FIIs EXPOSER IN INDEX FUTURES INCLUDING NIFTY FUTURE @ NIFTY SPOT LEVEL BASIS ON MONTH BASIS FROM JAN 2011 TO APRIL 2011 :-
AFTER ANALYZING THE EXPOSER ITS CLEARLY STATS THAT WHATEVER THE SHORT POSITION HAD CREATED BY FIIs IN JAN 2011 WAS COVERED IN FEB 2011 AND IN MARCH 2011 ALSO CREATED LONG POSITION IN MARCH 2011 BUT FIIs HAVE BOOKED PROFIT IN THEIR MARCH 2011 LONG POSITION IN APRIL 2011 SESSION.
OVER ALL NET LONG POSITION IN MARCH 2011 :- RS. 7252.58 CR. @ 5521.46
OVER ALL NET SELLING POSITION IN APRIL 2011 :- RS. 4731.87 CR. @ 5845.81
SO ITS CLEAR THAT FIIs BOOKED PROFIT 5845.81 - 5521.46 = +324.35 POINTS PER LOT
AND BALANCE IS :- 7252.58 - 4731.87 = RS. 2520.71 CR @ 5521.46 REMAINING LONG POSITION IN MARCH EXPOSER.
BUT IF SEE THE OVERALL EXPOSER THEN FIIs HAVE ONLY RS. 231.57 CR AS NET LONG POSITION:-
OVERALL NET TOTAL LONG POSITION IN FEB 2011 AND MARCH 2011 :- RS. 1968.09 CR. + RS. 7252.58 CR. = RS. 9220.67 CR. @ 5465.69
OVERALL NET TOTAL SELLING POSITION IN JAN 2011 AND APRIL 2011 :- (RS. -4257.33 CR.) + (RS. -4731.87 CR.) = RS. -8989.20 CR @ 5789.06
SO NET LONG POSITION FROM JAN 2011 TO APRIL 2011 IS ONLY RS. 231.57 CR.
NIFTY SPOT TREND ON 3 MONTHS BASIS FROM 28 JAN 2011 TO 29 APRIL 2011
IF WE SEE THE ABOVE CHART, ITS CLEARLY STATES THAT IT IS EXPECTED MORE DOWN SIDE FROM CURRENT LEVEL IN NIFTY SPOT AND CAN GO UP TO 5636.60 - 5617.28 WHICH IS ALSO 50 DAYS MOVING AVERAGE. A STRONG BOUNCE BACK IS POSSIBLE FROM THIS LEVEL.
IF NIFTY SPOT DOESN'T HOLD 5717.71 WHICH IS 30 DAYS MOVING AVERAGE THEN SURELY CAN TOUCH 5636 - 5617.28. IF NIFTY SPOT COMES AT THIS LEVEL THEN TAKE LONG POSITION IN NIFTY.
SO IT IS SUGGESTED THAT DON'T TRADE IN NIFTY ON LONG SIDE IN THIS VOLATILE SESSION...FIRST WATCH IT..THEN TAKE ACTION.....
RESISTANCE :- 5843.91, 5958.73, 6019.56 SUPPORT :- 5668.26, 5607.43, 5492.61
BREAK -EVEN POINT :- 5783.08
MARKET OUTLOOK:- POSITIVE IF ABOVE MAINTAINS 5783.08
NIFTY SPOT CAN TOUCH 5683 - 5668 AND FROM THIS LEVEL STRONG BUYING IS POSSIBLE...
"IT HAD ALREADY SAID IN THE POST IN "NIFTY SPOT CAN GO UP TO 5758 - 5700 - 5688..........12 APRIL 2011" ON BLOG. CHECK THIS....AS TODAY IS CONCERN NIFTY SPOT DID NOT HOLD 5846.11. MESSAGE ALSO HAD GIVEN TODAY "IF DOESN'T HOLD 5846.11 THEN CAN TOUCH 5784.88 AND NIFTY SPOT TOUCHED THIS LEVEL....BUT AFTER THAT AGAIN DID NOT SUSTAIN THIS LEVEL AND AGAIN MESSAGE HAD GIVEN THAT IF DOESN'T HOLD 5784.88 THEN CAN TOUCH 5745.21. TODAY NIFTY SPOT HAS BROKEN THE MAJOR SUPPORT ON 6 MONTHS BASIS THAT IS 5763.64 SUGGESTED IN THE POST "Major Support & Resistance of NIFTY Spot on 6 Months Basis from Nov 2010 to April 2011 - 15 April 2011 " CHECK THIS....SO NIFTY SPOT CAN GO UP TO 5683 - 5668....AT THIS LEVEL STRONG BUYING IS POSSIBLE."
