Saturday, 5 October 2019

How do we identify good option writing opportunities?

Following are some of the indicators that can be used to identify good options writing opportunities:
  1. Implied Volatility: This is one the Options Greeks, and is also one of the main components in Options Pricing. While there is no upper limit to which IV of any option contract can go, keeping a track on a daily basis can give a fair idea of the range in which the IV of an individual option contract trades. Whenever you see the IV breaking its upper range, you can Short the option. The success rate using this indicator is relatively high, as IV tends to relax after breaking out, giving a faster decay in options premium. This can also be used with Delta hedging strategy, to avoid naked options writing. To the best of my knowledge, historical IV is not available, or is available in “paid data” form by certain vendors. So, in order to make best use of this strategy, you may have to start tracking IVs of the contracts you wish to trade in, and then trade accordingly.

Thursday, 3 October 2019

What are the stocks that play a vital role in the movement of Nifty 100?

Nifty 100 comprises of 100 stocks, having different weightage in the index.
Top 10 stocks with maximum weightage are:
  1. HDFC Bank Ltd: 9.30%
  2. Reliance Industries Ltd : 8.26%