Beware of STT When Trading Options
Many people who trade options towards the last week of expiry have been excited by the volatility this month – coming after nearly a year of relatively sane trading. Options have high implied...
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MV Chronicles: Downside Protection and Understanding Margins
The last two MarketVision Chronicles have some awesome (we’re modest) pieces for you. (You’ll need to register, and it’s Free!) Sep 12: Protecting the Downside Protecting the downside: Three Option...
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The Derivative Alternative
(From my article at Yahoo) While derivatives have been called weapons of mass destruction and worse, they can provide alternative methods to participate in the markets. To a bystander, these...
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The Pricing of Options: MV Chronicle
The Latest MarketVision Chronicle has a piece about the Pricing of Options: (Registration required, free) There are two parts to an option – the intrinsic value and the time value. If a call option’s...
View ArticleFree Webinar: The Basics Of Trading Options
As part of MarketVision, I’m conducting a free online webinar on trading options, at WizIQ: Contents A *very* brief introduction to the concept What price is the right price? The Greeks! Big Profits,...
View ArticleOptions Webinar: Changed Link
Folks, the Free Options Webinar I’m conducting has a changed link, because WizIQ decided I hadn’t conducted my class when in fact, I am only guilty of not having my time travel machine ready since the...
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VIX Not Indicating Panic Even As Market Slides 3%
While broad markets fell 3% today, the biggest intra-day move in more than a year, it seems the Volatility Index (VIX) based on option premiums wasn’t hitting any peaks. With a figure of 19.19, the VIX...
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Ooh, I Spoke Too Soon on No Volatility in 2013
Remember when I said that there were no 2% days in 2013, and I was worried? That was April 10, we’re now just two months and 10 days ahead, and we’ve already had six 2% days since. What I said then...
View ArticleNSE Halves Inter-Strike Distance from September
NSE has changed the Nifty strike prices to be 50 points between strikes, rather than the 100 points it is now. In a circular, the new strikes will magically appear after August 30, 2013. Given the...
View ArticleDon’t Override Your System; stay FAT
So today was a crazy day. We were long four stocks and short one - Cairn - as our system threw out the trades. Within a few minutes we noticed that there was a strong move up - and after…
View ArticleUpdate: Ranbaxy up 3%
So since my last post…, Ranbaxy's September future has scaled up to 414, a 3% increase. I'm still holding; it seems to have some steam left. Let's see how the next few days go. The spot price is still
View ArticleStrangle Strategy – 50% gain on a low frequency system
I wrote about a Straddle/Strangle strategy in the early part of the month, saying that if the spread narrowed I would pick it up, because we were ripe for a large move. So last thursday, with the Nifty...
View ArticleNSE changes Lot Sizes for F&O, Finally
After SEBI standardised lot sizes, the National Stock Exchange has not acted to change the lot sizes, resulting in the unhappy situation of my not being able to take on a Tata Motors contract because...
View ArticleHow does Option “Exercise” work?
Reader M writes in: I read your article “Of Options and Choices” posted today. […] It would be helpful if you can through some more light on American Options w.r.t. Indian Markets. I know the basics of...
View ArticleStock Options Go European from Jan 2011
According to the NSE: (Thanks to @Prashant_Krish) In pursuance of SEBI circular no. CIR/DNPD/6/2010 dated October 27, 2010 regarding European Style Stock Options, circular no. 120 (Download no. 16165)...
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Premium: The Concept of Max Pain in Options
This is an archive for Capital Mind Premium subscribers. Options are a strange beast. Most options expire worthless, and this has been demonstrated in the US (read: Do Options Sellers Have a Trading...
View ArticlePremium: A Recap of MaxPain, Market Volumes and ICDR
This is an archive for Capital Mind Premium subscribers. Sent on December 26. Firstly hope you had a Merry Christmas! The Big Max Pain Pointlessness …
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Optionalysis: Portfolio Trades In a Trending Market
This is an archived post for Capital Mind Premium subscribers, sent on Feb 03, 2014. Click here to know more! In today’s Option Strategy we’ll run through a trading plan for the next day. While the...
