Estratégias de negociação de opções zerodha

Estratégias de opção.

1. Orientação.

1.1 - Definir o contexto Antes de iniciar este módulo na Estratégia de Opção, gostaria de compartilhar com você um artigo de Behavioral Finance que li há alguns anos atrás. O artigo foi intitulado "Why winnin ..

2. Bull Call Spread.

2.1 - Antecedentes As estratégias de disseminação são algumas das estratégias de opções mais simples que um comerciante pode implementar. Os spreads são estratégias multi-legais envolvendo duas ou mais opções. Quando eu digo multi leg stra ...

3. Bull Put Spread.

3.1 - Por que o Bull Put Spread? Semelhante ao Bull Call Spread, o Bull Put Spread é uma estratégia de duas pernas, invocada quando a visão no mercado é "moderadamente otimista". O Bull Put Spread é s ..

4. Ratio de chamada Voltar espalhar.

4.1 - Antecedentes O Ratio de Chamadas Back Spread é uma estratégia de opções interessantes. Eu ligo isso interessante, tendo em mente a simplicidade de implementação e o tipo de remuneração que oferece ao comerciante. ...

5. Bear Call Ladder.

5.1 - Antecedentes O "Urso" na "Escada de Chamada do Urso" não deve enganá-lo a acreditar que esta é uma estratégia de baixa. O Bear Call Ladder é uma improvisação sobre a relação de chamada back spr ..

6. Synthetic Long & # 038; Arbitragem.

6.1 - Antecedentes Imagine uma situação em que você precisaria estabelecer simultaneamente uma posição longa e curta sobre Nifty Futures, que expira na mesma série. Como você faria isso e muito mais ...

7. Bear Put Spread.

7.1 - Spreads versus posições nus Nos últimos cinco capítulos, discutimos várias estratégias bullish de várias pernas. Essas estratégias variaram para se adequar a uma variedade de perspectivas de mercado e # 8211; a partir de ..

8. Existir a propagação de chamadas.

8.1 - Escolhendo Chamadas Sobre Pistas Semelhante ao Bear Put Spread, o Bear Call Spread é uma estratégia de duas pernas invocada quando a visão no mercado é "moderadamente baixista". The Bear Call Spread ..

9. Coloque o Ratio Voltar espalhado.

9.1 - Antecedentes Nós discutimos extensivamente a estratégia "Ligar Ratio Back" no capítulo 4 deste módulo. A propagação da razão de colocação é semelhante, exceto que o comerciante invoca isso quando ele é b ..

10. The Long Straddle.

10.1 - O dilema direcional Quantas vezes você esteve em uma situação em que você faz um comércio depois de muita convicção, longa ou curta e logo após iniciar o comércio, o movimento do mercado.

11. The Short Straddle.

11.1 - Contexto No capítulo anterior, entendemos que, para o longo período, ser lucrativo, precisamos de um conjunto de coisas para trabalhar a nosso favor, repostando o mesmo para sua referência rápida.

12. O Longo & # 038; Short Strangle.

12.1 - Antecedentes Se você entendeu o straddle, então, entender o 'Strangle' é bastante direto. Para todos os propósitos práticos, o processo de pensamento por trás do estrangulamento e strangl ..

13. Max Pain & # 038; Rácio de PCR.

13.1 - Minha experiência com a Teoria da dor de opções Na lista interminável de teorias de mercado controversas, a teoria da "dor de opção" certamente encontra um ponto. Opção de dor, ou às vezes referido ...

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Synthetic Long & # 038; Arbitragem.

6.1 - Antecedentes.

Imagine uma situação em que você precisaria estabelecer simultaneamente uma posição longa e curta sobre Nifty Futures, que expira na mesma série. Como você faria isso e, mais importante, por que você faria isso?

Vamos abordar estas duas questões neste capítulo. Para começar, vamos entender como isso pode ser feito e depois avançar para entender por que alguém gostaria de fazer isso (se você é curioso, a arbitragem é a resposta óbvia).

As opções que você já tenha percebido até agora são instrumentos derivativos altamente versáteis; você pode usar esses instrumentos para criar qualquer tipo de estrutura de recompensa, incluindo a dos futuros (recompensas de longo e curto prazo).

Neste capítulo, entenderemos como podemos replicar artificialmente um longo prazo de pagamento com opções. No entanto, antes de prosseguir, você pode querer apenas rever a recompensa "linear" do futuro longo aqui.

Alternativamente, aqui está uma visão geral rápida -

Como você pode ver, a posição de longo prazo foi iniciada em 2360 e, nesse ponto, você não ganha dinheiro nem perde dinheiro, daí o ponto em que você inicia a posição torna-se o ponto de equilíbrio. Você ganha lucro à medida que os futuros se movem mais alto do que o ponto de equilíbrio e você diminui quanto menor o movimento dos futuros abaixo do ponto de equilíbrio. A quantidade de lucro que você faz para um movimento de 10 pontos para cima é exatamente a mesma que a quantidade de perda que você faria para um movimento de 10 pontos para baixo. Devido a essa linearidade em retribuição, o futuro também é chamado de instrumento linear.

A idéia com um Synthetic Long é construir uma recompensa de longo prazo similar usando opções.

6.2 - Notas de Estratégia.

Executar um Synthetic Long é bastante simples; Tudo o que se tem que fazer é -

Compre a Opção de Compra de ATM Vender a Opção de Compra de ATM.

Quando você faz isso, você precisa ter certeza -

As opções pertencem ao mesmo subjacente ao mesmo prazo de validade.

Deixe-nos dar um exemplo para entender isso melhor. Assume Nifty é em 7389, o que faria 7400 o ataque ATM. Sintético longo exigiria que passássemos por muito tempo em 7400 CE, o prémio para isso é Rs.107 e nós curtiríamos o 7400 PE aos 80.

A saída líquida de caixa seria a diferença entre os dois prémios, isto é, 107 - 80 = 27.

Consideremos alguns cenários de caducidade do mercado -

Cenário 1 - O mercado expira em 7200 (abaixo do caixa eletrônico)

Em 7200, o 7400 CE expiraria sem valor, portanto, perderíamos o prémio pago, ou seja, Rs.107 / -. No entanto, o 7400 PE teria um valor intrínseco, que pode ser calculado da seguinte forma:

Valor intrínseco de Put Option = Max [Strike-Spot, 0]

= Max [7400 - 7200, 0]

Claramente, como somos curtos nesta opção, perderíamos dinheiro com o prémio que recebemos. A perda seria -

O pagamento total da chamada longa e da posição de colocação curta seria -

Cenário 2 - O mercado expira em 7400 (no ATM)

Se o mercado expirar exatamente em 7400, ambas as opções expiram sem valor e, portanto,

Perdemos o prémio pago pela opção 7400 CE, isto é, 107 Obtemos a retenção de prémio para a opção 7400 PE, ou seja, 80 O resultado líquido das duas posições seria -27 e 80 - 107.

Nota, 27 também é a saída líquida de caixa da estratégia, que também é a diferença entre os dois prémios.

Cenário 3 - O mercado expira em 7427 (ATM + Diferença entre os dois prémios)

7427 é um nível interessante, este é o ponto de equilíbrio da estratégia, onde não ganhamos dinheiro nem perdemos dinheiro.

7400 CE - a opção é ITM e tem um valor intrínseco de 27. No entanto, pagamos 107 como prémio, portanto, experimentamos uma perda total de 80 7400 PE - a opção expiraria OTM, portanto, conseguimos reter o prêmio inteiro de 80. Por um lado, fazemos 80 e a outra perdemos 80. Portanto, não fazemos nem perdemos dinheiro, fazendo 7427 o ponto de equilíbrio para esta estratégia.

Cenário 4 - O mercado expira em 7600 (acima do ATM)

Em 7600, o 7400 CE teria um valor intrínseco de 200, faríamos & # 8211;

Valor intrínseco - Premium.

O PE 7400 expiraria sem valor; portanto, conseguimos reter o prêmio inteiro de Rs.80.

O pagamento total da estratégia seria -

Com os 4 cenários acima mencionados, podemos concluir que a estratégia ganha dinheiro enquanto o mercado se move mais alto e perde dinheiro enquanto o mercado diminui, semelhante aos futuros. No entanto, isto ainda não significa necessariamente que a recompensa seja semelhante à dos futuros. Para estabelecer que a recompensa longa sintética se comporta de forma semelhante aos futuros, precisamos avaliar o retorno da estratégia com referência ao ponto de equilíbrio; digamos 200 pontos acima e abaixo do ponto de equilíbrio. Se a recompensa for idêntica, então, há linearidade na recompensa, semelhante aos futuros.

Então vamos descobrir isso.

Nós sabemos que o ponto de equilíbrio para isso é -

ATM + diferença entre os prémios.

A recompensa em torno deste ponto deve ser simétrica. Consideraremos 7427 + 200 = 7627 e 7427-200 = 7227 para isso.

O 7400 CE teria um valor intrínseco de 227, portanto, conseguimos fazer 227 - 107 = 120 O 7400 PE expiraria sem valor, portanto, conseguimos manter todo o prêmio de 80 Em todos nós experimentamos uma recompensa de 120 + 80 = 200 .

O 7400 CE não teria nenhum valor intrínseco, portanto, perdemos todo o prémio pago, isto é, 107 O PE 7400 teria um valor intrínseco de 7400 - 7227 = 173, uma vez que recebemos 80 como prémio, a perda líquida seria 80 - 173 = -93. Em todos nós experimentamos uma recompensa de -93-107 = -200.

Claramente, há simetria de pagamento em torno do ponto de equilíbrio, e por esse motivo, o Synthetic Long imita a recompensa do longo instrumento de futuros.

Além disso, aqui está a recompensa em vários níveis de expiração -

E quando você planeja o Pagamento Líquido, obtemos a estrutura de recompensa que é similar aos futuros de chamadas longas.

Tendo descoberto como configurar um Synthetic longo, precisamos descobrir as circunstâncias típicas em que é necessário estabelecer um longo sintético.

6.3 - O Arbitragem do mercado de peixe.

Eu assumirei que você tem uma compreensão básica sobre Arbitrage. Em palavras fáceis, a arbitragem é uma oportunidade de comprar bens / ativos em um mercado mais barato e vender o mesmo em mercados caros e diminuir a diferença de preços. Se bem executado, os negócios de arbitragem são quase sem risco. Deixe-me tentar dar-lhe um exemplo simples de uma oportunidade de arbitragem.

Suponha que você mora por uma cidade costeira com abundante oferta de peixes do mar frescos, daí a taxa em que o peixe é vendido em sua cidade é muito baixa, digamos Rs.100 por Kg. A cidade vizinha, a 125 km de distância, tem uma enorme demanda pelo mesmo peixe de mar fresco. No entanto, nesta cidade vizinha, o mesmo peixe é vendido a Rs.150 por Kg.

Dado isso, se você consegue comprar o peixe da sua cidade em Rs.100 e conseguir vender o mesmo na cidade vizinha em Rs.150, então, em processo, você obtém claramente o diferencial de preços, exceto Rs.50. Talvez você tenha que explicar o transporte e outras logísticas, e em vez de Rs.50, você consegue manter Rs.30 / - por Kg. Este ainda é um belo negócio e esta é uma arbitragem típica no mercado de peixe!

Parece perfeito, pense nisso e # 8211; se você puder fazer isso todos os dias, compre peixes da sua cidade em Rs.100 e venda na cidade vizinha em Rs.150, ajuste Rs.20 para despesas, então Rs.30 por KG é garantido lucro livre de risco.

Isso é realmente livre de riscos, não fornece nada. Mas se as coisas mudam, então sua rentabilidade, deixe-me listar algumas coisas que podem mudar & # 8211;

No Fish (risco de oportunidade) - Suponha que um dia você vá ao mercado para comprar peixe em Rs.100, e você percebe que não há peixe no mercado. Então você não tem oportunidade de fazer Rs.30 / -. Não há compradores (risco de liquidez) - Você compra o peixe em Rs.100 e vai para a cidade vizinha para vender o mesmo em Rs.150, mas você percebe que não há compradores. Você fica segurando um saco cheio de peixes mortos, literalmente sem valor! Baixa barganha (risco de execução) - Toda a oportunidade de arbitragem depende do fato de que você pode "sempre" negociar comprar em Rs.100 e vender em Rs.150. E se em um dia ruim você comprar em 110 e vender em 140? Você ainda tem que pagar 20 para o transporte, o que significa que, em vez do lucro regular de 30 Rúpias, você ganha apenas 10 Rúpias, e se isso continuar, a oportunidade de arbitragem ficará menos atraente e talvez você não queira fazer isso. O transporte torna-se caro (custo de transação) - Este é outro fator crucial para a rentabilidade do comércio de arbitragem. Imagine se o custo do transporte aumenta de Rs.20 para Rs.30? Claramente, a oportunidade de arbitragem começa a parecer menos atraente, já que o custo de execução é maior e superior. O custo da transação é um fator crítico que faz ou quebra uma oportunidade de arbitragem A pontuação da competição (quem pode diminuir menos?) - Dado que o mundo é intrinsecamente competitivo, você provavelmente atrairá alguma competição que também gostaria de fazer esse Rs livre de risco. 30. Agora imagine isso: até agora, você é o único a fazer esse comércio, ou seja, comprar peixe no Rs.100 e vender em Rs.150. Seu amigo percebe que está fazendo um lucro livre de risco e ele agora quer copiá-lo. Você não pode realmente impedir o seu, pois este é um mercado livre. Ambos, você compra na Rs.100, transporta-a em Rs.20 e tenta vendê-lo na cidade vizinha Um comprador potencial entra, vê que há um novo vendedor, vendendo a mesma qualidade de peixe. Quem entre vocês dois provavelmente venderá o peixe ao comprador? Claramente dado o peixe é da mesma qualidade o comprador irá comprá-lo do vendedor de peixe a uma taxa mais barata. Suponha que deseja adquirir o cliente e, portanto, solte o preço para Rs.145 / - No dia seguinte, seu amigo também descarta o preço e oferece vender peixes a Rs.140 por KG e, portanto, acender uma guerra de preços. Em todo o processo, o preço continua a cair e a oportunidade de arbitragem simplesmente se evapora. Quão baixo o preço pode cair? Obviamente, ele pode cair para Rs.120 (custo de compra de peixe e transporte). Além de 120, não faz sentido executar o negócio Eventualmente em um mundo perfeitamente competitivo, a competição e a oportunidade de arbitragem deixam de existir. Neste caso, o custo do peixe na cidade vizinha cairá para Rs.120 ou um preço naquela vizinhança.

Espero que a discussão acima tenha dado uma rápida visão geral sobre a arbitragem. Na verdade, podemos definir qualquer oportunidade de arbitragem em termos de uma simples expressão matemática, por exemplo em relação ao exemplo de peixes, aqui está a equação matemática -

[Custo da venda de peixe na cidade B & # 8211; Custo da compra de peixe na cidade A] = 20.

Se houver um desequilíbrio na equação acima, então, essencialmente, temos uma oportunidade de arbitragem. Em todos os tipos de mercados e # 8211; mercado de peixe, mercado agropecuário, mercado de câmbio e mercado de ações, tais oportunidades de arbitragem existem e são governadas por equações aritméticas simples.

6.4 - A arbitragem das opções.

As oportunidades de arbitragem existem em quase todos os mercados, é preciso ser um observador afiado do mercado para detectar e lucrar com isso. Normalmente, as oportunidades de arbitragem baseadas no mercado de ações permitem bloquear um determinado lucro (pequeno, mas garantido) e levar esse lucro independentemente de qual direção o mercado se mova. Por esta razão, os negócios de arbitragem são bastante favoritas para os comerciantes intolerantes ao risco.

Gostaria de discutir aqui um argumento de arbitragem simples, cujas raízes estão no conceito de "Parceria de chamada de chamada". Vou ignorar a discussão sobre a teoria da Paridade de Chamada, mas, em vez disso, saltei para ilustrar uma das suas aplicações.