FOR RISKY TRADERS: BUY NIFTY FUTURE APRIL EXPIRY @ 5840 - 5845, STOP LOSS 5813 - 5805, TARGET 5915. CALLS GAVE TO FACEBOOK MEMBERS TODAY ON 15 APRIL 2011 AT 3:09 PM.
NIFTY SPOT CAN GO UP TO 5758 - 5700 - 5688, FIIs HAVE STARTED TO BOOKING THEIR PROFITS IN NIFTY. IN STARTING OF THIS MONTH APRIL CONTINUOUSLY FIIs ARE BOOKING THEIR PROFITS. IN LAST MONTH MEANS IN MARCH FIIs HAVE CREATED LONG POSITION IN INDEX FUTURES INCLUDING NIFTY FUTURE RS.7252.58 CR. @ 5521.46. AND FROM 01 APRIL TO TILL 11 APRIL 2011 FIIs HAVE BOOKED RS. -3862 CR. @ 5856.87. MEANS AND IN THIS MONTH ALSO HAVE STARTED TO BOOK PROFITS IN CASH SEGMENT ALSO. 11 APRIL 2011 IS THE FIRST DAY OF THIS MONTH OF BOOKING THE PROFITS BY FIIs IN CASH SEGMENT AND IS EXPECTED TO CONTINUE THIS BOOKING PROFITS SESSION.
UNDERSTANDING THE CONCEPT OF "IN -THE- MONEY OPTION", "OUT OF -THE- MONEY OPTION" & AT -THE- MONEY OPTION" IN OPTION TRADING :-
IN -THE- MONEY OPTION :- IT IS THE OPTION IN WHICH THERE IS POSITIVE CASH FLOW TO THE OPTION HOLDER MEANS THERE WOULD BE PROFIT IN EXERCISING OR SQUARING OFF THE OPTION.
FOR CALL OPTION IS SAID TO BE IN -THE- MONEY OPTION WHEN SPOT PRICE > STRIKE PRICE MEANS,
POSITIVE CASH FLOW TO THE OPTION HOLDER IN CALL OPTION = SPOT PRICE - STRIKE PRICE
FOR PUT OPTION IS SAID TO BE IN -THE- MONEY OPTION WHEN STRIKE PRICE > SPOT PRICE MEANS,
POSITIVE CASH FLOW TO THE OPTION HOLDER IN PUT OPTION = STRIKE PRICE - SPOT PRICE
EXAMPLE :-
IN CASE OF CALL OPTION : SUPPOSE YOU BUY NIFTY 6000 CALL APRIL EXPIRY @ RS. 43 AND ON THE EXPIRY NIFTY SPOT IS CLOSED AT 6175. IN THIS CASE :-
SPOT PRICE = 6175 ON THE EXPIRY STRIKE PRICE = 6000
SO "FOR CALL OPTION IS SAID TO BE IN -THE- MONEY OPTION WHEN SPOT PRICE > STRIKE PRICE" AND IN THIS CASE THIS OPTION WILL BE IN -THE- MONEY CALL OPTION BECAUSE HERE SPOT PRICE IS GRATER THAN STRIKE PRICE, SO
POSITIVE CASH FLOW TO THE OPTION HOLDER IN CALL OPTION = SPOT PRICE - STRIKE PRICE MEANS, 6175 - 6000 = +175(PROFIT)
IN CASE OF PUT OPTION :- SUPPOSE YOU BUY NIFTY 5800 PUT APRIL EXPIRY @ RS.35 AND ON THE EXPIRY NIFTY SPOT IS CLOSED AT 5715, IN THIS CASE:-
SPOT PRICE = 5715 ON THE EXPIRY STRIKE PRICE = 5800
SO "FOR PUT OPTION IS SAID TO BE IN -THE- MONEY OPTION WHEN STRIKE PRICE > SPOT PRICE" AND IN THIS CASE THIS OPTION WILL BE IN -THE- MONEY PUT OPTION BECAUSE HERE STRIKE PRICE IS GRATER THAN SPOT PRICE, SO
POSITIVE CASH FLOW TO THE OPTION HOLDER IN PUT OPTION = STRIKE PRICE - SPOT PRICE MEANS, 5800 - 5715 = +85(PROFIT)
OUT OF -THE- MONEY OPTION :- IT IS THE OPTION IN WHICH THERE IS NEGATIVE CASH FLOW TO THE OPTION HOLDER MEANS THERE WOULD BE LOSS IN EXERCISING OR SQUARING OFF THE OPTION.
