Time for a option play check. How we retailers loose in the ho hollah and make some mistakes. Will explain through 38500CE of this week expiry.
Below is 38500CE chart. You can see that it tried to cross 300 on 7/1/22 and reversed, then again tried to cross 300 levels towards
Below is 38500CE chart. You can see that it tried to cross 300 on 7/1/22 and reversed, then again tried to cross 300 levels towards
ydy close and today open, again reversed. Then one more try was made around 1.30 PM to cross 300 level and again failed. So if you apply some common sense for tomorrow, then this CE will be buy above 300 only, which in turns means expiry above 38500+300 = 38800 level on Thursday.
Now lets see what is the status of the strike in Option Chain. While the PE OI rose by approx 2.00 lk contract today, there was small fall of 5.00 lk OI in this 38500CE. CE having 20LK OI pending, generally wins at the EOD of series. So I wrote small fall.
What will be first sign of short covering in this CE ?? The moment this CE starts to trade above 38500 PE tomorrow, then assume that PE writer are over powering CE writer in the strike. But still playing this CE can lead to accident untill and unless its a clean trending day
tomorrow. So what to do ??? The better strategy will be to go long in 38500CE of next week and short this week 38600/38700CE and create some inbuilt hedge in the trade. If BNF stays above 38800 , then cover the sold leg of weekly CE or else carry. This will allow you to stay in
trade for next week. Because if BNF remains rangebound like today , then the sold leg will take care of all the melting that may happen in 38500CE of next week and u can play the trade for long time.
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