No entanto, eu sugeriria que você assista esse lindo vídeo da Khan Academy para entender a Parceria Put Call -

Assim, com base na Paridade de chamada de chamada, aqui está uma equação de arbitragem -

Long Synthetic long + Short Futures = 0.

Você pode elaborar isso para -

Call ATM longo + Short ATM Put + Short Futures = 0.

A equação afirma que o P & amp; L após o termo em virtude de ter um longo e curto futuro sintético deve ser zero. Por que essa posição deve resultar em um zero P & amp; L, bem, a resposta a isso é atribuível à Paró de Chamada.

No entanto, se o P & amp; L é um valor não zero, então temos uma oportunidade de arbitragem.

Aqui está um exemplo que irá ajudá-lo a entender isso bem.

No 21 de janeiro, o lugar Nifty era em 7304, e os Nifty Futures estavam negociando em 7316.

As 7300 CE e PE (opções de ATM) estavam sendo negociadas em 79,5 e 73,85, respectivamente. Observe que todos os contratos pertencem à série de janeiro de 2018.

Passando pela equação de arbitragem acima indicada, se alguém executasse o comércio, os cargos seriam -

Long 7300 CE @ 79.5 Short 7300 PE @ 73.85 Short Nifty futures @ 7316.

Observe, as duas primeiras posições juntas formam um longo longo sintético. Agora, de acordo com a equação de arbitragem, ao expirar, as posições devem resultar em zero P & amp; L. Vamos avaliar se isso é válido.

Cenário 1 - Vencimento em 7200.

O 7300 CE expiraria sem valor, portanto, perdemos o prémio pago, ou seja, 79,5. O 7300 PE teria um valor intrínseco de 100, mas como somos curtos em 73,85, o resultado líquido seria 73,85 - 100 = -26,15. Nós somos curtos em futuros em 7316, o que resultaria em um lucro de 116 pontos (7316-7200). O resultado líquido seria de -79,5 - 26,15 + 116 = +10,35.

Claramente, ao invés de uma recompensa de 0, estamos experimentando uma P & amp; L não positiva positiva.

Cenário 2 - Vencimento em 7300.

O 7300 CE expiraria sem valor e, portanto, perdemos o prémio pago, ou seja, 79,5 O PE 7300 expiraria sem valor, portanto, conseguimos reter 73,85. Nós somos curtos em futuros em 7316, o que resultaria em um lucro de 16 pontos (7316 - 7300) O resultado líquido seria de -79,5 + 73,85 + 16 = + 10,35.

Cenário 3 - Caducidade em 7400.

O 7300 CE teria um valor intrínseco de 100 e, portanto, o resultado seria de 100 a 79,5 = 20,5. O 7300 PE expiraria sem valor, portanto, conseguimos reter 73,85. Nós somos curtos em futuros em 7316, o que resultaria em perda de 84 pontos (7316 - 7400) O resultado líquido seria 20,5 + 73,85 e # 8211; 84 = + 10,35.

Você pode testar isso em qualquer valor de expiração (em outras palavras, os mercados podem se mover em qualquer direção), mas é provável que você desembalhe 10,35 pontos, após a expiração. Gostaria de enfatizar isso novamente; essa arbitragem permite que você faça 10,35, após o término do prazo.

Aqui está a estrutura de recompensa em diferentes valores de expiração -

Interessante, não é? Mas qual é a captura que você pode perguntar?

É preciso ter em conta o custo de execução deste comércio e descobrir se ainda faz sentido adotar o comércio. Considere isto -

Corretora - se você estiver negociando com um corretor tradicional, então você será cobrado em uma base percentual que irá gastar seus lucros. Então, por um lado, você faz 10 pontos, mas você pode acabar pagando 8 a 10 pontos como corretora. No entanto, se você fizesse esse comércio com um corretor de desconto como a Zerodha, seu ponto de equilíbrio sobre este comércio seria em torno de 4-5 pontos. Isso deve dar-lhe mais motivos para abrir sua conta com Zerodha ☺ STT - Lembre-se de que a P & amp; L é realizada após a expiração; daí você teria que levar adiante suas posições para expirar. Se você tiver tempo em uma opção de ITM (o que será), então, após o vencimento, você terá que pagar um STT robusto, que também irá gastar seus lucros. Por favor, leia isso para saber mais. Outros impostos aplicáveis ​​- Além disso, você também deve atender ao imposto de serviço, imposto de selo, etc.

Portanto, considerando esses custos, os esforços para transportar um comércio de arbitragem por 10 pontos podem não ter sentido. Mas certamente, se a recompensa fosse algo melhor, talvez 15 ou 20 pontos. Com 15 ou 20 pontos, você pode até manobrar a armadilha STT, colocando as posições imediatamente antes da expiração; embora ele se separe de alguns pontos.

Key takeaways deste capítulo.

Você pode usar as opções para replicar o pagamento de futuros. Um sintético replica longamente a recompensa de longo prazo. Simultaneamente, a compra de ATM e a venda de ATM Put cria um longo sintético O ponto de equilíbrio para o longo sintético é o ATM strike + premium líquido pago. Uma oportunidade de arbitragem é criada quando Synthetic longo + futuros curtos produz uma P & amp; L não positiva após a expiração Execute o comércio de arbitragem somente se o P e L após a caducidade tiverem sentido depois de contabilizar as despesas.

99 comentários.

Parece muito legal. mas você pode explicar quando é a condição certa para entrar no trade & # 8230; Qual é o parâmetro que eu preciso considerar antes de entrar neste comércio?

Mahesh, você vê isso ... você o executa !. Não há nada como uma condição ideal para esta estratégia.

seu pressuposto de que, em 7389, um bom futuro e no valor de 7400PE @ Rs.80, o 7400CE não pode ser de 127 Rs. Será praticamente 69 Rs. Você está calculando o lucro / perda em vários níveis de cadência de expiração. No cenário um, você está calculando 227 como perda. enquanto em caso de futuro a perda seria de 189. No cenário 2 você está calculando 27 como perda. enquanto em caso de futuro o lucro deve ser de Rs. 11. No cenário 3 você está calculando 0 como lucro / perda. Considerando que, no caso de futuro, o lucro seria de 38. No cenário 4 você está calculando 173 como lucro, enquanto no caso de futuro o lucro seria 211.

Então, no caso de uma estratégia futura sintética, o P / L é sempre o mesmo sempre que o nifty expirar. Gostaria de tomar nota do mesmo e reverter se estou enganado. Obrigado.

Por que você acha que o CE não seria 127 e por que 69 especificamente? Lembre-se de que a estrutura de recompensa de longo sintético é semelhante ao ponto de equilíbrio do futurs @ it & # 8217; Eu sugiro que você baixe o Excel e trabalhe com os números para obter mais clareza.

Muito pobre Sr. KARTHIK RANGAPPA, Vergonha no time do time Zerodha. Você pode me mostrar qualquer tela de negociação a qualquer momento na história do mercado de ações ou no futuro, quando NIFTY FUTURES negociando em 7389, a taxa do 7400CE para ser 127 e 7400PE para ser 69. VOCÊ OLVIDOU A FÓRMULA QUE PÔR PRIMA DE QUALQUER GOLA + NIFTY FUTURES DEVE SER IGUAL AO PREÇO DE HISTÓRIA + PRIMEIRO DE CHAMADAS. Sempre que houver algum desajuste, a oportunidade de arbitragem surge e imediatamente encavida por algum comerciante.

Eu sugiro que você baixe o Excel uma vez e examine os valores uma vez antes de concluir as coisas. Obrigado.

com 0% de risco, podemos ganhar lucro em opção?

Sem risco, sem retorno! No entanto, você pode minimizar o risco usando estratégias como Synthetic Long.

Se a opção de chamada nifty tem premium rs.1, então, quanto dinheiro é necessário para um lote curto.

As margens para escrever opções geralmente são as mesmas das margens exigidas para os futuros. O valor premium não é realmente considerado.

o que é divertido para um ganho de 10 a 20 rupias investindo margem de 2 lotes, ou seja, 1 para venda futura e 1 para put sell. appx cerca de 90000 a 1 lacs.

Bem, muitos comerciantes profissionais gostam de negociar onde há visibilidade completa sobre o risco de queda mesmo que a recompensa seja limitada.

quando o módulo de estratégia de opções estará disponível em formato pdf, como outros módulos estão disponíveis?

Quantos mais capítulos são deixados?

Rohan, o módulo está em progresso. Suponho que outros 8 capítulos tenham lugar. Uma vez feito isso, teremos os PDF prontos.

Muito, muito obrigado por você para tirar dúvidas sobre a venda de opções.

Claramente, faz sentido comprar uma opção quando o prémio é menor e a opção de escrever quando o prémio é elevado.

A questão é como se executa o comércio de paridade simultaneamente em todos os futuros do CE PE n. Eu significo que flutuações ocorrem em milissegundos.

Existem poucas oportunidades que existem por alguns mais de alguns segundos. Eu acho que é melhor se você pode executar um programa para acompanhar isso.

Algumas pequenas correcções na folha de Excel carregada.

Célula C7 mencionando como "Short PUT (OTM) & # 8221; Eu acho que precisa ser & # 8220; Short PUT (ATM) & # 8221;

Cell G15 mencionando como "PE_IV (OTM)" # 8221; Eu acho que precisa ser & # 8220; PE_IV (ATM) & # 8221;

Célula C37 mencionada como & # 8220; LS & # 8211; IV (ITM) & # 8221; tem que ser & # 8220; CE_IV (ATM) & # 8221; com a definição adequada na célula D37.

Célula C39 mencionada como & # 8220; HS_IV & # 8221; tem que ser & # 8220; PE_IV (ATM) & # 8221; com a definição adequada na célula D39.

Na guia & # 8220; Sintetizado Call with Futures & # 8221;

Célula C11 mencionando como & # 8220; Long Futures & # 8221; tem que ser & # 8220; Short Futures & # 8221;

Cell G15 mencionando como "PE_IV (OTM)" # 8221; Eu acho que precisa ser & # 8220; PE_IV (ATM) & # 8221;

Célula C37 mencionada como & # 8220; LS & # 8211; IV (ITM) & # 8221; tem que ser & # 8220; CE_IV (ATM) & # 8221; com a definição adequada na célula D37.

Célula C39 mencionada como & # 8220; HS_IV & # 8221; tem que ser & # 8220; PE_IV (ATM) & # 8221; com a definição adequada na célula D39.

Tudo fixo, obrigado por apontar isso 🙂

Senhor, não é uma calandra espalhar uma espécie de arbitragem, então ... manchamos o preço de 2 datas de caducidade diferentes ... vendemos a expiração do mês atual e compre o mês distante.

Sim, a CS é uma arbitragem baseada no tempo, de fato a técnica de arbitragem mais popular.

Uma vez que a margem necessária para a venda de opções é igual à dos futuros e não ao prémio. Então, selecionando qual preço de exercício produz o lucro máximo para o vendedor de opções, se é profundo otm, otm, ATM, itm ou deep itm.

Quanto mais você se afastar do caixa eletrônico, maior será sua segurança e menor será o lucro. Cabe a você identificar um ponto doce e escrever essa opção. Eu sugiro que você use a técnica de Distribuição Normal para identificar as greves.

A margem de opções de venda difere da greve greve. Ele reduz como sair do ITM profundo para ATM e OTM e Far OTM.

Senhor, qual é a vantagem de apenas sintético longo? por isso, estamos perdendo e ganhando lucros ilimitados. Apenas uma chamada longa é ter lucro ilimitado e perda limitada. Eu acho que é aconselhável usar com um futuro curto para obter vantagem da arbitragem como você explicou?

Em segundo lugar, para maximizar o lucro, a diferença entre o preço de exercício e o preço futuro deve ser maior e menor no prêmio do CE e PE deve ser mínimo. (preço futuro de preço-exercício - (premium premium premium) = 7316-7300 & # 8211; (79.5-73.85) = 16 & # 8211; 5.65 = 10.35)

Então, significa que quando o preço futuro for no meio do preço de exercícios dois, o retorno pode ser o máximo. pl. corrigir.

Por si só, o Synthetic Long é apenas como futuros. Mas você pode usar isso para identificar e estruturar um comércio de arbitragem (conforme explicado no capítulo). O cálculo que você mostrou é algo semelhante e # 8230; leva à identificação de P & # 038; L máximo.

Aproximadamente, quase para todas as opções astutas, o prémio era aproximadamente rs.35000. Então, em uma tendência, me sugira se é sábio escrever uma opção profunda e colecionar grande prémio em comércio único ou.

Vender opção de atm para cada 100 queda, em seguida, sair da posição e escrever a próxima opção de ATM e depois sair e assim por diante fazendo quando o comércio dura.

Ou se o prémio diminui mais rápido em otm ou otm profundo.

Por favor, me dê uma opção de negociação mais lucrativa.

Veja, infelizmente, não existe uma estratégia que se adapte a todos, todos têm perspectiva de recompensa de risco diferente e, portanto, o que funciona para mim nunca funcionará para você ou vice-versa. Negociar exige muita experimentação, eu sugiro que você mantenha esta experimentação com pequenas quantidades de dinheiro que você pode perder.

Por favor, guie. Tomando um exemplo de mercado real.

O índice IDBI Spot é de 55,90.

Feb futuro 5,2% de desconto 52,9.

Março de futuro 8,9% de desconto 50,85.

e se eu comprar março fut @ 50.85 e vender imediatamente o Feb Future @ 52.90.

até o dia de expiração de fevereiro, estou seguro ... Não pode acontecer nenhum lucro ou perda ... como coberto de lado curto e longo ...

Mas o que acontecerá no prazo de validade?

Como a expiração de fevereiro deve acontecer com a taxa spot que é muito maior que o futuro de feb?

Que estratégia posso usar para mudar no dia de validade e bolso a diferença entre esses dois futuros.

Guia Pls. Precisa entender o que está acontecendo aqui ...

No dia da expiração em fevereiro, os futuros do ponto e da feira convergem para um único ponto, isso não garante a convergência dos futuros de março, então isso é um pouco complicado. Eu sugiro que você aguarde por algum tempo, vou discutir os spreads de calendário e a técnica para fazer isso em algum momento.

Senhor, podemos selecionar uma greve da ITM para um comércio de arbitragem # 8230; & # 8230 ;.

É melhor fazer com ATM, mas você poderia dar uma chance com ataques de ITM.

Existe algum software automatizado que me permita conhecer a oportunidade de arbitragem ao vivo. Porque os preços do EOD podem ou não ser relevantes no dia seguinte. Se disponível, qual será o custo aproximado. Ou qualquer informação sobre quem vende esse software. Usar Excel e nseindia não serão de grande utilidade porque os preços estão muito atrasados.

Lakshmi & # 8211; não tenho certeza de quem fornece isso. Se você está familiarizado com a codificação, você pode criar isso sozinho muito facilmente usando as APIs do Kite Connect e # 8211; https://kite. trade/docs/connect/v1/

senhor, o que é essa pipa é diferente do comércio zerodha que atualmente estamos usando em nossos celulares se for diferente e avançado como podemos usar em celulares, por favor, esclareça mydoubt.

Sugiro que você use o aplicativo Android Kite (que será lançado em breve) para experimentar a diferença 🙂

O aplicativo kite contém bo & amp; co order type with trailing stoploss. Se sim, torna o comércio móvel fácil e eficiente.

Não a partir de agora, mas, eventualmente, isso acontecerá.

Muito obrigado por tirar minhas duvidas sobre a escrita de opções.

Enviei um pedido de amizade para você no Facebook. Fico feliz se você aceitar.

Eu não sou tão ativo no FB, mas você certamente pode me procurar no Twitter, lidar com @ZVarsity. Obrigado.

Desde que eu aprendo no módulo de futuros, a futura posição do MTM fecha diariamente e as ofertas do corretor no dia seguinte.