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Optionalysis: Entering Three Trades And Watching Two Die On Us
This is an archive for Capital Mind Premium Subscribers, sent on 04 Feb 2014. Subscribe now! Following up on yesterday’s post on potential option entries, we took up three trades today. And saw two of...
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Optionalysis: An Introduction to Option Pricing and the VIX
This is a Capital Mind Premium post sent on 07 Feb 2015. You can subscribe at http://capitalmind.in/subscribe . Here’s an introduction to the VIX, the Volatility Index. The VIX is a volatility index...
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Optionalysis: How STT Affects Option Prices (Plus, Portfolio Changes)
This is an archive for Capital Mind Premium subscribers, sent on Feb 8, 2014. A number of options traders start taking positions and hold them too long, and then we have the uniquely Indian situation...
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Optionalysis: Exit Strategies When You’re Making a Loss
This is an archive of Optionalysis, for Capital Mind Premium subscribers, sent on Feb 18. 2014. Subscribe now! In Optionalysis today, let's talk about exit strategies, where we find ourselves in a...
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Premium: Implied Move in Stocks From Straddle Ranges
This is a Premium Post for Capital Mind Premium Subscribers, sent on March 9, 2014. Volatility is part of all markets. Prices will fluctuate because they are supposed to. As investors it is not in our...
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Optionalysis: The MA20 Tells Us The Nifty Might Reverse From Here
This is a post for Capital Mind Premium subscribers. At Capital Mind we'll question our own theories constantly. Nothing is sacred because nothing in investing is. You could tell me that we should...
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Optionalysis: Option Strategies for Election Moves
This is a Capital Mind Premium post; subscribe now for full access. How do you setup option positions for elections? We saw this question in the premium group today and we were hoping to expand on...
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Optionalysis: Disbalanced Strategies, and Trading a High VIX
This is a post of Capital Mind Premium subscribers. The VIX has gone bonkers. The Volatility Index, measured as a level of option implied volatilities on the Nifty, has touched 29 after being at just...
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Optionalysis: How To Choose Option Spread Strike Prices to Buy or Sell
This is a post for Capital Mind Premium subscribers. How does one figure out which options to buy or sell? Each stock has calls and puts, different strike prices, different lot sizes. You don’t know...
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Optionalysis: Election Fever – Which Options To Sell, Which Options To Buy?
This is a Capital Mind Premium post, sent on April 24, 2014. Elections are here! Or at least, the results will soon be. Anticipating a lot of volatility we are seeing stock and index options trade at...
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Optionalysis: Earning Money From The Stocks You Own
What if you have a bunch of stocks that you own, and you want to earn money from them? One way, of course, is to wait for dividends, but those will come anyway and probably just once a year.… (Read...
View ArticleThe VIX Is Close to All Time Lows; But Does That Make Options Worth Buying?
The VIX has touched close to an all time low at 13.07, and at this point options aren’t just cheap, they’re the cheapest they’ve ever been. Since the Vix is really the implied volatility… (Read On...)
View ArticleSEBI Increases Lot Sizes to Rs. 5 lakh from November, Index and Stock...
SEBI has changed the game for derivatives traders. A new circular (HT Vashistha) has increased the lot sizes of each contract, so that: The minimum contract size has been upped from Rs. 2 lakh to Rs. 5...
View ArticleWarning: December 2015 F&O Contracts Will Need To Be A Multiple Of 75, You...
Lot sizes for Futures and Options contracts starting November are increasing, and the Nifty will go to a lot size of 75. What happens, then, if you had bought LEAPS (Long Term Options) of December...
View ArticleInfy Options: Action In The Calls
Infy results are out tomorrow and there seems to be substantial action in the call options of the stock. The … (Read On...)
View ArticleMargins – an NSE FAQ
NSE has released a detailed article on margins and how they are calculated. While some elements here are mathematical you … (Read On...)
View ArticleLong Term Nifty Options from March 3
NSE has announced new longer term Nifty options, starting March 3. Apart from the current structure (Current Month, Next Month … (Read On...)
View ArticleNo more margin tension for the calendar spreaders
SEBI has released a notification that calendar spreads (buying one month’s future and selling another) would no longer require margin … (Read On...)
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