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Earn 180% profit through nifty strategy

Discuss Earn 180% profit through nifty strategy at the Advanced Trading Strategies within the Traderji.com; Originally Posted by veeemkay Yout trading style is similar (not same) to linkon7's. you might ...


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  #11  
Old 14th July 2012, 08:44 PM
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Default Re: Earn 180% profit through nifty strategy

Quote:
Originally Posted by veeemkay View Post
Yout trading style is similar (not same) to linkon7's. you might want to check the link

http://www.traderji.com/futures/4190...per-month.html

would help you a lot to understand about the ups and downs. All the best.

VK
Dear Veemkay,

Thanx!! Found it interesting learned a lot!!!


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  #12  
Old 14th July 2012, 08:52 PM
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Default Re: Earn 180% profit through nifty strategy

Quote:
Originally Posted by DanPickUp View Post
Dear rajgiri21

The name of the strategy: Covered call. Risk capped and reward capped.

What you now mention is to increase your reward through trading the future beside the short itm call. Can be done, no question about that. You also mentioned one loophole which are the gaps. (Linkon7 is a future trader and sits in front of his terminal. So he not trades the future above or under a fixed level. In that way he is in control of the strategy.)

The way you want to trade the strategy can look a bit different in reality: Why?

The option must not behave one to one to the future. I do not mean the delta, I speak about the volatility. Your calculation is only done on the basis of the delta factor but in reality the vola factor will or can hurt you.

If market gaps down, vola will jump up and that will increase the price of the long and short options. This increase can be heavy. So, there is no guarantee of profit atoll in case you run into a down trend or into an uptrend.

Ok, you can say in case of a down trend: Never mind, my future got stopped out and now I wait until the short calls expires. Question: Can you stand it? At the same time there will be also no kind of trading any future.

In case of an uptrend: You have to be able to sell your short call at a certain time. Now it depends how much you have to pay for the call and the different from the short to the long call price is what the future has to bring. If now market turns a bit later and suddenly jumps down again, you have to be a clever trader to manage it. Short call was bought back and future now is stooped out through the stop loss.

If you implement such a covered call, be sure that market is in sideway mode and do not trade the future unless you are in control of the situation like Linkon7 is.

Good trading

DanPickUp
Dear Dan,

Thanx alot for the time u have spent on my post!!! I have seen ur replies on other threads as well and u seem to have a lot of experience!!

I am an active trader as well and i sit in front of the terminal!! So i thought the moves of nifty futures can be controlled by me and all i need to do is sell when it goes below 5200 and buy back again if it crosses 5200!!! Other volatility etc was ignored by me coz on expiry everythg will go off and the actual premium remains!!! This is how i thought!!

And i agree with you that doing it practically will not be as easy as it looks and as u said everybody knows this and they r unable to do it!! So i have not made any gr8 innovation here and tatz the same reason why i posted it here!!!

Technically if it seems ok then i wil try n implement it as best as possible!!!

Pls let me know if anythg needs to be added othr than selling nifty once it breaks 5200 on the downside and buying it back once it reaches 5200 on the upside!!!

I have initiated this as mentioned above in post!! Wil let u know if i made any profits or any hurdles which i face!!!

Thanks again!!!
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  #13  
Old 14th July 2012, 08:54 PM
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Default Re: Earn 180% profit through nifty strategy

Quote:
Originally Posted by timepass View Post
Hello Dan, it seems to me that he will make a loss only if NF expire below 5100 on 31Aug, in all other eventualities it may be a profitable trade.
Dear Timepass,

Yeah exactly!!! thatz how i believe it!!! I wil end up in loss only if nifty expires below 5100!! tat too can be avoided if i sell nifty @5200!!! Thanx!!!
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  #14  
Old 14th July 2012, 09:02 PM
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Default Re: Earn 180% profit through nifty strategy

Quote:
Originally Posted by DanPickUp View Post
Dear Gunsho

As you traded the idea, you also recognized the challenge it takes to end in profit when trading the future live beside having the short call.

The strategy as it is by it self is a closed one. Nothing to add and it is not recommended to change any thing in it. Why?

It is a perfect very simple hedge strategy from two legs. Any change in it to three legs or what ever needs also a change of hedging.

Good trading

DanPickUp
I wasn't doing covered call. What I did was Short Straddle + long/short above/below strike price, more or less the same. In a different way to see it, covered call above strike price. covered put below strike price + one leg on the opposite side. This way, aim is to keep the premium completely with us. Whichever leg is loosing, future will cover it.

Few months, we get chance to purchase protective legs (when it goes up and down the strike prices considerably), purchase strike price+100 put/call at a discounted rate. Leading to nothing but a profitable Iron Condor. Apart from this, nothing at least occurred to my mind to add/change Do en-light us, if there is something more is hidden

Hedging wasn't the challenge I faced. For me maintaining the future trade was the challenge. Wish to learn the same...

