option buyers pay a price for the right to buy or sell the underlying security. This price
is called the option premium. The premium is paid to the writer, or seller, of the
option. In return, the writer of a call option is obligated to deliver the underlying
security (in return for the strike price per share) to an option buyer if the call is
exercised and, likewise, the writer of a put option is obligated to take delivery of the
underlying security (at a cost of the strike price per share) from an option buyer if the
put is exercised. Whether or not an option is ever exercised, the writer keeps the
premium.

American, European and Capped Styles
There are three styles of options: American, European and Capped. In the case of an
American option, the holder of an option has the right to exercise his option on or
before the expiration date of the option; otherwise, the option will expire worthless and
cease to exist as a financial instrument. At the present time, all exchange-traded stock
options are American-style. A European option is an option which can only be
exercised during a specified period of time prior to its expiration. A Capped option
gives the holder the right to exercise that option only during a specified period of time
prior to its expiration, unless the option reaches the cap value prior to expiration, in
which case the option is automatically exercised. The holder or writer of either style of
option can close out his position at any time simply by making an offsetting, or
closing, transaction. A closing transaction is a transaction in which, at some point
prior to expiration, the buyer of an option makes an offsetting sale of an identical
option, or the writer of an option makes an offsetting purchase of an identical option.
A closing transaction cancels out an investor's previous position as the holder or writer
of the option.
The Option Contract
An option contract is defined by the following elements: type (put or call), style
(American, European and Capped), underlying security, unit of trade (number of
shares), strike price, and expiration date. All option contracts that are of the same type
and style and cover the same underlying security are referred to as a class of options.
All options of the same class that also have the same unit of trade at the same strike
price and expiration date are referred to as an option series. If a person's interest in a
particular series of options is as a net holder (that is, if the number of contracts bought
exceeds the number of contracts sold), then this person is said to have a long position
in the series. Likewise, if a person's interest in a particular series of options is as a net
writer (if the number of contracts sold exceeds the number of contracts bought), he is
said to have a short position in the series.

Exercising the Option
If the holder of an option decides to exercise his right to buy (in the case of a call) or
to sell (in the case of a put) the underlying shares of stock, the holder must direct his
broker to submit an exercise notice t. in order to ensure that an option is
exercised on a particular day, the holder must notify his broker before the broker's
cutoff time for accepting exercise instructions on that day. Different firms may have
different cutoff times for accepting exercise instructions from customers, and those
cutoff times may be different for different classes of options.

The Pricing Of Options
There are several factors which contribute value to an option contract and thereby
influence the premium or price at which it is traded. The most important of these
factors are the price of the underlying stock, time remaining until expiration, the
volatility of the underlying stock price, cash dividends, and interest rates.
Underlying Stock Price
The value of an option depends heavily upon the price of its underlying stock. As
previously explained, if the price of the stock is above a call option's strike price, the
call option is said to be in-the-money. Likewise, if the stock price is below a put
option's strike price, the put option is in-the-money.  Security is referred to as the option's intrinsic value.                     Only in-the-money options have intrinsic value. 

          Option Trading Risk for Option Buyer 


The option trading risks pertaining to options buyers are: 
1. There is always Risk associated with losing the entire investment in a relatively 
short period of time. 
2. The risk of losing the entire investment increases as the option goes out of the 
money (OTM) and as expiration nears. 
3. European style options which do not have secondary markets on which to sell the 
options prior to expiration can only realise its value upon expiration. 
4. Specific exercise provisions of a specific option contract may create risks. 
5. Regulatory agencies may impose exercise restrictions, which stops option trader 
from realising value. 
Option Trading Risk for Option Seller 
The option trading risks pertaining to options sellers are: 
1. Options sold may be exercised at anytime before expiration. 
2. Covered Call traders forgo the right to profit when the underlying stock rises above 
the strike price of the call options sold and continues to risk a loss due to a decline in 
the underlying stock. 
3. Writers of Naked Call Write risk unlimited losses if the underlying stock rises. 
4. Writers of Naked Put Write risk unlimited losses if the underlying stock drops. 
5. Writers of naked positions run margin risks if the position goes into significant 
losses. Such risks may include liquidation by the broker. 
6. Writers of call options can lose more money than a short seller of that stock on the 
same rise on that underlying stock. This is an example of how the leverage in options 
can work against the option trader. 
7. Writers of Naked Call Write are obligated to deliver shares of the underlying stock 
if those call options are exercised. 
8. Call options can be exercised outside of market hours such that effective remedy 
actions cannot be performed by the writer of those options. 

9. Writers of stock options are obligated under the options that they sold even if a 
trading market is not available or that they are unable to perform a closing transaction. 
10. The value of the underlying stock may surge or ditch unexpectedly, leading to 
automatic exercises.

Other option trading risks mentioned are: 
1. The complexity of some option strategies is a significant risk on its own. 
2. Option trading exchanges or markets and option contracts itself are open to 
changes at all times, the availability and conditions of which are not to be taken to be permanent. 
3. Options markets have the right to halt the trading of any options, thus 
preventing investors from realising value. 
4. The Risk of erroneous reporting of exercise value. 
5. If an options brokerage firm goes insolvent, investors trading through that firm 
may be affected. 
6. Internationally traded options have special risks due to timing across borders. 
The option trading risks factors enlisted above are extremely detailed and "micro" in scope, surrounding a few basic themes which are: 
1. Naked options positions has unlimited loss potential. 
2. Options can expire out of the money and worthless. 
3. Options leverage can work against one as much as it can work for one. 
4. Obligations and rights of buyers and sellers. 
5. Terms, conditions and policies of the specific option contract, options 
exchanges or options brokers can change at anytime. 
Every of the above option trading risks can result in a catastrophic loss of capital, that is why one must fully understand stock options as a financial instrument so that one can lower the option trading risks posed by the above.

 


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The Option Contract