FOR CALL OPTION IS SAID TO BE OUT OF -THE- MONEY OPTION WHEN SPOT PRICE < STRIKE PRICE MEANS,
NEGATIVE CASH FLOW TO THE OPTION HOLDER IN CALL OPTION = SPOT PRICE - STRIKE PRICE
FOR PUT OPTION IS SAID TO BE OUT OF -THE- MONEY OPTION WHEN STRIKE PRICE < SPOT PRICE MEANS,
NEGATIVE CASH FLOW TO THE OPTION HOLDER IN PUT OPTION = STRIKE PRICE - SPOT PRICE
EXAMPLE :-
IN CASE OF CALL OPTION : SUPPOSE YOU BUY NIFTY 6000 CALL APRIL EXPIRY @ RS. 43 AND ON THE EXPIRY NIFTY SPOT IS CLOSED AT 5910. IN THIS CASE :-
SPOT PRICE = 5910 ON THE EXPIRY STRIKE PRICE = 6000
SO "FOR CALL OPTION IS SAID TO BE OUT OF -THE- MONEY OPTION WHEN SPOT PRICE < STRIKE PRICE" AND IN THIS CASE THIS OPTION WILL BE OUT OF -THE- MONEY CALL OPTION BECAUSE HERE SPOT PRICE IS LESS THAN STRIKE PRICE, SO
NEGATIVE CASH FLOW TO THE OPTION HOLDER IN CALL OPTION = SPOT PRICE - STRIKE PRICE MEANS, 5910 - 6000 = -90(LOSS), BUT REAL LOSS IS -43 BECAUSE "IN CASE OF BUYING THE OPTION LOSS IS LIMITED TO THE PREMIUM PAID" AND HERE THE PREMIUM IS PAID RS. 43/-. SO LOSS WILL BE ONLY RS. 43/- ONLY.
IN CASE OF PUT OPTION :- SUPPOSE YOU BUY NIFTY 5800 PUT APRIL EXPIRY @ RS.35 AND ON THE EXPIRY NIFTY SPOT IS CLOSED AT 5850 IN THIS CASE:-
SPOT PRICE = 5850 ON THE EXPIRY STRIKE PRICE = 5800
SO "FOR PUT OPTION IS SAID TO BE OUT OF -THE- MONEY OPTION WHEN STRIKE PRICE < SPOT PRICE" AND IN THIS CASE THIS OPTION WILL BE OUT OF -THE- MONEY PUT OPTION BECAUSE HERE STRIKE PRICE IS LESS THAN SPOT PRICE, SO
NEGATIVE CASH FLOW TO THE OPTION HOLDER IN PUT OPTION = STRIKE PRICE - SPOT PRICE MEANS, 5800 - 5850 = -50(LOSS) BUT REAL LOSS IS -35 BECAUSE "IN CASE OF BUYING THE OPTION LOSS IS LIMITED TO THE PREMIUM PAID" AND HERE THE PREMIUM IS PAID RS. 35/-. SO LOSS WILL BE ONLY RS. 35/- ONLY.
AT -THE- MONEY OPTION :- IT IS THE OPTION IN WHICH THERE IS NO CASH FLOW TO THE OPTION HOLDER MEANS ZERO CASH FLOW WILL BE THERE MEANS NO PROFIT AND LOSS WILL BE THERE, YOU WILL LOSE ONLY YOUR BUYING COST.
FOR CALL OPTION / PUT OPTION ARE SAID TO BE AT -THE- MONEY OPTION WHEN SPOT PRICE = STRIKE PRICE.
