Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Put writers are bullish despite uncertain environment

28 sec read

 
Looks Put writers are not still in the panic mood to unwind their positions from the 4900PE and 5000PE in contrast they built the positions against the market bearisness. The current mood of the Put writers shows absolute bullishness and the confidence of holding 4900 and possibly even 5000 levels on EOD basis. As the world markets are in uncertainity mood its advisable to take any sort of longs with appropriate amout of hedges. Hedges are mandatory in such type of market uncertain market environment.

Low risk traders can initate naked longs on 5100CE(just 1 or 2 lots) CMP Rs84 with SL of 5000 on EOD basis and 4795 on intraday basis. Avoid trading with futures for time being. Mini Nifty is the one of the safest option to trade this kind of uncertain market environment

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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4 Replies to “Put writers are bullish despite uncertain environment”

  1. Kindly explain why do you think its PUT WRITNG and not PUT Buying.
    Does OI increases means WRITING Only. Is it 4700-5000 PUT WRTING and 5300-5400 CALL WRITING ?? Can’t it be 4700-5000 Put buying and 5300-5400 Call writing or vice versa… 4700-5000 PUT WRITing and 5300-5400 Call buying? I want to clear my fundamental in this.

    Thanks in advance

  2. This chart that you have on your website is it real-time, i meant do you update it as and when you get the OI data from the exchange (every 10 mins?)

  3. @Vicky,

    It is an easy concept… ALL the OTM calls during expiry ends worthless. And if you want to capture the premium of those prices you need to write puts/calls till expiry. So that premium declines to zero and you reaps the benifit. i.e you need to hold your open interest position. i.e no unwinding of positon upto expiry to reap the complete profit.

    If you are buying naked calls are puts. When you makes 20% or 30% or even 100% in one or two day definitely you run away taking your profits… i.e you will unwind your position when you got the money.

    So more possibily builing up of huge open interest for many number of days suggest writing calls/puts. And if there is a sudden open interest builtup and getting unwinded in a couple of days then it is just an act of buying naked calls/puts and run away with profits

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