Então, no futuro, podemos obter benefícios de abertura ou desaceleração, já que obtemos benefícios no mundo das opções.

Não há MTM em opções!

Isso significa que nós estamos negociando no futuro, não podemos obter benefícios de gap up / gap down.

Gap para cima ou para baixo é um aspecto direcional, você vai se beneficiar disso. Nos futuros você vai experimentá-lo via MTM e em opções o Delta vai fazer o truque para você.

Se eu vender um futuro inteligente em 7500 na segunda-feira e na terça-feira, o mercado abre às 7400 e, ao abrir, fecho minha posição. Então, posso obter o benefício de rs.100. São 100 * 75 = 7500 por lote.

Sr. Karthik, li quase todos os seus módulos e, sem dúvida, você está fazendo excelentes explicando em & amp; outs of stock market em detalhes. Eu realmente aprecio seus esforços. Mas tenho uma dúvida. Na configuração de arbitragem, Cenário 1: Nifty expirou 7200. Significa o nifty spot 7200. Você considerou que nós futuros Nifty curtos em 7316 quando o Nifty spot era 7304, significa que há 12 pontos de diferença no preço de Futuros. Quando você considerou nítido fechado em 7200, você subtraiu Nifty spot price, ou seja, 7316-7200 = 116. Mas quando o ponto é em 7200, os futuros devem ser de 10 a 12 pontos a mais. Considerando os futuros Nifty 10 pontos mais, a equação final para P / L se tornará assim: -79,5 - 26,15 + (116-10) = 0,35. O que parece inútil. Por favor, guie se estou pensando errado. Obrigado.

Após a expiração, o preço à vista e o preço dos futuros sempre convergirão, daí a arbitragem funciona 🙂

Senhor, o que há de errado se eu optar pela chamada OTM sintética com o futuro? Diga Corrente Sim O Futuro do Banco é 1157 & amp; 1200 strike CE AND PE É 7.2 E 54.5 RESPECTIVAMENTE. aqui Long Synthetic long + Short Futures = 54.5-7.2-43 = 4.3. . Não está oferecendo qualquer oportunidade de arbitragem? Você falou com apenas ATM a este respeito. Por favor, explique Sir & # 8230; ..

O truque é garantir que você esteja completamente protegido dos deltas quando você inicia a posição. Com os caixas eletrônicos, o call delta negar a colocação de deltas. Mas com OTM não vai.

Após 2 sessões de negociação, o futuro é 1152 em comparação com 1157. 1200 CE & # 8211; 5,00 em comparação com 7,2 e PE 8282; 38 em comparação com 54,5. Senhor, qual a lógica por trás disso?

Lógica como dentro? Para que os prémios variem?

Olá, obrigado por explicar essas estratégias de maneira tão simples. Basta ter uma consulta sobre arbitragem & # 8211; Uma vez que a BankNifty possui um contrato de opções semanal, assim, a data de hoje, ou seja, 11 de agosto de 2018, o BankNifty 11 de agosto será expirado hoje. Suponha que, de acordo com sua estratégia, comprei um monte de CE no preço de exercício de 18600 (ATM) e venda muito PE no mesmo preço de exercício e também no curto prazo da Banknifty. Agora, o futuro vai expirar no dia 25 de agosto, então, se eu executar os negócios acima, as opções serão expiradas hoje, mas se eu terminar meu comércio futuro também vai me dar o mesmo resultado? Espero que a minha pergunta seja clara para você 🙂

Manoj, se você estiver executando isso com a intenção de capturar uma arbitragem, então é importante fechar todas as posições na data designada & # 8211; que neste caso passa a ser a caducidade semanal do Banco Nifty. Então você conseguiu compensar a posição de futuro nesta data também.

Obteve & # 8230; obrigada uma tonelada.

Oi Karthik, uma pequena dúvida,

Será que o salário será o mesmo se fizermos o inverso desta estratégia como (futuros sintéticos curtos + longos)

onde como sintético curto = curto CE e PE longo. ISSO É POSSÍVEL. Corrija-me se eu estiver enganado.

Sim absolutamente. A recompensa será aí, desde que exista uma oportunidade de arbitragem. Sintético longo = longo CE + PE curto. Sintético curto = Long PE + CE curto.

Caro senhor, se eu vender futuro da próxima série e comprar este futuro da série. Posso manter a diferença premium no final do prazo. Quais são as desvantagens desta estratégia.

Você pode manter o prémio desde que haja um caso para ele. Desvantagem é o risco de execução.

1) Se ao usar estratégias de opção minha recompensa líquida é 0 ou - ve, as taxas de STT também seriam aplicáveis?

2) O STT é o mesmo no caso de futuros?

Essa estratégia só funciona após a expiração & # 8230 ;.que, se decidimos colocar a carcaça antes do prazo de validade?

Você pode optar por usar o sq off anteriormente e reservar seus lucros ou prejuízos.

Por favor, explique a borboleta de ferro e condor com o exemplo. Não consigo encontrar nada na varistência, no entanto, foi mencionado na orientação que explicaremos.

Will try and add those chapters soon. Obrigado.

These are the last lines in the above chapters.

“So considering these costs, the efforts to carry an arbitrage trade for 10 points may not make sense. But it certainly would, if the payoff was something better, maybe like 15 or 20 points. With 15 or 20 points you can even maneuver the STT trap by squaring off the positions just before expiry – although it will shave off a few points”

For options we can exit by buying back the sold share or selling the already bought share just before few minutes of the expiry to get off the STT trap but however how can we exit from the futures contract? As it will end on the expiry day itself. So what I understood by your words “although it will shave off a few points” is because of the futures contract we cannot alter/change/modify/exit. Is my understanding in both the points right? Please clarify.

You can exit all derivatives positions before expiry if you wish too. However, it certainly makes sense to exit the ITM options before expiry for reasons stated here – zerodha/z-connect/queries/stock-and-fo-queries/stt-options-nse-bse-mcx-sx.

But do note, futures position is not affected by STT. So you can continue to hold them to expiry.

Today I stimulated arbitrage in nifty and as per excel sheet it is showing 19.4 as pay off then what will be the total amount of profit after costs considering m a zerodha client brokerage.

And how much margin required?

can you help to make exel sheet for USDINR OPTION.

We have put out the excel sheets already.

Is there any way I can buy and/or sell more than one CE or PE at the same time using Kite Web or Kite Android? por exemplo. buy one ATM Call, sell one ATM put and sell one future in a single order or do I have to do it one after the other?

Agradecimentos e cumprimentos

I’m afraid you will have to do it sequentially.

You can use 3-Leg order on Zerodha Nest Trader Software.

Hmm, I need to check up.

is it a good strategy to long future of nifty and sell corresponding call and vice versa as strategy equivalent to stock backed call or will it be naked risky to do so.

Regards and thanks,

Naked options are always risky. If you are not willing to expose yourself to so much risk, then yes, hedging is a good practice.

Thank you very much for reply.

An ITM option will always expire at a price lesser than the intrinsic value. So arbitrage won’t work.

It will be settled at IV, but accounting for STT and charges, it will be lesser than IV.

Sir is it possible to create an arbitrage opportunity by entering into Call, Put and Futures at different points of time? For example, the option prices are always high in beginning of contract so short the put option then, and as time passes, buy call option and futures at a lower price? Would that be possible? I know that it is not possible to predict option movements, but what do you think of this sir?

Desde já, obrigado.

Yes, in fact, there is something called as a box strategy, involving 4 option legs which mimic 2 futures trades. Sort of an arbitrage, do check it out.

First of all, thanks for the reply sir. From what I understand, it is possible to create an Arbitrage opportunity and that the box trading system is a limited and risk free profit strategy. May I ask, what are some others strategies like this one, or which book deals with them?

Yes, the risk in box is execution risk. Assuming you execute the trade at the right prices, you can capture the risk-free profit. I’d suggest you take a look at Option pricing and Volatility by Sheldon Natenburg.

Sir that was a fascinating book and thanks for the recommendation. I have two questions 1.Have ever executed the box strategy and what can you say about that? 2. If we manage to convert it into an automated trading system, it would be like you said, a money machine, or am I missing something?

Well, automation needs exchange approvals 🙂

Sir thank you so much for pointing me toward option volatility and pricing, it was a treasure. I have developed a trading system based on Box strategy. However, I have not done this before and am having problems with backtesting the same. What do you suggest I do now? Desde já, obrigado.

Backtesting is essential, otherwise, it’s like driving a brand new car, without knowing where the gearbox or breaks are. So do backtest or at least get an insight into its behavior. In the worst case, take it live, with small quantities and scale it over time.

Sir about Box Spreads. Have you ever been able to successfully execute it? Also, can you give me some pointers regarding the execution of Box strategy and other such Execution risk involved arbitrage strategies?

Yes, I’ve done that couple of times. Very cumbersome since it involves 4 legs. A lot of execution risk as well.

I am a great fan of Karthik Rangappa and Varsity. Tried to create a google excel sheet which will get automatically update every 1 hour to find these kinds of opportunity. If interested people can refer to https://docs. google/spreadsheets/d/15jfqSqHcdAFAY_Ca1bXL5MVtHZ42Z1fxICadzLJSaFw/edit for more information.

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Varsity by Zerodha & copy; 2018 & ndash; 2018. Todos os direitos reservados.

A reprodução dos materiais do Varsity, texto e imagens, não é permitida. Para consultas na mídia, entre em contato com [email & # 160; protected]

Option Strategy – Zerodha Trader.

Trading in Futures and Options was introduced in the early 2000’s on the NSE. Futures was more popular among the two until the market meltdown in 2008 after which the popularity of options has increased tremendously, much more than futures today. Following are the reasons which probably attributed to the increase in popularity of options on the NSE:

1. For holding a future position, you would need NSE stipulated margins which would work upwards of Rs 25000 based on what future contract you are trading whereas in options a trader with even Rs 100 in his account could take some kind of an option position.

2. Future positions have unlimited risk, whereas in option buying the risk is limited to the premium you are paying.

3. STT(Security Transaction Tax charged by the government) for Future is charged on the contract value whereas for options it is charged on the option premium. What this means is if you buy and sell 1 lot of nifty futures at 6000, the turnover generated is Rs 6lks( 3lks+3lks). STT is 0.017% of Rs 3lks which is Rs 51, whereas if you had bought and sold an option with premium Rs 100, the turnover would have been Rs 10,000(5000+5000) and STT of Rs 0.85.

4.Options offer you an ability to setup trading strategies for multiple market scenarios.

Option Strategy is a tool which we have introduced on Zerodha Trader which suggests you and helps build option strategies. Find following brief on how to use it:

1. Login to ZT and make sure you launch plus while logging in. If you don’t know how please refer this link.

2. Option Strategy tool, based on your view suggests you various option trading strategies and their payoff graphs. As an example, if my view is that nifty will stay in the range of 5800 and 6200 for this expiry(NOV 2018). First step is for you to add all the nifty option strikes in this range on your market watch, so add 5800 – 6200 Calls and puts with November expiry. Visit this blog to know how to add options onto market watch.

3. See the pic below to launch Option Strategy:

4. The following window opens, follow the steps as shown in the pic:

5. Once you give a view the tool will suggest you 5 different strategies, as shown below. For the example, my view is that nifty will stay between 5800 to 6200 for Nov 2018 expiry. My View is that market will remain neutral(that means neither bearish nor bullish) and I also feel that market will be in a very narrow range. This suggests me 5 different strategies as shown in the pic below.

6. If you are not able to see the prices in the strategy section, click on the restore button as shown below.

The window will look like below when you click on the restore button and the prices should start refreshing as the data is fetched from your market watch. So Ensure that the option contracts mentioned is available on the market watch as mentioned in point 2.

7. Follow the steps below to look at the payoff graph for the strategy you select.

8. Create ” My Strategy” using combinations of strategies suggested, as shown below and you can look at the payoff graph and payoff table. See the Pic below:

Once you have decided to take an option trade, if it involves writing options(selling options), use the Zerodha SPAN calculator to know the exact margins required. Positions like the above will have margin benefits as they are partially hedged.*

* For all of you who are beginners to option trading, assume nifty 6000 calls is at Rs 100, if you want to buy it because you are bullish you will need only the premium which is Rs 100 x 50(lot size) so Rs 5000 in premium, the maximum you can lose is Rs 5000. But when you write options i. e Sell first and then buy back, you have chances to make unlimited loss and hence exchange blocks margin similar to how they block in futures. So to sell 6000 calls of nifty first and then buy back you would need almost 30k for an overnight trade. This margin goes down for a strategy mentioned in the above pic because the various option postions are counteracting each other. You can see exact margins for option writing/multiple positions on our SPAN calculator by simulating the trade.

Yes you can trade naked options i. e buy calls/short puts if you are bullish and buy puts/short calls if you are bearish, but options as a product especially combination of nifty options offer you an opportunity to setup trades with immenese profit potential. Use esta ferramenta para ajudar a configurar estratégias de opções, estudar o gráfico de recompensa e as opções de negociação proft na Zerodha.

Sua corretora de desconto de desconto amigável.

208 comments.

very nice..its useful to like me “option trader” but the major problem is ur not give intraday exposure for option writing..

if u r given more than present condition(i don’t know. how much u r given present) we will happy to trade in option..

Madhan, we give margins for option writing(intraday), pretty high actually. You require only 40% of the overnight required margins and you can use that till 3.20pm. zerodha/z-connect/blog/view/zerodha-margin-policies.

Hi sir , for option writing in Bank nifty Weekly Options for overnight Position what is the margin required, i have checked in calulator it is showing around 41000 per lot is this the right margin for overnight Position in option writing ………..and in Upstox the intraday margin for writing options is around 15000 Per Lot but in zerodha there is 27000 Per Lot for mis Order in bank nifty weekly options .

Hey Venky, the margin requirements are defined by our RMS team based on the liquidity and prevalent market conditions. The weekly option contracts do not have enough liquidity to afford very high leverage.

It is a very simple tool, but if you still need, shoot an email with your contact info to [email protected]

How do we see the Greeks. Delta Gamma, Theta etc.

Tried everything to see them In zerodha trader but unable to bring them on.

Do u have the same in PI.

Sir am new to it, am holding a account in zerodha, I want to learn the strategy of trading plz do refer for it, to whom I have to contact.

how to do option trading in zerodha kite. i also don’t have an idea. can you please suggest me. i have a zerodha demat account.

feel like bit complicated but still looks very good tool…thank you very much n nice explanation..

Interesting tool very helpful for people like me who trade on options.

One question don’t we have a lock script option on the strategy graph? So that I can open 2 or more graphs.

No Moses, you can open only one payoff graph at a time presently.

Do Zerodha provide Span margin on options Ex:

Date=25 Jan 13 Nifty=6000.

a) What in the margin to ‘Sell 6200 Nifty Feb 2018 call’

b) What in the margin to ‘Sell 6200 Nifty Feb 2018 call’ ALONG WITH ‘Buy 6000 March 2018 call’

Yes PS, we provide SPAN margin benefit and we have a [SPAN Calculator](https://zerodha/z-connect/blog/view/span-calculator) which lets you simulate a position like what you have mentioned and also tells you the margin benefit before taking the trade.

Is SPAN calculator available on NOW.

SPAN is available only on Zerodha Trader, if you are still using NOW trading platform send a request to migrate immediately..

very complicate, i need trading call.

I am New to option. I did not understand a thing. Is there any way to get some training??

Arm, the above would be beneficial to people who have an understanding on options.. We presently don’t have content on basics of options, but we intend to start something on zconnect, so keep following.. Cheers..

If I have 1L in my trading account, can I do the following option strategy.

Sell 3 contracts of Bank Nifty March 12200 put for 290.

Buy 3 contracts of Bank Nifty March 12300 put for 340.

I want to hold the position for few weeks.

I am guessing the margin required for NRML would be around Rs 3750 (Rs 50*3*25) for this hedge.

Please tell if my thinking is correct.

Sorry, it was Rs 3750 = 50 (difference in the two contracts) X 3 (no of contracts) X 25 (lot size).

