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:
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.
Post a Comment