Tuesday, November 16, 2010

Don't overpay!

One of the best nifty options to buy is

the option which is 200 points (3-4%) "out-of-money"

in the direction suggested by the rsi!

But what should you pay for it?

From my experience, I feel that 15 is a good price to buy!

If it is much more, it is costly.

If it is cheaper, it is a steal!

e.g. the spot (underlying) nifty price after today's close is 5988.

RSI is suggesting imminent upmove.

6200 CE (around 200 out-of-money) is available at 12.

This is a mouth-watering bargain.

Any trader buying this is likely to double, tripple or quadruple (even more) his investment in a few sessions.

Only two cautions:

1. the option you buy should be favourable to rsi's stance.

2. expiry should be atleast 5 days away.

1 comment:

Anonymous said...

Hi, On 06_Nov_2010 - u gave your nifty outlook in the following link -

http://thebestbusinessintheworld.blogspot.com/2010/11/my-nifty-outlook-6nov10.html

Here u said 59XX not going to see..

Now, it went down to 5907...

I am admirer of your blog - but not on the prediction side; because market can over-throw any one at its own will.