Margin required for only writing 12200put per lot is Rs 22581. If you buy the 12300 put, because you are hedging the position, the margin required drops to Rs 15900/lot for both positions together. For taking 3 such positions, you will need 45k in your account..

The way you have calculated margin requirements is wrong, that is why we have introduced zerodha/z-connect/blog/view/span-calculator, SPAN calculator where you can mention your trade and it will automatically let you know the NSE stipulated margin requirements..

Espero que isto ajude,

Thank you very much for the prompt reply.

I was wondering if you guys could open an official forum for Zerodha members so that we could help each other out instead of disturbing the faculty.

You definitely won’t be disturbing us 🙂 , But what you said makes sense, we will try to figure something out on this..

The F&O margin calculator does not have Banknifty option (weekly) expiry.

Does this mean, i can not sell / write options in banknifty weekly expiry cycle?

Pls confirm at earliest.

You can write, margin required is around the same as monthly.

after step 8 how to save ” My Strategy”, so that we can access it later directly.

Is there a way we can exercise the options in Zerodha Trader ? If so, can you please tell me how to do it ?

All options on NSE today are european now, which means you can exercise it only on the expiry day. In any case on the expiry day all options get exercised by default, so need to have this facility as long as the options are european.

I thought only the Indices were european. Isnt option trading on listed Equities American style?

In PnL (3rd screenshot in this write up) only the Net premium paid is shown and not profit potential.

1. How to check the profit potential?

2. How to add my own strategy, if not available now, please make it available soon.

3. what is the use of the button PnL on last and best, both seem to be giving the same result.

1. Profit potential if you are checking for option buying positions is typically unlimited and hence won’t show on PNL, If you are using short options or any strategy where there is a maximum profit potential, it will show in PNL.

2. If you see on the 4th Snapshot, there is an option to add to my strategy.

3. Last is basically the last traded price and best is basically the best available price. If both are the same, the result will show the same.

1. In the payoff graph, and pay off, break even is missing, which is a key factor in determining which strike price to be taken for trade.

2. The pay off graph is not showing the pay off in between the strike price, say nifty at 5923, corresponding pay off is not showing, which is also vital.

Regarding your point 2 (add to my strategy), what I meant was to put my own strike price and check the outcome, for example 5800 and 6000 strike of nifty, whereas in your strategy only the nearest strikes are bundled together, like 5900 & 6000 strike price of nifty.

Abrar, Feedback taken, let me bounce it off my tech team and see how much time they will take to sort this.

Also there is a error in bearish strategy, instead of market wont fall, it should be market wont rise. please check all of the errors and whole strategy thoroughly once, strange that no one has pointed out these things even after yr strategy has been online for such a long time..

I want to sell one lot 9400 put and one lot 10800 call. when I checked the span margin it was rs.37048. Is this for intraday or shall i carry till expiry… If that is for intraday, how much should i have to carry til expiry?

If you are looking at the SPAN calculator for this by entering product type as NRML, this will be for overnight position and to hold till expiry.

If you are checking this with product type as MIS it will be 40% of the required overnight margin for intraday only.

Kindly go through the following scenario:

Nifty trading at 5310 then took Iron Condor as follows:

Sell to Open 5300 CE 5300 PE.

Buy to Open 5500 CE 5100 PE.

After couple of days nifty moved to 5625, if the client want to take new Iron Condor position By Sell to open 5500 CE and 5500 PE.

And Buy to open 5700 CE and 5300 PE.

Then the existing 5500 CE Long position will be offset?

Yes Sreejith it will be, you cannot hold opposite positions of same contract on a single trading account..

If I want to write 5800CE with 40 premium, minimum how much margin I need in my account?

around 20k, you can also check this blog on how to use the SPAN calculator.

Is there any difference between option writing and short selling?

Short selling and option writing are definitely very different from each other.

Short Selling: This happens when you sell an asset which you don’t own with the hope that you can buy it back at a lower price later since you expect the price of the stock to go lower. In equities, this can be done only on an intraday basis. For Futures, you can sell and hold until expiry by paying the margin amount for holding that short position.

Option Writing: This is totally different from short selling because you’re earning a premium from the buyer of the option which gives him the ‘right’ to buy or sell an asset at a given price on a later date if the strike price is achieved. Option writers may not necessarily own the asset but they still take on the obligation to deliver the asset if the conditions are met for which they receive a small premium from the buyer of the option.

Dear Zerodha team,

I cannot see the implied volatility figures for options. The pop up window shows all values as zero. Any solutions ?

The pop up window shows Zero, but to calculate the IV you can first add the contract on the marketwatch and click Shift + o, this opens up an option calculator window where you can calculate the IV.

Most of brokerage house around take FD as a collateral , I don’t understand why zerodha does not take FD, when nse has allowed FD’s as collateral.

I bought NIFTY options for 6300PE @ 120 and want to sell them at 134 premium. How can I sell the lot I bought back at 134? Do I need to open a sell order for that or can I simply square-off the position like in equity?

Ramesh, you can do it 2 ways.

1. Open a new sell order button and mention your price or sell it at market.

2. Go to Admin positions and click on the open position and say square off, this will sell it at market.

Thanks Nithin for the reply.

I went to Admin positions and selected the position, but I don’t see any option as Square-off there. Could you tell me where is it located in that page? Or is it not visible during off-market hours? Pls clarify..

Is there a cost to NestPlus?

The starter pack is free of cost which includes option strategy, charting, and more. There are certain products on Plus which are paid, you can see more here: https://plus. omnesysindia/NestPlus/Home/

sir intraday option best strategy.

I have never traded a option but i want to do some trade in it. take the example of today as market were constantly rising in that condition what option i have to buy or sell? For example Nifty 7500CE was trading at around 200 in morning. So to have profit shall i buy call or put option? And i know call is like long and put is like short position. So if market is bullish i shall buy call and if market is bearish i shall sell puts? Am i correct?

I am actually having a big doubt among the 4 thing-:

Long Call Option.

Long Put Option.

Short Call Option.

Short Put option.

is long call and short put same?

is long put and short call same?

And one more thing lets say Nifty 7500CE is trading at 200 then what margin i require to have a long position? Is it 200×50 which equals to 10000?

Please clarify my doubts in your free time.

Phew, you are starting at the very basic. I’d suggest you to read this once, I’d suggest you to read the equity derivative modules on this link.

Coming back to your question,

1. If you feel market is going up.

Buy Calls, if the market goes up, premium will ideally go up and you can profit. But there are days when market could go up but calls premium could loose you money when the implied volatility drops, for example today, even though market is up call premiums are down. When you buy calls, profits are unlimited but the risk is limited to the premium you pay.

You can Short puts, when market goes up, put values will come down and hence if you are short puts you can profit. When you short options, the risk is unlimited and profit is limited to the premium you receive when you short the option. Since the risk is unlimited, a margin is blocked in your trading account similar to futures.

2. Similarly if you feel market is going down.

Long calls and short puts, ideally will make you profit when market goes up, but they are completely different in terms of how you make money and similarly with long puts and short calls.

As explained If you want to buy 7500 CE when trading at 200, you need to have 200×50, but if you want to short 7500CE there is a margin required, which you can calculate using our SPAN calculator.

i am new to this field , the link which you have provided doesnt have any pdf, which can explain options and its characteristics. wish to know, is there any good material available, and if possible can you provide that.

Have you checked out Varsity? Our education initiative, has become quite popular. zerodha/varsity/

Hello sir please make me understand Buy price and buy average price and how is buy average price related to settlement price and why it changes on daily basis of options?

Confused with your question Praveen. If you buy 1 lot at Rs 50, your buy price will show 50 and buy average price will also show 50. If you buy the second lot at Rs 100, your quantity will show 2 lots and your buy average price will now show 75, which is the average of 50 and 100.

Buy average price has no relation to settlement price, can you be more specific.

sir i bought 1 lot of Nifty 7300 CE at 75 yesterday and sold it today at 82 but in my admin position it was showing Buy average price as 82.55 and there by it is showing a loss of 27.5.

I mailed to Customer care and they told me that daily settlement prices changes everyday.

Actually i m new to option trading and i thought i will make a profit of (82-75)x50= 350 but i made a loss of 27.5 instead of selling at 7 Rs higher. I just cant understand how my buying Average price shoot upto 82.55 although i bought only 1 lot of Nifty at 75 and squared it off at 82.

If m wrong somewhere then sorry but please make me understand the above.

On the trading platform, your profits for today will show based on the closing price of the options for yesterday and not based on your buying price and this is the reason you are seeing a loss and not profits on the platform today. There is nothing to worry, you are actually in profits, to know your exact P&L based on your buying price visit our backoffice. The backoffice will get updated end of everyday, so your trades executed today won’t show up on this, but if you check the open positions tab it will show your correct buying price.

sir i want to ask one small question is there daily settlement price in option too?

Just like futures lets say i bought and hold Nifty 29 May future at 7300 and lets say that day Nifty future closed at 7320 so i will be credited 20×50=1000, Similarly is there daily settlement in Options too let say i bought and hold Nifty 29 May 7200 CE at 100 and that day nifty 7200CE closed at 80 will i be debited 1000?

No there is no daily settlement on buy option positions, so if you bought on 29th May Rs 5000 will get debited (@100) from your account and when you sell at 80, Rs 4000 is credited to your account. If it is done on an intraday basis, Rs 1000 gets debited at end of the day.

Hello sir i want to ask one question. What happens to the value of option on expiration date? Does it becomes completely zero. Actually i have been holding a nifty 7300 CE at premium of 56. So shall i sell it or wait till expiration date. If the price becomes zero at expiration then i will sell tomorrow only. So kindly tell me.

Praveen, whatever value above 7300 Nifty closes on Thursday the expiry day, will be the value of your calls. If Nifty closes at 7400 it will be 100 and if it closes below 7300 it will be 0. Where will the market go is your call to make, but you can sell the calls whenever you want, there is no need to wait till expiry.

Sir I want to know about this…

Suppose I have bought 8400CE @20 on October 29 contract. And I want to hold this till expiry. Then on expiry should I sell the contract or it will be sold automatically. And also want to know on expiry if nifty close on 8500 …what will be the value of the position and if nifty close 8300 then what will be value of the position I hold.

If you don’t sell, it will get squared off automatically. If it closes at 8500 your option will be worth 100, at 8300 it will be worth 0. But do check this post, explains how STT charged is so much more for in the money expired options, it is best to square off all options that have any value to it in the market on expiry day.

just awesome. i was looking for this .. count me in. my number 9000083000.

i am already client will transfer funds today. but please make sure how i can start this setup.

I am completely new for trading registered few days back on zerodha platform want to clear few doubts regarding Option Trading,

1– Is it possible to buy option NIFTY PE 8100 in morning or in noon on Intraday basis and sell it on Next day when there is possibility of further increment ?

2—What will be the difference between if in Product Code I select MIS and NRML in terms of validity ?

3—When my desired price target is achieved then for selling my earlier purchased Option NIFTY PE 8100 what should I do ?

Please help me out with these basic things I hope I will learn it with time on this platform.

1. Yes, you can but the option and sell the next second itself or anytime before the expiry date of that contract.

2. If you are buying options, you rather use NRML as there is no additional margin you get by using MIS. If you buy using NRML you can hold it till end of expiry, if you buy it as MIS, it gets squared off at 3.20pm.

3. Similar to how you placed a buy, just place a selling order at whatever price. YOu can also go to the admin positions link, and click on the square off option.

What is the volume impact on Price of say a 100-lot (5000 contract) trade of Nifty 8000CE if i want to buy at the open and fill the order immediately.

Similarly, if have bought this quantity as an MIS order, at what price will it square off at close – will there be a volume impact on price on this side as well?

100 lots on Nifty can have an impact of upto around 1 point on the Nifty. At the market opening it is quite tough to call, it might sometimes be in your favor as well because of the higher volatility. At 3.20pm, when MIS is getting squared off automatically, there can be an impact of upto 1 point again.

Just want to confirm, If I trade a hedge strategy where my maximum loss is predefined, and I want to be in strategy till month end. Does Zerodha does autosquare off incase of heavy moment.

If I buy a Unitech Future for October @ 20.00 and simultaneously buy Unitech October 20 put say @ 1.55.

In this case my max loss would be 1.55*17000.

So incase like last week there is 20 % moment and unitech is down suddenly to 18 or below or say even upto 15….would my positions be auto square off…

If I buy a Unitech Future for October @ 20.00 and simultaneously buy Unitech October 20 put say @ 1.55 and sell unitech 25 call @ 0.40.

In this case my max loss would be 1.15*17000.

So incase like last week there is 20 % moment and unitech is down suddenly to 18 or below or say even upto 15….would my positions be auto square off…

Amit, we understand that this is a hedged position and won’t square the positions off intraday. But, the profits from your options(notional) can’t get adjusted with the loss on your futures (MTM), and if there is not atleast the minimum stipulated SPAN margin in your account, the positions will be squared off. If we don’t square off, the exchange would also charge a short margin penalty.

Thanks Nitin, If you give time say next day I can add margin, also would like to know more about opening an account..is there a contact person.

Also, are there any charges for pledgeing in and out shares…there are few who charges and few dont..just want to be clear..

You can send an email to [email protected] with an account opening query with your contact details. Someone will get back to you asap.

The entire pledge/unpledge costs around Rs 55/scrip.

If I place following order, what would be my brokerage for following order and can I place this combined order at one go at market price.

Buy Nifty future 1 lot.

Sell Nifty 8000 call 1 lot.

Buy Nifty 7800 put 1 lot.

Since these are 3 different orders, it would Rs 20 x 3. You can place at once using basket order, but since they are different scrips they will be considered different orders.

Dear All You Can Register on the Above Link of NSE and a Great Way to Learn Options 😀

I was checking the brokerage calculator and had a question on the brokerage charged for options. If I buy 2 lots of Nifty calls for 25 and sell them for 30, my profit before any charges is 50*(30-25)=Rs. 250.

Taxes will be very low since taxes will applied on the premium. I had assumed the brokerage too would be applied on the premium, and hence would be 0.01%*50*(25+30)=Rs. 0.275. However the calculator is showing a flat charge of Rs. 20 per order, hence a net brokerage of Rs. 40.

How is the brokerage calculated for options?

🙂 , we would be out of business if we charged brokerage on options the way you have said. Rs 20 per executed order or 0.01% of the contract value whichever is lower. For options, the contract value is Strike+Premium * lotsize.

I am a New Zerodha account holder. I have doubt regarding Options Trading on Zerodha Web Platform.

My Initial Pay in Amount: Rs. 25000/- on 11-12-2018.

On 11-12-2018 I bought PUT 8000 (Exp: 29-1-2018) 400 Qty for Rs. 33 each and after few hours the index was going up so the PUT value decreased So I decided to sell and sold at Rs 29.75. After that I bought CALL 8700 (Exp: 29-1-2018) 300 Qty for Rs. 45 each. But, I did not sell it until now, I received your margin statement stating that I have only Rs. 21,791.66.

If I click the order book, it shows nothing, I don’t understand and What should I do If I want to buy and sell it some other day.

Please explain how to trade on your web platform. because I could not run your application on my office desktop.

Lakshman, best to send your account specific question to [email protected] with your client ID.

To see your historical trades/reports login to our reporting tool Q. You will be able to see your historical trades, P&L statements, and everything else here. On the web based platform, if you go to positions/admin positions, you will be able to see your 8700 calls there, you can either square off from there or else place a selling order directly from the marketwatch.

dear nithin sir, i am new my id RR3456. if i buy 1 lot of asian paint 860 CE @10 on 09.03.2018 and sold it @ 20 on 25.03.2018. my profit would be 10*500=5000. am i right? pls help, know nothing (what is decay in option trading)

Yep you are right. Check this section that will explain you all the option greeks. Also suggest you to look at Varsity, we will be starting a module on Options shortly.

is there any decay in stock price when i hold up to expiry date in option trading ?

