Understanding intrinsic value decay

Hi friends. This is girish once again.

The intrinsic value is determined by the difference between the current trading price and the strike price. Only in-the-money options have intrinsic value. Intrinsic value can be computed for in-the-money call options by taking the difference between the spot price and the strike price. Intrinsic value can be computed for in-the-money put options by taking the difference between the strike price and the spot price. Out-of-the-money options have no intrinsic value.

As few of knew , intrinsic value is a characteristic feature of ITM options. But  in banknifty weekly expiry , there is a good decay in the intrinsic value of ITM options which in turn affects the pay off chart and buyers are getting losses more than expected in ITM options and sellers are making money in intrinsic value decay.

So how to benefit ITM intrinsic value decay?????

One can create a reverse arbitrage to make profit in banknifty weekly expiry.

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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Nifty daily chart view

Hi friends. This is girish once again.

Plz see the below attached image.NIFTY_Daily_11-12-2017

Nifty on daily chart forming a hanging man reversal pattern . tmrw check for confirmation to go bearish . if no confirmation then wait for further reversal pattern ..

Also the major trend of the nifty is now downtrend .. Also nifty is now approaching a strong resistance zone .

Upon reversal confirmation , i will go for a less limited risk high reward options strategy. Option buyers can go for put buying only on confirmation  ..

Without confirmation don’t blindly trade candle stick patterns …

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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Shortly understanding implied volatility (IV)

Hi friends. This is girish once again
Implied volatility is one of the factors affecting option premium. Implied
volatility is directly related to the costliness of the option premium. A low IV
indicates options premium are not costly and a high IV indicates options
premium are costly.

But the problem with IV is that there is no exact benchmark for its low and
high value. Different traders have their different benchmarks.

High IV is beneficial for option sellers as they get high premium to short.

Option buyers should keep an eye on IV as high IV is not beneficial for them
since if their trade is opposite, they can suffer huge losses. For them, rising IV is beneficial.

But simply don’t trade on IV basis. Have something to filter your trades accordingly.

Friends i am providing my own views. U please trade as per your own views. Don’t
blindly follow me.

 

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Beauty of price action trading which indicated a good reversal for nifty

Hi friends. This is girish once again.

Refer to the article posted earlier

https://priceactionandoptionstrading.wordpress.com/2017/08/13/nifty-at-support-zone-with-monday-as-a-deciding-day/

Nifty reversed from the support by giving a price action buy signal and confirmation. Now nifty has approached 9900. Option buyers plz be on strict hedging  .

Those who are already on put selling can hold positions until 9650 is taken out. Don’t initiate fresh pe selling now as risk is not favourable now .

Now lets see till when nifty gives a price action sell signal ..

Nifty has one minor resistance around 9910-9950. Crossing above will head towards 10050.

Don’t trade blindly on hope and assumptions. Trade what u see in chart …..

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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Nifty at support zone with monday as a deciding day

Hi friends. This is girish once again.

Plz see the below attached image.

NIFTY_Daily_13-08-2017

Nifty has now finally entered into the support zone . Also it is forming an inverted hammer.

Monday nifty closing will decide whether reversal will happen or not . If that support fails , then nifty might head towards 9500.

India vix had risen much indicating a good volatility benefiting option sellers.

Options buyers play with debit spread strategy while sellers wait for reversal with credit spread strategy ..

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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Nifty daily chart view

Hi friends. This is girish once again.

Plz see the below attached image.

NCNIFTY

As u can clearly see in the image, nifty is  now at imp resistance zone .Surprisingly, nifty has formed an inside bar pattern. Now wait for this inside bar pattern to give a breakout…

Looking at the nifty open interest data, nifty will try to oscillate in the range of 9300-9900 as per writers ..

So for upside breakout , play with debit spread fot those who going for buying options.. Smart traders can wait for reversal to sell ce ..

But options buying will not be worthy as theta is increasing , so protect options buying by debit spread strategy…

Future traders can do protective covered call strategy or delta hedging …

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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Nifty daily chart view

Hi friends. This is girish once again.

Plz see the below attached image.

NCNIFTY

Nifty is now forming an inside bar pattern on daily chart . Now wait for the breakout of the pattern .

For upside breakout , take strictly debit spread as nifty might enter into the above strong resistance zone. For downside break also be with debit .

Option sellers wait for downside break with credit spread .. Upside risk reward not much favourable …

Focus on zones with proper signals and confirmation for exit ..

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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Simple trading plan to get good compounding returns

Hi friends. This is girish once again.

Plz see the below attached image.

trading plan

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

 

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Nifty daily chart view

Hi friends. This is girish once again.

Plz see the below attached image.

NIFTY_Daily_12-06-2017

As discussed with few of my students, nifty moved sideways by forming an inside bar pattern and gaved downside break ..

Now around 9500-9550 is a strong support zone .. Also as per option chain , it is acting as a support zone . So, better keep an eye on that zone to check the completion of the ongoing retracement to go bullish again.

Check for bullish signals and confirmation ….

Now the delta of the calls had decreased for those who bought calls on hope earlier without following chart … So, better trade as per chart and option greeks and hedging to play safer…

Also now keep an eye for bullish signals and confirmation ….

 

 

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