Another Options Trading Diary with the lowest capital of 4500/- only.

[DanPickUp]

I think this is called calendar spread or so... am I right????

rgds
Abhi

Yes, you are right. Some name it calendar call, as it is made only with calls. It is the same like a calendar spread but only more clever traded, than it is shown in the teaching books.

 

[DanPickUp]

Nac and Dan


can u guys explain what are all the possibilities tat can happen wat would be our Position stand at the time of expiry

Hi kalyanisalem

Your question depends very much, how you enter this trade. In teaching books, they show the worst way to enter it. They only show you to enter the trade in once. That is wrong ! Why ? The profit is the lowest and the broker knows exactly what strategy you want to trade. If he is the market maker, he will cheat you. So never show the broker exactly, what strategy you want to trade.

In that case, we went first short with one leg and booked some profit, as time has gone. God if we took the resistance level to sell the option and market now is at support or even lower. We no made some money and the next step in the strategy is no more to expensive, as we already have some money in the pocket and we spend this money to buy the long call.

Now to your question about showing possibility's. Are you running any option analyzing software ? If not, try Options Oracle, as it is a free software in India.

There you can test what ever you want with any entry point or volatility. If you want to go in deeper option trading, you any way need to know how to handle such a programs.

Now I will give you to Nac

Take care

DanPickUp

 

[nac]

^

Kalyan,

Assuming we are initiating this position on 28th oct

6100CE Nov Short @ 113 - Leg 1 (L1)
6100CE Dec Long @ 190 - Leg 2 (L2)

On 5th - L1 @ 246 and L2 @ 342 - Profit of 19 points
On 11th - L1 @ 163 and L2 @ 261 - Profit of 21 points
On 18th - L1 @ 36 and L2 @ 130 - Profit of 17 points
On 25th (expiry) - L1 @ 0 and L2 @ 44 - Loss of 33 points

 

[NiftyFantasy]

Hi kalyanisalem

Your question depends very much, how you enter this trade. In teaching books, they show the worst way to enter it. They only show you to enter the trade in once. That is wrong ! Why ? The profit is the lowest and the broker knows exactly what strategy you want to trade. If he is the market maker, he will cheat you. So never show the broker exactly, what strategy you want to trade.

In that case, we went first short with one leg and booked some profit, as time has gone. God if we took the resistance level to sell the option and market now is at support or even lower. We no made some money and the next step in the strategy is no more to expensive, as we already have some money in the pocket and we spend this money to buy the long call.

Now to your question about showing possibility's. Are you running any option analyzing software ? If not, try Options Oracle, as it is a free software in India.

There you can test what ever you want with any entry point or volatility. If you want to go in deeper option trading, you any way need to know how to handle such a programs.

Now I will give you to Nac

Take care

DanPickUp

You will have to close your position when it is in a decent profits....dont wait till expiry..

 

[DanPickUp]

^

Kalyan,

Assuming we are initiating this position on 28th oct

6100CE Nov Short @ 113 - Leg 1 (L1)
6100CE Dec Long @ 190 - Leg 2 (L2)

On 5th - L1 @ 246 and L2 @ 342 - Profit of 19 points
On 11th - L1 @ 163 and L2 @ 261 - Profit of 21 points
On 18th - L1 @ 36 and L2 @ 130 - Profit of 17 points
On 25th (expiry) - L1 @ 0 and L2 @ 44 - Loss of 33 points

Results are only correct, when entering the trade in once. If you leg in, you will get very different results.

I will go quickly for an other walk in the snow. Will be back soon.

Dan

 

[nac]

Kalyan,

As Abhi said, don't wait till expiry... Get out when you are in profit...

Here your cost of trade is 77 (190-113)... That's the maximum risk and your reward would be lesser than your risk i.e., your risk is higher than reward...

 

[kalyanisalem]

Thanks for ur detailed explanation (Nac & Dan)

Kalyan,

As Abhi said, don't wait till expiry... Get out when you are in profit...

Here your cost of trade is 77 (190-113)... That's the maximum risk and your reward would be lesser than your risk i.e., your risk is higher than reward...

 

[kalyanisalem]

Hi Dan,

we need to book profit in middle are u mentioning of closing both the trades or only short trade which is in profit...

Am working whether this trades needs constant movement in screen
For me i can spend 20 mintutes per hr in market hrs...

one more point we short in october and trades moves in our direction(down) suppose if i carried out the same from tomorrow and nifty take support at 5750 and move towards 6000 how to get out the trade in profit moreover how to preserve my capital..

sorry if am asking silly question...

^

Kalyan,

Assuming we are initiating this position on 28th oct

6100CE Nov Short @ 113 - Leg 1 (L1)
6100CE Dec Long @ 190 - Leg 2 (L2)

On 5th - L1 @ 246 and L2 @ 342 - Profit of 19 points
On 11th - L1 @ 163 and L2 @ 261 - Profit of 21 points
On 18th - L1 @ 36 and L2 @ 130 - Profit of 17 points
On 25th (expiry) - L1 @ 0 and L2 @ 44 - Loss of 33 points

 

[NiftyFantasy]

Hi Dan,

we need to book profit in middle are u mentioning of closing both the trades or only short trade which is in profit...

Am working whether this trades needs constant movement in screen
For me i can spend 20 mintutes per hr in market hrs...

one more point we short in october and trades moves in our direction(down) suppose if i carried out the same from tomorrow and nifty take support at 5750 and move towards 6000 how to get out the trade in profit moreover how to preserve my capital..

sorry if am asking silly question...

You will make small loss if market goes up in this trade.... you will make a small profit only if market goes down... or remain sideways for few sessions....

rgds

 

[DanPickUp]

You will make small loss if market goes up in this trade.... you will make a small profit only if market goes down... or remain sideways for few sessions....

rgds

Ok, seems that you tested the strategy in your home market with your numbers. Now the next question comes in : How to make more profit ?

First question : How much margin in your country for the mentioned spread, if you trade it in once ?

Dan