Not decay in stock price, but there is time decay in options premiums for sure. Option value = intrinsic + Time value. Time value decays as and when we get closer to expiry.

Could you please tell me how many maximum lots size in nifty or nifty option, one retail trader can place order or can hold.

It is 7500 in one order.

Sir I want Software Like Option Oracle.

Is it Availble in zerodha.

I mean If I enter quote like nifty It should give all strikes of calls, puts, all expiries with greeks.

anything like same availble in zerodha?

Not now Dasari, but we are working on something.

Hi nitin it is very useful for me if you provide any free version software name like option oracle.

my option oracle is not giving strike prices.

worked fine somedays but now it is not giving any strike price.

please help me on this error.

it is more helpfull or give me any other software name as suggestion as you know.

Dasari, can’t think of any software which gives this info out. As I said, we are developing something, might take some time.

new pi downloaded.

& # 8211; day separator is good , needed it badly.

Gostaria de saber se podemos criar estratégias ao combinar futuros e opções. If yes, then that would be very very nice. Can you please let me know this part.

Can you please let me know this part. Can you email the same to me at [email protected]

Hey nithin, have a few qus,

1)There are two types of options available in the Indian market — European and American. Index options, such as the nifty and sensex, are European-style. This means that they can be exercised only on the maturity of the option.

2)How soon can I sell the stock after I exercise a call option? and how to do it , do I PUT a new contract or excersicing means I bought it and sold it as well. I’m confused? please elaborate.

3)If you exercise an option, the settlement occurs in three business days, just as if you bought or sold stock on an exchange. Por exemplo, se você exerceu uma chamada e vendeu simultaneamente as ações equivalentes de ações, essas operações se compensaram. Supondo que a opção é in-the-money, não há necessidade de publicar margem para compensar transações. Como sempre, você vai querer verificar com sua corretora para garantir que você entenda suas políticas.

4)Consider a Put 300 was bought, if at the time of expiry, market price of Reliance is Rs 320/ – , the buyer of the Put option will choose not to exercise his option to sell. In this case the investor loses the premium paid (i. e Rs 25*100 = 2500) which shall be the profit earned by the seller of the Put option. So, if cmp was 350 would the buyer still lose only the premium if yes, who does this remaining loss of (350-300) rest with. i. e.(of Rs.50 per unit) * 100 = 5000rs.

Thanks in advance and great work with Pi.

1. All options on India are now European. So they can be exercised only on expiry day.

2. Ah.. looks like you are very new. Okay, so exercising options in India has no meaning as all contracts are cash settled. Let me explain, if you buy Nifty 8500 puts at Rs 100 on say Aug 1st, you can sell it immediately, next day or any day till the expiry day of the contract. On the expiry day, if you don’t do anything, if Nifty closes below 8500 your puts get exercised automatically. If it closes above, it gets expired worthless. So you don’t have to do anything to exercise. If nifty closes at 8450, 8500 puts get exercised and u get Rs 50 for those puts. Do check out zerodha/varsity/ and the option module.

3. This is not in the Indian context. In India, like I said, everything is cash settled.

4. hmmm.. ur question doesn’t really make much sense. Advise you to go through Varsity. Start at the futures module.

Sorry , a correction in the last one ” the remaining loss of (350-330) *100 = 2000 rest with”

If a 300 put was bought, and the stock price closes anything above 300, the entire premium the put option buyer had paid will become worthless. It will not have any value.

Hey thanks for the prompt reply.

I am new to options trading.

I have just the required amount to put a butterfly spread or an iron butterfly in place for a particular stock (around 20-25k). But if I only sell options for the same my margin requirement will be quite high around 70-80k. SO, in order to take benefit of the strategy for reducing the margin what should I do first. Should I buy the options first and then sell for applying the strategy.

Should I sell first and then buy the remaining legs.

I’ll be getting the benefit irrespective of what I buy first.

The main issue is funds in my account as it is just enough to cover the exposure of a particular startegy.

Also, is there anyone in Zerodha customercare to whom I can talk regarding this?

Antriksh, you can send an email to [email protected] , we can get someone to call you back on this. But here is the way to do this, use product type as MIS (intraday), take all the positions. Now convert all of them to NRML, this way u will be able to get into the strategy with lesser margins.

I tried my level best to get hold of you with regards to your software and trading platform issues. I have begged to your team several times that when there is an issue, please communicate to the customers so that they can look for alternatives. You and your team never believes in that. For few months now, we are facing several issues and especially on Monday’s, it is a mess. Today, since morning, none of your systems , Pi, Kite, trade and nest, none of them are working and after several communication with your team, they have accepted that kite is not working. what about other softwares? whenever I made a complaint to your support team, afternoon around 3 PM they call and ask me to update the Pi. I informed them several times that I am working in IT for last 25 years and dont give me such stuff. Now, when such things happens, who is responsible for all the loss occurring to customers? please reply? I am an unsatisfied customer and now started looking for other options. I am now fully confident that “Cheap can be expensive”

Por favor, responda-me.

[…] Option Strategy Tool: A tool which suggests various option strategies based on what your views on the markets are including the payoff graphs for each of the suggested strategies. [& # 8230;]

How to calculate profit and loss of options between the series.

Sir, I would like to know if I buy 5 lots of Nifty 7600 PE at 27.65 by paying a premium of Rs 10,500 and if I square off at 25(loss). Will I lose my entire premium or just a part of my premium?

Mais uma coisa. I would like to ask you. Why am I unable to check option chain or delta of an option on Pi?

This feature not yet enabled.

So I opted for Zerodha open trade, and I figured out how the futures market works. But I see some trades such as: XYZ purchased NIFTY16JUL8400PE NFO @ ₹ 21.0, and I am unsure where actually this was traded. Because in the future index the price of Nifty July is something around ₹ 8,555 and in the option index it’s ₹ 0.40. Could you enlighten me?

You will loose 0.65 x 375.

Obrigado pela sua resposta. I will lose 0.65 *375 or 2.65*375. May I know by when we can view option chain and calculate delta of an option on Pi like on ZT?

Ah my bad, yeah 2.65*375. The option chain bit will take a little longer.

While trading in Options, in the expiry date of F& O, we had to close the positions of the particular month. If there are no bidders, even if we put 0 or.05 the option is not getting traded. In these cases whether we still had to pay the STT.

I am guessing these are all out of the money options. If it is expiring worthless, there is no STT to be paid.

Kindly advise me when options strategy can be created and traded in the current month.

1. Whether option strategy can be created on the day before expiry or even on the day of expiry.

2. Is options strategy traded on intraday basis.

3. Once option strategy is created is it possible to square off the strategy when our target is reached.

4. Once option strategy is created on the day of expiry do we need to square off the strategy or will it automatically get exercised.

There’s a detailed module on option strategies on Zerodha Varsity here: zerodha/varsity/module/option-strategies/ which you may want to go through. You can post these questions on Varsity.

Hi, NSE has launched weekly Bank Nifty options.

1. However, there is no details available when I am trying to calculate the margin requirement using the Zerodha Margin calculator. The weekly Bank Nifty Options not available in Zerodha Margin Calciulator.

2.In KITE, could not locate the BANKNIFTY weekly contracts. The weekly contracts available in PI though.

Please resolve the above two at the earliest.

It will take a few more days to support weekly contracts on kite and on margin calculator. It is available on Pi, the desktop platform.

Hi Nitin, If I take a position in BANKNIFTY weekly contract through PI, is it possible to square off the position in KITE ? Or do I have to square it off through PI ? Also, is the margin requirement same as the monthly contract (Options)

Until we offer it on Kite (a few days away), you will have to sell it through Pi itself.

You mentioned we can take weekly option positions in Pi.

However , when I tried taking position ( after reading your answer ) , it automatically enters the monthly option position – even after specifying weekly expiry. This has cost me some money as well . I have sent a mail to your support team on that note. So, Can you please clarify 2 things here ?

1. Can we trade banknifty weekly options using ANY platform of Zerodha ? If no, just for an idea , when can we expect to trade these?

2. Can you please update the users ( via mail or something ) that weekly options are not working in Pi / Kite , so that they don’t take wrong positions .

I agree that you guys provide super-easy and fast platform to trade – but on the cost of numerous operational issues, which need to be given the first priority !

Hope things get better soon ..

1. It works on Pi, if you are not able to see this, can you update the latest patch of Pi. (go to help menu, and click on check for updates)

Kite should have the weekly options in the next two to three days.

Banknifty weekly option when will be added to kite? Ppz send me a mail with details how to add it also.

We should have it up in the next two days.

Bank Nifty weekly option still not available in Kite. Your days has turned into weeks and about to turn into months and then years. Can we expect from you that you be ready with your systems from day one of product launches. NSE announced the launch of the weekly option well in advance yet you are not ready.

Please tell where i will get the margin calculator for weekly bank nifty option trading.

in regular margin calculator it has not shown please guide.

You can’t compute weekly option margin using the margin calculator. However margins will be around the same as required for the closest expiry monthly contract.

If am selling an call option first, say for nifty jun 7600 CE, price is 430 * 75(1lot). so i should have a fund for 75*430=32250 rs.

then i can buy the same before EoD for 400 per lot.

Isso é correto? will there be any extra charges.?

Check this post, explains about option writing. You can use SPAN calculator for checking the margin requirements.

Hi Venu, checked the link you provided and tried to search “banknifty june 18500” in Kite just as shown in the screenshot at tradingqna/39158/how-to-add-weekly-banknity-options-in-kite-marketwatch, I am not getting the weekly option but I am getting the chain of options for the month (30th june expiry).Please check before responding. Most Harassive. I am sure this will be the case with MCX commodity options as well once they are launched. Finance minister announced in the budget in February that MCX commodity options will be launched and I am sure you guys are not ready as usual.

Check that link again. Search for Banknifty 16 Jun 17000 CE , this will give you Banknifty 17000 CE expiring 16th June. You can similarly select other weekly options.

i am not able to take intrday margins in weekly options why has it been blocked even when it has become very liquid.

Only certain strikes are liquid. We will wait before introducing additional intraday margins.

I am having positions of ANDHRA BANK – 100 , SBI -50 AND TATA STEEL – 50 Holding.

Now I want square off all position with SINGLE ORDER only . Is it possible with Zerodha kite or PI.

Single click not possible on both right now.

Please extend the intraday MIS square off time of 2:20.

Most of the time we see that during the last few minutes the market varies allot.

Você está planejando adicionar cadeia de opções com cálculo de gregos na posição de espera como Sharekhan?

Na nossa lista de coisas para fazer.

Sir, how do I trade Iron Condors on Zerodha Trader. Please explain with example.

You will have to take all the legs individually.

If all the legs have to be traded individually, Sir can the iron condor be traded on Zerodha Pi also.

Yes, u can trade on all the platforms .

does Pi or Kite has this option strategy tool?

Not for now, it is not available on Zerodha trader now as well.

Hi Nitin, Has the option strategy tool been removed in Z trader, I still have it on mine. And found some errors in the strategy window test where moderately bearish says fairly certain market wont fall..looks like there were some other errors too.

Yeah, not supporting this for now.

do you have any near plans to reintroduce it or can you suggest any tool like this?

i find it very handy in calculating the payoffs.

You can try options oracle from Samoa sky, it is probably the most widely used. Will take some efforts from your side to integrate data.

We badly need Greeks for option positions. Also getting Option Oracle seems like horse’s horn. What are your future plans for Option traders.

We are working on it, will take us a couple of months.

I too cant emphasize enough the need for Options Chain in Kite and Pi… The calls and puts should be directly tradeable from the Options chain. Also there should be columns for Option Greeks like Delta, Theta, Gamma which are updated in real time with the Option prices.

Hope its implemented at the earliest !

I am new customer. During using Pi (latest version) I selected a contract as :

NFO – NORMAL – OPTIDX – NIFTY – 29SEP2018 – CE – 8800 – NIFTY16SEP8800CE.

It added as : NIFTY16SEP8800CE.

1) why it is added as NIFTY16SEP8800CE , not as NIFTY29SEP8800CE when the expiry is on 29-Sep-2018 ? It can create confusion especially in BANKNIFTY which has weakly and monthly expiry while NIFTY has only monthly expiry.

2) why the various details are not displaying correctly in Pi. They are either overlapped, some part is hidden, not displayed correctly ? Is some resolution on which Pi display correctly ?

1. 16 represents year and if it is represented as NIFTY29SEP8800CE how one will know which year it is as nifty has 5 year option contracts at any point of time?

2. If you can write to [email protected] in detail mentioning the same we will answer accordingly or if it is required will call take access of your system and fix it.

Thanks for the clarification of question 1.

Regarding question 2, I have sent email with screenshot to support yesterday around 11:00 AM but till now no response even support ticket is not generated.

I have a query regarding call option writing. For example I have 1 lakh rupees in my wallet. I want to write a NIFTY 8600 call(1 lot, qty: 75) at 100/- premium with NRML. Let us suppose it needs 40k as margin. So my order gets executed and I have 60k in my wallet.

Now, premium starts going up.

1. As it is going up, remaining 60k keeps reducing?

2. For example, that day premium ends at 120 and I am not buying it to exit. Next day morning how much will I have in my wallet?

3. Again on that day premium came to 80 and I buy and exits.

Now how much money I will have in my wallet after I exits..

As per my assumption, I will have 1,00,000 – 40,000 – (75×20) + (75×40) + 40,000 = 1,01,500. Estou correcto?

1. No, when you short options, the margin blocked will keep going up when in loss.

2. Your wallet remains the same, But there will be more margin blocked.

Can we use Option Strategy tool in PI and Kite if yes then would it be possible for you to guide me.

Can you please calculate and the show the premium receivable on Nifty 9100CE – Today it closed at 77.05 including the brokerage tax etc. Because Margin Calculator shows Rs.5554. My manual calculation i. e. 77.05 x 75= 5778.75. Difference is 224.75. Am I right or wrong in calculation. Or is it the tax and brokerage added( So High). As I am a new trader , I am eager to know and plan according to it. Agradecimentos e cumprimentos.

You’ll always receive credit of (Premium*Qty) to your account.

Your varsity module helped me clear NISM VIII Equity Derivative in first attempt. Muito bem explicado. Obrigado.

I had stopped trading for a while after making some silly common errors which u mentioned in your modules that normally new traders make. But after going through your derivative modules again and again I have learnt a lot specially your shorting OTM call options. I am not trading yet just watching the movement and trading virtually on paper.

Why bank nifty weekly symbols are not seen in the symbol selection in F&O margin calculator in case i need to know the margins for sell. For eg. i want to short bank nifty Dec 8th CE option, but in margin calculator the symbol is not available to calculate the margin required to short, only monthly contracts available.

We’re working on making them available. The margins required for weekly options will be roughly the same as required to the closest expiring monthly contract.

I am using Kite and PI and also have installed Nest. Actually I was looking for Option Strategy Payoff chart. But could not find it any where. Can you help me for the same?

Currently no payoff chart available on the platform.

In the case of Weekly Option in Bank Nifty, Is it an American option or European. Can we buy and sell at any point of time as in the case of monthly option?

It works exactly like the monthly option, all options in India are European.

Dear Sir / Madam,

Please let me know is there any way in Zerodha kite / PI platform to view the option chain and define Option strategy.

These features are provided by other brokers trading plat form.

In case of zerodha has this features guide me how to use the same or is it in your pipe line for development or future release.

Obrigado e saudações.

It is on our list of things to do.

I’m eagerly awaiting viewing Option chain in PI. This has been on your list since Last year. Please help us on this. This would save lot of headache and would make us more efficient. Any tentative date when we can see option chain in PI ?

We will be providing more than option chain related to options in coming months, but these will take more time. Till then you’d have to use NSE option chain.

when i buy my bank 9thmarch option it always used to say margin exceeds.

BEst to send account specific queries to [email protected]

hi sir, if i already take a position say reliance may call of 1440 and nw i want to take a position to sell reliance 1500 call of april can i get margin benefits and how much capital is required for shorting 1500 call pls help me out. thankyou.