EXAMPLE :-
IN CASE OF CALL OPTION : SUPPOSE YOU BUY NIFTY 6000 CALL APRIL EXPIRY @ RS. 43 AND ON THE EXPIRY NIFTY SPOT IS CLOSED AT 6000. IN THIS CASE :-
SPOT PRICE = 6000 ON THE EXPIRY STRIKE PRICE = 6000
SO "FOR CALL OPTION IS SAID TO AT -THE- MONEY OPTION WHEN SPOT PRICE = STRIKE PRICE" AND IN THIS CASE THIS OPTION WILL BE AT -THE- MONEY CALL OPTION BECAUSE HERE SPOT PRICE IS EQUAL TO THE STRIKE PRICE, SO
ZERO CASH FLOW TO THE OPTION HOLDER IN CALL OPTION = SPOT PRICE - STRIKE PRICE MEANS, 6000 - 6000 = 0(ZERO), BUT YOU WILL LOSE YOUR WHOLE BUYING COST WHICH IS RS. 43/-. ONLY.
IN CASE OF PUT OPTION :- SUPPOSE YOU BUY NIFTY 5800 PUT APRIL EXPIRY @ RS.35 AND ON THE EXPIRY NIFTY SPOT IS CLOSED AT 5800, IN THIS CASE:-
SPOT PRICE = 5800 ON THE EXPIRY STRIKE PRICE = 5800
SO "FOR PUT OPTION IS SAID TO BE AT -THE- MONEY OPTION WHEN STRIKE PRICE = SPOT PRICE" AND IN THIS CASE THIS OPTION WILL BE AT -THE- MONEY PUT OPTION BECAUSE HERE STRIKE PRICE IS EQUAL TO THE SPOT PRICE, SO
ZERO CASH FLOW TO THE OPTION HOLDER IN PUT OPTION = STRIKE PRICE - SPOT PRICE MEANS, 5800 - 5800 = 0(ZERO), BUT YOU WILL LOSE YOUR WHOLE BUYING COST WHICH IS RS. 35/- ONLY.
RESISTANCE :- 5940.36, 5972.28, 6025.86 SUPPORT :- 5854.86, 5801.28, 5796.36
BREAK - EVEN POINT :- 5886.78
MARKET OUTLOOK :- POSITIVE IF SUSTAINS ABOVE 5886.78.
AS IT WAS SUGGESTED THAT NIFTY SPOT WILL FACE THE BIG RESISTANCE @ 5875. NOW NIFTY SPOT FACED THE BIG THE RESISTANCE AT THIS LEVEL. IF NIFTY SPOT SUSTAINS ABOVE 5875 AT LEAST 3 DAYS ON CLOSING BASIS, THEN WE WILL SEE THE NIFTY SPOT UP TO 6021 - 6083 IN COMING WEEKS.......
UNDERSTANDING THE CONCEPT OF INTRINSIC VALUE IN OPTION TRADING :-
The intrinsic value of an option is the amount an option holder can realize by exercising the option immediately. Intrinsic value is always positive or zero. An out-of-the-money option has zero intrinsic value.
Intrinsic value of a call option = Spot Price - Strike Price
Intrinsic value of a put option = strike price - Spot Price
Note:-
Spot Price :- The Price at which underlying assets (shares, stocks, index etc.) trades in the Spot Market or Cash Market.
Strike Price :- The Price specified in the Option Contract is known as Strike Price or the Exercise Price.
Example:-
Intrinsic Value of Call Option :-
If you Buy NIFTY 6000 Call April Expiry @ RS. 63 on 04 April 2011 and if NIFTY Spot closes at 6150 on April Expiry date, Then in this case..........
Strike Price = 6000 Option Contract = April Expiry Spot Price on the date of April Expiry = 6150 Option Premium = Rs.63
Intrinsic Value of Call Option = Spot Price - Strike Price means, 6150 - 6000 = +150
So the Intrinsic Value of the Call Option in this case is +150 means this call option is In the Money Call Option. In "In the Money Call Option" Spot Price > Strike Price and there will be positive cash flow to the option holder which is Rs. 150 per lot.
Intrinsic Value of Put Option :-
If you Buy NIFTY 5700 Put April Expiry @ Rs. 60 and if NIFTY Spot closes at 5600 on April Expiry Date, then in this case....
Strike Price = 5700 Option Contract = April Expiry Spot Price on the date of April Expiry = 5600 Option Premium = Rs.60
Intrinsic Value of Put Option = Strike Price - Spot Price means, 5700 - 5600 = +100
So the Intrinsic Value of the Put Option in this case is +100 means, this put option is In the Money Put Option. In "In the Money Put Option" Strike Price > Spot Price and there will be positive cash flow to the option holder which is Rs. 100 per lot.