Last edited by gunsho; 14th July 2012 at 09:37 PM.
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  #15  
Old 14th July 2012, 09:02 PM
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Default Re: Earn 180% profit through nifty strategy

Quote:
Originally Posted by gunsho View Post
Dan, Giri also says, he will buy the future again when it goes >5200.

What I understand from Giri's post is, sell 5200 CE. Always stay long Futures >5200. Stay like this until expiry. I think, he doesn't want to buy back the CE when it goes up. Leave it until expiry. He seems to be interested only in the premium. Basically as you said Covered call .
Dear Gunsho,

Thanx!! Yeah exactly i am interested only in d time premium!!! I have initiated this idea yesterday so i would let u know the pros n cons!!

May be staying above n below a round number in d nifty can be a challenging task!! So even i would take tat 30 points wat is mentioned in linkon 7... but then it can again be like market goes up n down around tat level like wat it has happened how @ 5250 or 5280 levels!!!

But we have 100 points to play for and even if we lose 30-40 points towards this risk still it will be a profitable trade!!!

Still looks clean in paper should try n see!!! lets see!!!

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  #16  
Old 14th July 2012, 09:05 PM
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Default Re: Earn 180% profit through nifty strategy

Dear rajgiri21

Deleted the rest of the post as Gunsho has already posted one idea.

Crossover from just one idea.

DanPickUp

Last edited by DanPickUp; 14th July 2012 at 09:11 PM.
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  #17  
Old 14th July 2012, 09:06 PM
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Default Re: Earn 180% profit through nifty strategy

Quote:
Originally Posted by DanPickUp View Post
Dear Gunsho

As you traded the idea, you also recognized the challenge it takes to end in profit when trading the future live beside having the short call.

The strategy as it is by it self is a closed one. Nothing to add and it is not recommended to change any thing in it. Why?

It is a perfect very simple hedge strategy from two legs. Any change in it to three legs or what ever needs also a change of hedging.

Good trading

DanPickUp
Dear Dan,

Yup!! Many ppl have discussed abt adding a put option in this strategy which i always fely confused!! May be am not tat knowledgeable or i felt convinced thr is nothg to add to this as looks very simple!!!

But pls throw some light why ppl wat to buy a put option in this!!! Does tat make it more riskier as its more like staying short in nifty???

Thanks!!
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  #18  
Old 14th July 2012, 09:09 PM
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Default Re: Earn 180% profit through nifty strategy

Quote:
Originally Posted by rajgiri21 View Post
Dear Gunsho,

Thanx!! Yeah exactly i am interested only in d time premium!!! I have initiated this idea yesterday so i would let u know the pros n cons!!

May be staying above n below a round number in d nifty can be a challenging task!! So even i would take tat 30 points wat is mentioned in linkon 7... but then it can again be like market goes up n down around tat level like wat it has happened how @ 5250 or 5280 levels!!!

But we have 100 points to play for and even if we lose 30-40 points towards this risk still it will be a profitable trade!!!

Still looks clean in paper should try n see!!! lets see!!!

The idea is good Giri . Not doubt about it. And there will be months where we market will have less whipsaws. To reduce that, we can pick this strike price when it is bouncing back from a good resistance or up from support. 100 points is less or more, depends on the time frame we are planning to watch/trade. I am sure we will learn something from this thread.

Humble request to change the title, if you are ok. Cause that is not the main goal for any of us I believe .
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  #19  
Old 14th July 2012, 09:13 PM
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Default Re: Earn 180% profit through nifty strategy

Quote:
Originally Posted by DanPickUp View Post
Dear rajgiri21

Deleted the rest of the post as Gunsho has already posted one idea.

Crossover from just one idea.

DanPickUp
Dear Dan,

Thanks!!! Yeah if i sell a put i wil be getting the premium of tat as well!!! But again does tat increase my risk?? coz as it looks my call n put will give me the total time premium of both the options!! But why would i need a nifty future then wont i make loss in that or is tat covered??

Sorry if am found naive, am a bit new to these hedging strategy n all!!
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  #20  
Old 14th July 2012, 09:17 PM
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Default Re: Earn 180% profit through nifty strategy

Quote:
Originally Posted by rajgiri21 View Post
Dear Dan,

Thanks!!! Yeah if i sell a put i wil be getting the premium of tat as well!!! But again does tat increase my risk?? coz as it looks my call n put will give me the total time premium of both the options!! But why would i need a nifty future then wont i make loss in that or is tat covered??

Sorry if am found naive, am a bit new to these hedging strategy n all!!
Giri, you will find answers in below post. Nicely explained with pictures.

http://www.traderji.com/futures/4190...tml#post443841

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