You can check it out yourself on SPAN calculator.

Can you please provide some link of option payoff diagram generator to test my own strategies.

is option strategy tool given in pi.

No, this tool is deprecated now.

No, such a tool isn’t available yet.

Is it possible to watch option chain in 1 click in Kite. I need to add the option with strike price every time than only i am able to see the rate. Instead if i can get the option chain with 1 click on underlying scrip than it will be easy to trade. it will save time as well.

On our list to do. Milan, you’d have to use NSE option chain until then.

I am not able to see Option startagies in Nest platform. Could you please let me know how to place option strategy in Zerodha.

This feature is no more supported.

Thanks Nithin. Can you please let me know how to initiate Option Strategies in Zerodha?.

This tool is currently not there anymore.

ok Nitin. Do you have any plans to Implement all option strategies in Zerodha?

Yes, but will take time.

How can i login to Zerodha trader (Nest Platform). as im not comfortable with Kite.

Can you please help me about this message while i am trading for NFO optios buy or sell.

rms:rule: option strike price based on ltp percentage for entity account-zt4839 across exchange across segment across product.

I have around 3300 rs in my account and trying to buy bank nifty 1 rs PE, lot size is 40 but it is giving the above message.

When were you facing this? If you are trading on banknifty weekly options, we run restrictions on the strikes you can trade on the last day.

No, this has expiry date as month end date, I have tried to buy on whole week but no luck.

Best to send account specific query to [email protected]

please let me know why the strategy builder is no longer available. is there any chance it might come back. is there any other places in zerodha where we can analyse before taking an option strategy. without this zerodha platform seems useless for an option trader.

hmm.. this is no more there. Nothing planned for now.

Appreciate your reply, I can understand why it’s not a matter of concern at least as of now. When it comes to tech in trading I saw that innovation in zerodha and by far more attractive than the zero brokerage success formula.

Similarly, when it comes to trading, options are far..far innovative than the conventional equity gimmick, don’t take me wrong 90% of the community do it as a no-brainer.

Being an innovative brokerage firm, I expect you to take much more concern to the options market because why I say is that, I know options market in India is far less superior in innovation than what we see outside (say US) but when a person who wants to think different and do different look upon there must be something that stands out and support him in the endeavour and who knows, where lies the future.

Once again thanks for finding time to reply.

Where to find Option Calculator in Pi?

i am new to options trading. pls clarify my doubt.

suppose if i sell an option (stock or index) which i dont have in my portfolio,

how long can i hold and buy?

You can hold an options short position until expiry. Check out the options module on Varsity to learn more.

Really Nice Article.

Can you please clarify this below :-

3. STT(Security Transaction Tax charged by the government) for Future is charged on the contract value whereas for options it is charged on the option premium. What this means is if you buy and sell 1 lot of nifty futures at 6000, the turnover generated is Rs 6lks( 3lks+3lks). STT is 0.017% of Rs 3lks which is Rs 51, whereas if you had bought and sold an option with premium Rs 100, the turnover would have been Rs 10,000(5000+5000) and STT of Rs 0.85.

what is Rs 6lks ?

Desde já, obrigado.

This post was written when the lot size of Nifty was 50. So, 6000×50 is 3 lakhs. Buy and sell together come up to 6 lakhs.

Bull Call Spread.

2.1 – Background.

The spread strategies are some of the simplest option strategies that a trader can implement. Spreads are multi leg strategies involving 2 or more options. When I say multi leg strategies, it implies the strategy requires 2 or more option transactions.

Spread strategy such as the ‘Bull Call Spread’ is best implemented when your outlook on the stock/index is ‘moderate’ and not really ‘aggressive’. For example the outlook on a particular stock could be ‘moderately bullish’ or ‘moderately bearish’.

Some of the typical scenarios where your outlook can turn ‘moderately bullish’ are outlined as below –

Fundamental perspective – Reliance Industries is expected to make its Q3 quarterly results announcement. From the management’s Q2 quarterly guidance you know that the Q3 results are expected to be better than both Q2 and Q3 of last year. However you do not know by how many basis points the results will be better. This is clearly the missing part of the puzzle.

Given this you expect the stock price to react positively to the result announcement. However because the guidance was laid out in Q2 the market could have kind of factored in the news. This leads you to think that the stock can go up, but with a limited upside.

Technical Perspective – The stock that you are tracking has been in the down trend for a while, so much so that it is at a 52 week low, testing the 200 day moving average, and also near a multi-year support. Given all this there is a high probability that the stock could stage a relief rally. However you are not completely bullish as whatever said and done the stock is still in a downtrend.

Quantitative Perspective – The stock is consistently trading between the 1 st standard deviation both ways (+1 SD & -1 SD), exhibiting a consistent mean reverting behavior. However there has been a sudden decline in the stock price, so much so that the stock price is now at the 2 nd standard deviation. There is no fundamental reason backing the stock price decline, hence there is a good chance that the stock price could revert to mean. This makes you bullish on the stock, but the fact that it there is a chance that it could spend more time near the 2 nd SD before reverting to mean caps your bullish outlook on the stock.

The point here is – your perspective could be developed from any theory (fundamental, technical, or quantitative) and you could find yourself in a ‘moderately bullish’ stance. In fact this is true for a ‘moderately bearish’ stance as well. In such a situation you can simply invoke a spread strategy wherein you can set up option positions in such a way that.

You protect yourself on the downside (in case you are proved wrong) The amount of profit that you make is also predefined (capped) As a trade off (for capping your profits) you get to participate in the market for a lesser cost.

The 3 rd point could be a little confusing at this stage; you will get clarity on it as we proceed.

Bull Call Spread.

2.2 – Strategy notes.

Amongst all the spread strategies, the bull call spread is one the most popular one. The strategy comes handy when you have a moderately bullish view on the stock/index.

The bull call spread is a two leg spread strategy traditionally involving ATM and OTM options. However you can create the bull call spread using other strikes as well.

To implement the bull call spread –

Buy 1 ATM call option (leg 1) Sell 1 OTM call option (leg 2)

When you do this ensure –

All strikes belong to the same underlying Belong to the same expiry series Each leg involves the same number of options.

Date – 23 rd November 2018.

Outlook – Moderately bullish (expect the market to go higher but the expiry around the corner could limit the upside)

Nifty Spot – 7846.

ATM – 7800 CE, premium – Rs.79/-

OTM – 7900 CE, premium – Rs.25/-

Bull Call Spread, trade set up –

Buy 7800 CE by paying 79 towards the premium. Since money is going out of my account this is a debit transaction Sell 7900 CE and receive 25 as premium. Since I receive money, this is a credit transaction The net cash flow is the difference between the debit and credit i. e 79 – 25 = 54 .

Generally speaking in a bull call spread there is always a ‘net debit’, hence the bull call spread is also called referred to as a ‘debit bull spread’.

After we initiate the trade, the market can move in any direction and expiry at any level. Therefore let us take up a few scenarios to get a sense of what would happen to the bull call spread for different levels of expiry.

Scenario 1 – Market expires at 7700 (below the lower strike price i. e ATM option)

The value of the call options would depend upon its intrinsic value. If you recall from the previous module, the intrinsic value of a call option upon expiry is –

Max [0, Spot-Strike]

In case of 7800 CE, the intrinsic value would be –

Max [0, 7700 – 7800]

Since the 7800 (ATM) call option has 0 intrinsic value we would lose the entire premium paid i. e Rs.79/-

The 7900 CE option also has 0 intrinsic value, but since we have sold/written this option we get to retain the premium of Rs.25.

So our net payoff from this would be –

Do note, this is also the net debit of the overall strategy.

Scenario 2 – Market expires at 7800 (at the lower strike price i. e the ATM option)

I will skip the math here, but you need to know that both 7800 and 7900 would have 0 intrinsic value, therefore the net loss would be 54.

Scenario 3 – Market expires at 7900 (at the higher strike price, i. e the OTM option)

The intrinsic value of the 7800 CE would be –

Max [0, Spot-Strike]

= Max [0, 7900 – 7800]

Since we are long on this option by paying a premium of 79, we would make a profit of –

The intrinsic value of 7900 CE would be 0, therefore we get to retain the premium Rs.25/-

Net profit would be 21 + 25 = 46.

Scenario 4 – Market expires at 8000 (above the higher strike price, i. e the OTM option)

Both the options would have a positive intrinsic value.

7800 CE would have an intrinsic value of 200, and the 7900 CE would have an intrinsic value of 100.

On the 7800 CE we would make 200 – 79 = 121 in profit.

And on the 7900 CE we would lose 100 – 25 = 75.

The overall profit would be.

From this, 2 things should be clear to you –

Irrespective of the down move in the market, the loss is restricted to Rs.54, the maximum loss also happens to be the ‘ net debit ’ of the strategy The maximum profit is capped to 46. This also happens to be the difference between the spread and strategy’s net debit.

Spread = Difference between the higher and lower strike price.

We can calculate the overall profitability of the strategy for any given expiry value. Here is screenshot of the calculations that I made on the excel sheet –

LS – IV – Lower Strike – Intrinsic value (7800 CE, ATM) PP – Premium Paid LS Payoff – Lower Strike Payoff HS-IV – Higher strike – Intrinsic Value (7900 CE, OTM) PR – Premium Received HS Payoff – Higher Strike Payoff.

As you can notice, the loss is restricted to Rs.54, and the profit is capped to 46. Given this, we can generalize the Bull Call Spread to identify the Max loss and Max profit levels as –

Bull Call Spread Max loss = Net Debit of the Strategy.

Net Debit = Premium Paid for lower strike – Premium Received for higher strike.

Bull Call Spread Max Profit = Spread – Net Debit.

This is how the pay off diagram of the Bull Call Spread looks like –

There are three important points to note from the payoff diagram –

The strategy makes a loss in Nifty expires below 7800. However the loss is restricted to Rs.54. The breakeven point (where the strategy neither make a profit or loss) is achieved when the market expires at 7854 (7800 + 54). Therefore we can generalize the breakeven point for a bull call spread as Lower Strike + Net Debit The strategy makes money if the market moves above 7854, however the maximum profit achievable is Rs.46 i. e the difference between the strikes minus the net debit 7900 – 7800 = 100 100 – 54 = 46.

I suppose at this stage you may be wondering why anyone would choose to implement a bull call spread versus buying a plain vanilla call option. Well, the main reason is the reduced strategy cost.

Do remember your outlook is ‘moderately bullish’. Given this buying an OTM option is ruled out. If you were to buy the ATM option you would have to pay Rs.79 as the option premium and if the market proves you wrong, you stand to lose Rs.79. However by implementing a bull call spread you reduce the overall cost to Rs.54 from Rs.79. As a tradeoff you also cap your upside. In my view this is a fair deal considering you are not aggressively bullish on the stock/index.

2.3 – Strike Selection.

How would you quantify moderately bullish/bearish? Would you consider a 5% move on Infosys as moderately bullish move, or should it be 10% and above? What about the index such as Bank Nifty and Nifty 50? What about mid caps stocks such as Yes Bank, Mindtree, Strides Arcolab etc? Well, clearly there is no one shoe fits all solution here. One can attempt to quantify the ‘moderate-ness’ of the move by evaluating the stock/index volatility.

Based on volatility I have devised a few rules (works alright for me) you may want to improvise on it further – If the stock is highly volatile, then I would consider a move of 5-8% as ‘moderate’. However if the stock is not very volatile I would consider sub 5% as ‘moderate’. For indices I would consider sub 5% as moderate.

Now consider this – you have a ‘moderately bullish’ view on Nifty 50 (sub 5% move), given this which are the strikes to select for the bull call spread? Is the ATM + OTM combo the best possible spread?

The answer to this depends on good old Theta!

Here are a bunch of graphs that will help you identify the best possible strikes based on time to expiry.

Before understanding the graphs above a few things to note –

Nifty spot is assumed to be at 8000 Start of the series is defined as anytime during the first 15 days of the series End of the series is defined as anytime during the last 15 days of the series The bull call spread is optimized and the spread is created with 300 points difference.

The thought here is that the market will move up moderately by about 3.75% i. e from 8000 to 8300. So considering the move and the time to expiry, the graphs above suggest –

Graph 1 (top left) – You are at the start of the expiry series and you expect the move over the next 5 days , then a bull spread with far OTM is most profitable i. e 8600 (lower strike long) and 8900 (higher strike short) Graph 2 (top right) – You are at the start of the expiry series and you expect the move over the next 15 days , then a bull spread with slightly OTM is most profitable i. e 8200 and 8500 Graph 3 (bottom left) – You are at the start of the expiry series and you expect the move in 25 days , then a bull spread with ATM is most profitable i. e 8000 and 8300. It is also interesting to note that the strikes above 8200 (OTM options) make a loss. Graph 4 (bottom right) – You are at the start of the expiry series and you expect the move to occur by expiry , then a bull spread with ATM is most profitable i. e 8000 and 8300. Do note, the losses with OTM and far OTM options deepen.

Here are another bunch of charts; the only difference is that for the same move (i. e 3.75%) these charts suggest the best possible strikes to select assuming you are in the 2 nd half of the series.

Graph 1 (top left) – If you expect a moderate move during the 2 nd half of the series, and you expect the move to happen within a day (or two) then the best strikes to opt are far OTM i. e 8600 (lower strike long) and 8900 (higher strike short) Graph 2 (top right) – If you expect a moderate move during the 2 nd half of the series, and you expect the move to happen over the next 5 days then the best strikes to opt are far OTM i. e 8600 (lower strike long) and 8900 (higher strike short). Do note, both Graph 1 and 2 are suggesting the same strikes, but the profitability of the strategy reduces, thanks to the effect of Theta! Graph 3 (bottom right) – If you expect a moderate move during the 2 nd half of the series, and you expect the move to happen over the next 10 days then the best strikes to opt are slightly OTM (1 strike away from ATM) Graph 4 (bottom left) – If you expect a moderate move during the 2 nd half of the series, and you expect the move to happen on expiry day , then the best strikes to opt are ATM i. e 8000 (lower strike, long) and 8300 (higher strike, short). Do note, far OTM options lose money even if the market moves up.

Here is something you should know, wider the spread, higher is the amount of money you can potentially make, but as a trade off the breakeven also increases.

Today is 28 th November, the first day of the December series. Nifty spot is at 7883, consider 3 different bull call spreads –

Set 1 – Bull call spread with ITM and ATM strikes.

7769 breakeven is easily achievable,

however the max profit is 31,

skewing the risk (69 pts) to reward (31 pts) ratio.

Set 2 – Bull call spread with ATM and OTM strikes (classic combo)

Set 3 – Bull call spread with OTM and OTM strikes.

So the point is that, the risk reward changes based on the strikes that you choose. However don’t just let the risk reward dictate the strikes that you choose. Do note you can create a bull call spread with 2 options, for example – buy 2 ATM options and sell 2 OTM options.

Like other things in options trading, do consider the Greeks, Theta in particular!

I suppose this chapter has laid a foundation for understanding basic ‘spreads’. Going forward I will assume you are familiar with what a moderately bullish/bearish move would mean, hence I would probably start directly with the strategy notes.

Key takeaways deste capítulo.

A moderate move would mean you expect a movement in the stock/index but the outlook is not too aggressive One has to quantify ‘moderate’ by evaluating the volatility of the stock/index Bull Call spread is a basic spread that you can set up when the outlook is moderately bullish Classic bull call spread involves buying ATM option and selling OTM option – all belonging to same expiry, same underlying, and equal quantity The theta plays an important role in strike selection The risk reward gets skewed based on the strikes you choose.

226 comments.

Sir, If am no asking question out of context. plz tell me if there is any free tool available to calculate pay off and profit/loss or other things for option trading.

There is an excel sheet at the end of the chapter which you can download. This will help you calculate the breakeven points.

Can you please explain why Risk : Reward shouldn’t be considered in option strategies ? Because R:R is used to become profitable(or reduce the loss) even after few consecutive loss, right ? My assumption may be wrong, so can you explain more… Thanks in advance, Kartick 🙂

Billa – Risk Reward should be considered before executing any trade. Have I mentioned anywhere that it should not? If yes, please do let me know…I need to correct it. Obrigado.

No, itsn’t mentioned R:R shouldn’t be considered.. Written as “don’t just let the risk reward dictate the strikes that you choose.” Got it Now..Thanks.

hello sir here Maximum Risk is 54 times lot size….=54 * 75=4050 or if 67 points then 67*75 = 5025.

then why every broker needs 30000 to 40000 INR in margin for spread order.

Por favor deixe-me saber.

Thats right. For executing this strategy you will need to pay full premium amount plus the margin for writing 1 lot of option. Margin required is purely from risk management perspective.

I didn’t get it sir, if there is no way I could lose more net debit amount then why do I need margin amount.

Margin’s are required as long as you have a leveraged position in the market. However, you do get a margin benefit when you initiate a spread strategy, check this – https://zerodha/margin-calculator/SPAN/

Okay got it 🙂 Thanks a lot sir.

I have analyzed few basic and technicall and bought Sunpharma 800 call at 4.75 today. As expiry is still too far is there possiblity to get some 20 to 30 % return in this trade.

Well, our job is to analyse rationally, as long as thats done, the returns are expected to follow. Boa sorte!

buy 1 atm and sell one otm:

Will there be a margin difference if i place two different orders – for buy and sell? Because for moderately bullish outlook, I can buy the call for a while or even a couple of days and then sell the otm call option.

Again, in the example spot price is 7846. But ATM is shown as 7800 and not 7850. I could not understand why it is so. Also, the volume traded appears to be less at 7850 rather than 7800. When the same index is being traded why is the volume traded so different.

Is there any other tutorial on how to use pi other than the youtube video.

You can reply as and when you are relatively free as I think you are doing a wonderful job to help others.

Margins are charged for the short option position (OTM in this case). Also, do note bull call spread is best executed as a ‘set’. Meaning simultaneously buy 1 lot and sell 1 lot.

In between strikes like 7850, 7950, 8050 etc are not very liquid as people dont really like to trade these (not sure why), hence this explains the low trading volume on these strikes.

Sir, very nicely explained with details. Its going to affect our trading style and life too.

The gap of 300 points for nifty is as per your experience. What shall be the strike price difference for bank nifty and other important scripts (that you are normally trading) like SBI, TATA Mot and L&T INfy etc.?

I guess difference of 1 or 2 sticks max for stocks should be ok.

Sir will this strategy work if we are kind off bullish or bearish only for the next 2 to 3 days. So is it worth putting a bull call spread for only a small amount of time say ranging from 2 to 5 days.

Yup, you can initiate it for such short periods.

One more thing sir,

When you said two spread position, 2 ATM and 1 OTM then you meant to say that two different OTM strike price call for shorting. Is it right. One may be far OTM and one may be OTM so that we will have two type of bull-call-soread at a time. Probably due to the fact that the exact time for anticipated move in the price is not possible to know so we can take two strategy, one for say 5 day expected move and 15 days expected time for movement of the price. Está correto?

Bull Call Spread is done with a 1 : 1 ratio…meaning for every 1 option bought, 1 option has to be sold. You can choose to do it in any combination – 1 ATM 1 OTM or 1 ITM 1 ATM or 1 OTM 1 OTM. The risk reward is gets skewed based on the combination of strikes.

Sir, Is there any excel sheet or calculator is handy for knowing option price if the spot price moves by ‘X’ amount over , say 5, 10 or 25 days considering all Greeks effect? IV may be assumed to be same.

Not that I know of, maybe I’ll look ard on the net for something like this.

Sir, Is there any excel sheet or calculator is handy for knowing option price if the spot price moves by ‘X’ amount over , say 5, 10 or 25 days considering all Greeks effect? IV may be assumed to be same. This will be helpful in calculating R/R ration, target etc. We may estimated probable price movement of the underlying by TA. that price change shall be translated to option premium using all Greeks if it is for more than one day trade. I think my question is valid.

DLF 15 Dec 130 CE expires on 15 Dec or 31st Dec.

Last Thursday of the month, which is 31st.

In “DLF 15 Dec 130 CE” 15 means year 2018 not the expiry date.

Sir – I am regular trader at Zerodha. Recent move from Zerodha of 0 brokerage is promising to boost reatil participation. Obrigado por isso.

Question – This chapter explains P/L considering position is held till expairy ? Can you please help me to understand P/L if one decides to exit position before expiry?

The P&L calculation during the series is not easy to calculate as there are many forces action on premium simultaneously 🙂

So do you mean, if one wish to use bull spread strategy, he needs to hold position till expiry?

The trader can experience the full payoff of the strategy only if he holds the position till expiry. If he close the position before that then the payoff will be slightly different.

Set 2 – Bull call spread with ATM and OTM strikes (classic combo)

Lower Strike (ATM, Long) 7800.

Higher Strike (ATM, short) 7900…. Should be OTM as per SET-2 .

pl clarify my doubt here. When nifty spot in the example is at 7883, 7900 is ATM or OTM? How about 7800…ITM OR ATM?

Set 3 – Bull call spread with OTM and OTM strikes.

Lower Strike (ATM, Long) 7900 ….Should be OTM as per SET-3.

Higher Strike (ATM, short) 8000 ….Should be OTM as per SET-3.

Ah, some typo errors here – will correct it.

would you also be discussing about pair trading and ratio trading in this modulr.

Ratios yes, but Pair Trading in a separate module I suppose.

i request that next module should be on commodities before taxation. pls complete the current module within jan.

Thats the idea – next module on Commodities, Currency, and Interest Rate Futures!

Btw, taxation module is complete already.

I request that the module on Option Theory for Professional trading should be available to the readers in a PDF format just like other modules. That will be very helpful to the novice traders like me. Thanks for your excellent work.

Will be ready today/t’row.

I download the excell and I taken position ATM buy and OTM SELL. can i exit the position when i get profit even before the expiry or else i have wait till the expiry.

You can exit the position whenever you think it is good for you.

Excellent material, Karthik. How do we get the Profit/Loss% vs Strike graphs with the time dimension, that you have provided in this module for Bull Put spread strategies?

Logic is from Black & Scholes model and they are rendered in ‘R’ 🙂

One can adjust bull call Spread as follows:-

a. If the index or stock is expected to move further than the Strike price of Shorted Call, then one can Buy to close the short position and then Sell another further out of money call.

b. If the rise is very strong , one can buy the short positions and leave the Long Call options alone making it Naked Call long, but it has to be monitored without overnight positions-for intraday only.

c. If the index or stock is expected to decline after reaching or close to reaching the short strike price, one can close the long call position and buy further out of money to make it a (bear call spread – a possibility of decline in the underlying with protection )

please suggest anything further on this if you know and let it be simple for everyone to understand.

This is ok, but your transaction costs go up. If you are not with a broker like Zerodha then your broker eats up the spread and you would be left with an empty plate!

For all the other variants you have suggest, here is my thought – the bull call spread and bull put spread are simplest spread strategies, its best kept that way 🙂

I hv fe queries in general about options.

if u see there are the contracts available for next 4 months and then some months missing. as u go futher in time the missing months increase. why it is so. What if some one wants to but the contract which is not listed.

2. if we go further in time the contracts have some fields missing some contracts dont have LTP, oi, IV, ASK BID PRICE ETC. So what is there significance. Con u tell with screen shot.

3. better have one class specifically on option chain and its componets like i mention above and their implication on our trade especially in long/ far contracts.

If the fields are blank then it means the contract is not traded , perhaps there is no liquidity hence no participation.

@karthik : Do we need to check any implied volatility conditions before initiating bull call spread trade?

Always helps to keep an eye on IVs!

Why cant we trade options in a similar way like we trade futures ie with technical indicators and stoplosses? I have not been able to understand this, as it looks like we have to calculate so many things in option strategies. Does it really make money ?

Replied posted in your earlier query.

Is it possible to trade options in a similar fashion as futures? ie buy options when future gives a buy signal and vice versa. What are the negative implications in this.

Technically you can, but do remember these are two different instruments all together. For the same market situation they can behave differently.

The max profit is difference between premium paid for lower strike price minus higher strike price, right. Higher strike moves less than the lower strike. the difference is between them. Why spread is considered here. We are only bothered about premium, right.

Yes, but premium is dependent upon the spread right?

can this strategy be used in intraday.?

You can, especially when there are major announcements due.

i cant understand selling call option does it means short selling call option?

Selling can mean two things based on the context. If you have an existing long call position, selling here would mean squaring off the long position. If you want to initiate a fresh short position, then you would be required to sell first. Here selling refers to shorting. In case of a bull call spread, you are required to short the call option.

can we sell european option before expiry date ?

if i got some profit in european option example from rs 1 it raised to rs 5.

can we sell european option before expiry date ?

Yes, you can sell EU options before expiry and book profits.

when ur going to upload other 3 modules eager to read.

We are starting Module 8 on commodities, currencies, and IFR…once this is done, we will be working on the other modules.

When will other modules like currency derivatives, trading psycology be released ?

We are currently working on the currencies and commodities module.

You are suggesting to create a spread of 300 pts difference. But in your examples you refered 100 pts difference every where. pl. clarify.

Well, technically you can create the spreads for any difference. The higher the difference the lower is your risk and reward.

In study 1, it has to be -54,right. Capital is going out. Strategy failed here, right.

Yes, its a net debit.

It is net debit, whether max profit or max loss. Why spread is coming into picture. I don’t get this. Please clarify.

The spread is a term used to describe the difference between the two strikes.

Hi, why no iBook for this section? Obrigado.

We will try and put it up soon. Obrigado.

Dear Karthik – Can you help clear this confusion. I am viewing bull call(debit) as an mirror image of bear call (credit). So if one is successful, the other has to be weak. For eg. if you recommend buying a bull call at start of cycle with say 5 days, then you are saying buy deep OTM and sell deeper OTM. I guess the same should NOT favor bear call as you have mentioned in chapter 8 !! I hope this makes sense ..

Naresh – I’m a bit confused, can you explain your query in more detail please? Obrigado.

Dear Karthik, My understanding is that a bull call and bear call should be inverse of each other. If a far OTM call pair is suitable for bull call early in the cycle, then obviously, the same pair should not be suitable for a bear call credit spread. Because the debit bull spread is geared up for increasing premiums whereas the credit bear spread is geared up for falling premiums. However, if one refers to your chapter on bear call credit spread, the suggested pair selection for an early entry in cycle is again same as bull call spread. This is creating confusion. Can you advice. Obrigado.

Naresh, I’m getting a bit lost with your query. Can you please pick an example, that will make it easier. Obrigado.

Oi ! If you choose a far OTM bear debit CE spread like 8900-8600 ( 8600 long and 8900 short) early in the cycle to make money assuming spot is at 8000, then my assumption is that the opposite of bear call spread is actually a bear credit call spread of 8900-8600 ( 8600 short and 8900 long ). IF this assumption is correct, then both of them cannot do well at the same time. Hence for a bullish person, the choice of 8600-8900 is as recommended by you a far otm pair. However, a far OTM pair should NOT be chosen if you are a bearish for the same reason. Is this logic correct ? Hence one should NOT choose a far OTM for a bear credit CE spread and choose some other pair which is not a far OTM ? Does this make sense or have I confused myself !

Naresh I get a feeling you’ve confused your self 🙂 – you describe 8600 CE long + 8900 CE short as a Bear debit CE spread, this is not. It is a normal bull call spread.

You cannot think in the lines of 1 set of position being exactly opposite of another set of positions, this is especially true with options because options are non linear instruments. The payoff;s depend on multiple factor. When you initiate position think in terms of the premium, theta, and volatility.

Small correction – ignore the previous comment.

Oi ! If you choose a far OTM BULL debit CE spread like 8900-8600 ( 8600 long and 8900 short) early in the cycle to make money assuming spot is at 8000, then my assumption is that the opposite of BULL call spread is actually a bear credit call spread of 8900-8600 ( 8600 short and 8900 long ). IF this assumption is correct, then both of them cannot do well at the same time. Hence for a bullish person, the choice of 8600-8900 is as recommended by you a far otm pair. However, a far OTM pair should NOT be chosen if you are a bearish for the same reason. Is this logic correct ? Hence one should NOT choose a far OTM for a bear credit CE spread and choose some other pair which is not a far OTM ? Does this make sense or have I confused myself !

I just saw this message !

By the way my previous comment still holds true 🙂

Hi, it will be very useful if we get a chapter showing how to use option strategy planner in NSEindia Patatshaala. the website is loaded with very good option strategy planner and is good for learning. Teaching with screenshots will be very helpful.

Desde já, obrigado.

Sure, thanks for the suggestion. Vamos olhar para ele.

can anyone tell me is there any difference if we buy OTM PE instead of writing OTM CE.

The decision will depend on how the premium is playing out in the market. You would prefer to buy an option only if the premiums are attractive (cheap)….and you write an option if the premiums are bloated.

I found the “Strike Selection” section most interesting and am wondering if you can shed some more light on the construction of the graphs. When you say “target hit in 5 days” and then show that the 8000 strike is most profitable, can you share the logic and working behind it?

These graphs are developed using a software called ‘R’, and I in fact requested a friend to do them for me 🙂

I just wanted to understand the construction. What were the parameters used for the optimization and what were the variables and constants?

I’m afraid I may not be the right person for this, will try and get a note on how these graphs are constructed. Obrigado.

sir, when we buy naked call suppose 8000 @100.we have to pay premium rs 7500.but when we make it bull call spread to reduce risk. we have to pay more margin to exchange. why? if our maximum risk is less, why exchange take more margin?

No, this is not true, in fact you do get a sprad margin benefit. Check this on our margin calculator – https://zerodha/margin-calculator/SPAN/

I am new to options trading. towards the end of the expiry, do I need to square of the 1ATM that i bought and 1OTM that i sold when the Bull Call Spread was initiated ? I am confused on this part, since you mentioned that this is best executed as a set , so a square off is required again or not?

Yes, its best executed and closed as a set. So when you are closing the position, its best to close all the legs.

Sir can we just buy a plain call option and put a stop loss in place for the same risk to reward ratio ? That way we can make more money at the same risk.

Claro que você pode. In fact stop loss is a good technique to be included in all trading strategies.

hi karthik, a small doubt.

In this strategy(bull call spread),i have to wait till expiry for the full premium for(short call OTM)

My question is whether i have to square off (both legs) on the expiry date OR if i dont square off these positions, then will the exchange itself squares off (both legs) in the closing of the expiry date?

Upon expiry, all the strikes will cease to exist…and if you do not close, then the exchange will settle them for you. Btw, you need not really wait for the expiry…if you are happy with the profits, you can close it anytime you want.

If we expect stock to be moderately bullish then we can buy at the money call and and buy out of the money put. Why we need to sell out of the money call, because generally as soon as you get into profit position, one will book profit, I am assuming most trader won’t wait till expiry to book profit. If we opt for selling a call then obviously our margin will be blocked.

When you sell the option, you receive the premium, with the premium received you finance the purchase of the call option thereby reducing the need for excess funds.

I understand if only a day or two to expiry remaining then it may be sensible to sell but otherwise I think buying a put option should also work.

It does, but like I explained earlier…it is about capital efficiency.

Hi Karthik, great work !! every time I read a new chapter, more than I learn something new, I start realising what went wrong in my trades and strategies . Thanks for the work! Coming to my question, I came across a great bull spread opportunity where the net debit was zero and the profit was capped. This happened when I was scouting for strike selection for bull spread strategy in TATAGLOBAL on 01/10/16 using NSE Paathshala. The strikes selected were 147.5, 150 . Can you please explain why this is happening. Additionally I have request to Zerodha, to add a option strategy tester tool to the website so that we can simulate these calculation which you have done in the website directly(something like the one in NSE Paathshala). Obrigado.

What were the premium prices? Anyway, you sometime do get good opportunities 🙂

Building an options tool is a part of our agenda, hopefully it should get going sometime soon.

The difference in premium price were around 50 paise.

Hi , I have one more question. When we do a bull call spread, do we have to worry about theta and vega as they will get negated ? Obrigado.

You will have to pay attention 🙂

Have posted the graphs in the chapter which explains this.

Hi Thanks for the replies. I understand the mistake in my question on Geeks.

You are supposed to have separate chapter on trading calendar spreads in futures in the trading strategy module. Kindly update on the same.

Will do Sir, one at time 🙂

i want to do bull call spread strategy, when i look margin calculator for this, i can find lot of margin benefit for this strategy ,,how i trade this strategy.

1. i have to put separate order for both leg?

2. when i put separate orders which leg order should put first for getting margin benefit.?

3. is there is alternate way for putting spread (bull call spread , bear put etc..) orders in pi.

Yes, there is a margin benefit for this. The strategy requires you to buy one leg and sell and another. You will have to place the trades, one at a time…and once both the legs are executed, the system will recognize the spread benefit and the additional margin charged will be released.

What if we execute spreads from ZT or nest? Is it required margins shown for spreads in margin calculator? Or will it release additional charged margin later?

The spread order should not be charging you additional margin, however I’d advice you to please check with my colleague once – [email protected] , thanks.

Good one Karthik! Is there an option in Zerodha to initiate spread trade at the same time. For ex: Buy ITM CE and Sell OTM CE in the same order.

I am a member of Z club. Please confirm if premium collected when selling a call, in the option strategy, in the beginning of the series will remain the same in the the series expires.

Anyway, the premium varies based on how the underlying trades. However, the premium that you’ve collected remains constant and does not vary based on how the underlying trades.

Thanks Karthik. What I meant was that I have a Zerodha account. Found the Varsity site very informative. Will stick to the guidelines mentioned. Atenciosamente.

Glad to know you liked the contents here Tarun. Boa sorte.

i m zerodha clinte.

module 5 option theory k bad module 6 ka hindi version kab tak aaega.

ya me ise kis tarah hindi me convert kr k study kar sakata hu ?

Sometime soon, hopefully.

If i buy Call Spread/Put Spread, I have to wait till expiry or i can sell at any level when i get profit ?

You can choose to sell it anytime before expiry.

is there any tool box to plot payoff diagrams for the given strike prices, strategy etc..

i just want to know how you created these p&l diagram that will help us to identify the best possible strikes based on time to expiry. For first half and second half. and you have added these p&l diagram for almost every strategy . i want to create these diagram by myself, how cahn i do it please explain. neither you have uploaded any excel sheet which shows effect of theta on strick price. please upload one.

I took the help of a friend, he did this in ‘R’ 🙂

if i am n ot wrong its based on theta decay not for particular strike price but for complete strategy and for every strategy there is different p&l chart. it is like mugging up for every strategy which is not an easy task. please build a execl sheet to make it easy ask your friend if he can make for all of us. por favor.

Firoz – actually it is a simple logic. No need to mug up anything 🙂

Anyway, I’ll try and put up a consolidated excel.

thanks again for your reply, i have a request build this p&l chart consolidated excel which we can use for all strategy not only for bull spread, but also for other strategy as well 🙂

Sure, will keep that in mind. Obrigado.

Karthik, thanks for the explanation. Some queries posted below:

1. Don’t u think, it would be a better choice to always trade both legs of ITM. Reason - The probability of success is more as ITMs will have more chances of staying ITM.

I understand there is a downside to the setup above mentioned in terms of RRR and premium, but chances of success are more. Your comments Karthik.

2. Sometimes noticed, the actual profit comes out to be more than the expected(Spread-net debit), if the position is closed pre expiry. From my understanding, this is due to increased volatility which impacts the extrinsic value taking the option prices higher. Please clarify.

1) Sort of, but this comes at very high premiums. Also remember, if the option turns OTM from ITM, your P&L would be hit quite hard.

2) Yes, although the chances are vey low for this happen.

Agreed there will be a high premium attached but could not understand the latter part. From my understanding, the loss is always fixed which is equivalent to the net debit. Por favor elabore.

I meant to say the same 🙂

Premium will be high therefore if the position goes wrong, your P&L will be hit hard (to the extent of premium paid).

sir very well explained , it taken a long jouney to reach this place after loosing heavily on options, even the paid class dont teach this good, fit for award from zeroda and all of us.

Thanks Kumaran! Good luck and stay profitable.

ur excel sheet is too good , any updates on exclel pls let us know, thks a million.

sir one small doubt how to find strke price according to expiry, any software avaiable sir.

Check out the option chain on NSE.

how can pssible squre off before expiy 7700ce buy at100 &7900 [email protected] at 50 hpw canisquare off before expiry.

You can square off option positions anytime you wish. You need not have to wait for the expiry day.

Please clarify, what do you mean by target hit in 5 days. I suppose its about 8000 to 8300 in 5 days. If so, whether this imply we should close out once the target reached and not to hold till expiry?

Girish, it means you expect your target to be achieved in 5 days. Yes, its something like a 300 point move over 5 days. You can choose to exit once your target is hit or you can even continue to hold assuming you continue to be bullish. This is entirely upto how you feel about the position.

Thanks Karthik for prompt reply, these chapters are invaluable and great help! Wish Zerodha new heights!!

Thanks for the kind words, Girish.

Hi, I have 700 Sun pharma shares in my account. i want to write OTM calls, the losses for which would be covered by rise in value of my stock. Today, when I sell calls, I still need to put Margin and this means I need to have more money. How could I write calls to hedge against downside, and the losses for which are negated due to rise in value of my stock. ??

You can pledge your shares and use that money to write options.

Hi, Thanks. But then I need pay interest on that amount. as I have the shares, why cant I sell call options using them as collatral?

My loss is limited this way. certo?

Have you checked out Covered Call strategy? Its simple a one, guess I missed including that here.

hi, i want to do it but how can i do it with my shares?

can we do it in kite?

Claro que você pode.

Está bem. How can we do it?

I’d suggest you call our support to get started.

thanks for the excellent video , i have just one question pl resolve it ,

i have purchased 2 lots of 9200 call @ 164 and sold 2 lots of 9450 @ 36 .

i trade daily and make at least 500 rs daily . on each leg.

supose i intend to keep both my positions till the end of the expiry , can i reduce these profits from the initial premium s and then calculate my P/L.

You cannot, as premiums play an integral part in calculating your P&L.

dear mr kartik , pl help me in understanding this.

i have sold 9400 call @ 53.25 , two lots . and i have purchased two lots of 9450 call @ 33.90.

i gain 19.35 as per the above caluclations.

when i put these figures in the payoff graph i see there is zero loss at any of the given strike prices , only gains.

am i correct ?? pl guide.

the excel format worked wonders for me ,

BLESSED TO HAVE A GUIDE LIKE YOU.

Happy to note that, Anil.

Good luck, happy learning, and stay profitable!

i plan to buy an atm 9600 call @ 90, co my investment will be 6750 , simultaneously sell 10 lots of 9900 call @ 9 value 6750.

so my net investment will be zero , is this a safe strategy . , pl correct me if im wrong .

my perception is i will start making a loss only if nifty moves above 9900.

You will be creating a delta neutral strategy here. Remember, no strategy is 100% safe.

In the example in the youtube where you have showed the bull call spread. You are selling a long Call option as MIS. Can we do this in Normal mode as well and hold it till end of the expiry?

Claro que você pode.

how to place an order so that it gets triggered after reaching certain price level. Like Price of a equity is now Rs.1000/- and my research say that we price go above 1030 then it will go upto 1080. In this case if I have placed an order for equity stating the purchase price Rs 1030 then it will trigger the order and I will get the equity @ 1000/- but I want my order to get triggered at 1030.

Nitesh, you can always buy using a stoploss order to buy. For example place the order to buy at 1030, with trigger as 1029.

Thank your for the informative content. I had some doubt.

Won’t the premium not change, if the spot price increases and it changing the delta and premium. This should bring a change in the debits?

Yes, but once you initiate the position, the premiums are fixed for you.

Thank you Karthik for the answer.

Dear Karthik, Magical Morning. Bull Call Spread Strategy You are Explaining Buy ATM, Sell OTM Options. But NCFM & NISM Module They are Explaining Buy ITM Call, Sell OTM Call. So Kindly I Request You To Clarify Which Strategy is Correct. Iam Awaiting for Your favorable Reply. Obrigado.

Hi Rajesh, magical morning to you too 🙂

There is no correct or wrong way here. I personally prefer buy ATM + Sell OTM combo.

The author keeps mentioning in various chapters in Option theories and strategies modules that, “If the market will increase by 5%/10% in the next 5 days/15 days/25 days….”. How to determine if the market is going to increase by what % and in how many days? I have not gone through the technical analysis module but is that what I should go through first or should I read and understand something else?

The increase in market over a certain period of time is a point of view that you as a trader need to develop. All discussions are based on the assumption that you do have view on markets.

Thank you for the response. Any pointers on how to begin, maybe books or tutorials?

Varsity is books and tutorials 🙂

Hi Karthik, Great Article. The Bull Call Spread Excel sheet is really helpful. Thanks for sharing this post.

Glad you liked it, happy learning!

In Earlier chapters, you have said that shorting is strictly for INTRADAY. (For Futures we can carry forward). Bem.

My question is, in Bull call spread,

BUY – 1 Lot in – ATM (Sine we bought we can carry forward)

SELL -1 Lot in - OTM (Because we sold, is it that we should buy back in same day?)

So, the option we sold in OTM, can be carry forwarded or will it auto square off on the same day.

Desde já, obrigado.

Short option position too can be carried forward overnight.

Sir, today I know about you and your company through the article which is printed in Eenadu Sunday Book. Sir I wish to learn about stock market. I am a house-wife. I have lot of questions in my mind. Today some it is clear. I want to do work in shares. But I don’t know how I am enter into that. Please suggest me what are the steps I will do.

If I buy a escorts ce 1 lot of 1100 shares for 17 rupees 680 strike and spot at 675. If the spot moved to 682 and the premium increased to 24. Can I sell and close my position. Will 24-17 be my profit? I feel I am missing something here. Por favor informar.

Isso é certo. You can square off the position anytime you wish. Your profit will be Rs.7 multiplied by 1100.

Thanks Karthik for your prompt response, if the trade had gone the other way and the spot was at 670 and the premium going down to 15. I can close my position at 15, so 2 * 1100 rupees loss? Isso é correto?

Can Spread trades be placed on Kite as a single trade or should they be placed as two trades separately?

You will have to place two different trades for this.

Can You please explain the effect of volatility on Bull call spread strategy? Shall we use the strategy when the volatility is high or low?

Since BCS is executed in a 1:1 ratio – the effect of volatility is not really significant. However, as I’ve explained in the chapter, I look at Volatility to decide which strikes to trade.

Obrigado pela resposta rápida.

Sorry, I am a bit confused here. In the chapter, only the effect of time wrt to ITM, ATM & OTM options are explained. Can you please explain how the volatility is used to strike selection?

True, there could be multiple scenarios on Volatility, quite hard to generalize the same. Hence, we have taken up only time.

Using historical volatility and average returns to calculate the upper and lower band of underlying’s movement — is this the method you employ to decide which strike to trade?

Of course, you can use this to decide the strikes as well.

Let me see if I have understood correctly (green plots)….OTM – with longer time to square off, the time decay (theta) > delta (which is close to zero), so the price erodes more…ATM – with more moneyness (less out of moneyness, like a 8400 strike vs a 8600 strike), the impact of theta decay is counterbalanced by delta (which increases) and hence the erosion is slower….whereas for ITM – the delta impact becomes stronger as it gets deeper in money so option value increase due to delta is >> option value erosion due to theta.

Isso é correto?

Second part – for target met in one day, I understand that .1 point gain on a premium of .1 on an OTM is 100% gain (highest) but for far OTM option, delta and gamma are zero so moderate price moves may not impact the premium at all….then how the gain?

You are right with the first part.

Delta/gamma is not zero for OTM, they can never be as time always has a value.

I did some modelling on BS worksheet…very small moves (say 15-20 points on Nifty) actually erode OTM price but yes the inflexion point comes soon thereafter.

One basic question – can one square off bull/bear spreads/ iron butterfly before expiry? if yes, then it suggests that a person can take net credit (say in iron butterfly) and square off immediately with profit…is there some holding period?

I thought about pre-expiry square off of trades in which one gets upfront credit…I reckon that pre-expiry, P/L is a function of premium, which in turn should be driven by perceived risk (moneyness) of the option. So, if I write a put option at a strike of 70 and premium of 5 at a spot price of 100, I get 5 rupees but that is “locked”.

Please let me know if the below scenario correctly illustrates the pre-expiry P/L scenario based on spot price/premium movement:

Spot: 50 60 70 80 90 100* 110 120 130.

Premium : 30 20 15 10 7 5* 4 3 2.

Pre-expiry P/L : -25 -15 -10 -5 -2 0* +1 +2 +3.

The pre expiry P&L is not linear, Vijay. The one that you’ve shown is valid for expiry.

Yes, you can square off before expiry. No holding period as such.

Hi, I was wondering that if I sold an Out of Money put, I will always be in profit. Would not that be a sure shot way of making money?

Example, I wrote an Oct 2017 Put at strike price 9700 and the nifty closed at 9800, then i would pocket the entire premium amount Rs 25335/-

What if its transitions into an ITM?

Hi, I wanted to ask if we could create a bull call spread by using an OTM and ITM option as we do in bull put spread?

You certainly can.

how to evaluate whether volatality high or low to a particular index or stock.

Compare today’s volatility with its historical volatility.

How to find particular stock volatility.

You can do that using a simple STDEV function on excel. I’d suggest you look at chapter 15 – 18 for a detailed understanding on Volatility – https://zerodha/varsity/module/option-theory/

where can we get the historical data, can you help.

Hi, Can’t find the excel sheet. Can you please post the link.

Thanks for making such great module but.

This strategy is suited for traders who hold position till expiry but if we are in the start of the series and target is suppose to hit in next 2 -3 days than is their any strategy for trading based on premiums and how to set stop loss in such condition.

Thnx sir in advance.

You can still go ahead and set up these strategies for non-expiry trades. It’s just that the payoff would be slightly different. Please note, you can deploy any of the strategies we have discussed in this module – they are not necessarily for expiry only.

Thank you sir once again .

sir according to bull spread i have to buy atm and write slight otm.

atm will be 7500.

slight otm 7600.

expected move – 3%

1. above atm and itm are right ?

2. delta of atm is .5 and otm is 0 to 4 so graphs show above based on delta only or delta + gamma or delta+gamma+theta ?

4.whats about volatility? i cant get delta ,& gamma without IV as per black & scholes.

5. sir i don’t get about graphs of atm, otm so please share excel sheet of it.

ATM will be around 7450 or the nearest strike. 7500 is OTM.

The graph is delta only. You can enter the price of the option in the B&S calculator and get the IV. I’ll look for an excel sheet, will share if I get it 🙂

thank you sir please share excel when you get it.

I can’t stay without appreciating your efforts…!!

Things you explain are very clear and believe me they helped me a lot in my professional exams …You are just like an indirect faculty to me …😃😃😃

Really Thanks a lot from my heart…and keep posting more and more on markets and it’s related things…Thank you once again.

Happy to note that, Mohana 🙂

Good luck and happy learning!

Hi I am new to options trading & had done bull call spread for sun pharma in current expiry when the spot price was 573 & it had gone to 603 which was my target & I squared off the strategy at that time. but didnt get the full profit of 14k which was as per calculation. Does it mean that the expiry has to be at or above 600 only then will get full profit? for this strategy to work do i have to wait for expiry?

You will make the full estimated profit (minus the applicable charges) upon expiry. Have you checked the breakeven point for the trade?

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