Great Options Strategy for Zerodha and similar only

[Taurus1]

Good going, Gulu. :thumb:
As I understand it, you are buying the straddle intraday looking for a 50 point move.
The weak point is that the index needs to move 50 points from your buy level.
Profit hinges on whether you are able to buy at the point from which a 50 point move starts.

 

[rajsingh]

NF @ around 5552. Fresh buy each 10 lots

5600CE @ 72/-
5500PE @ 73/-

Carry over trade ????

 

[GuluGulu]

Trade carried over for tomorrow.

GG

 

[msa5678]

Trade carried over for tomorrow.

GG

Tough first day, but still the performance
was good. Keep it up GG.

 

[munde_77]

All the best , Gulu. I am following this thread closely. Thanks

 

[comm4300]

NF @ around 5552. Fresh buy each 10 lots

5600CE @ 72/-
5500PE @ 73/-

Strangle at evey Nifty's xx50 levels looks interesting. Esp when you give it 2 days time. Nifty move well enough to fetch you points.

All the best.:thumb:

 

[log1102]

Interesting thread. I have been paper trading this same strategy for the last few days to see if it can generate profits. Here is a sample trade:

Trade initiated on May 5 - Nifty 5460
5500 Call 78.2 x 50 = 3910 Current value (Nifty 5551) 120.4 x 50 = 6020
5400 Put 75.1 x 50 = 3755 Current value (Nifty 5551) 38.5 x 50 = 1825

Net position is 7945 (current value) - 7665 (on initiation) = 280 profit with 90 point move

Not intraday, so time decay also eating into profits. And my account is with Sharekhan, so trade is in loss after brokerage and taxes

Look forward to this thread continuing... maybe something will come out of it :thumb:

 

[GuluGulu]

Hello,

Holding the position for more than two days can be a loss due to time-decay.

Anyway, there are two strategies I have mentioned - First is openaing a strangle every 50 points and the 2nd one is opening a modified straddle according to some technical trading system bullish or bearish view in 15 min or 30 min chart. 5 min chart can be much noisy.

I shall try to refine the strategy, for example, for a bullish view, I shall buy 3:2 Callut, or 5:4 Callut (in lots) at different point of Nifty.

For this, I have divided the 100 point NF range in this way, say, from 5500 to 5600

5500, 5525, 5550, 5575, 5600

You will see most of the times, Nifty tests similar figure like 5512, 5547, 5582, 5485, 5626 etc. So I shall initiate or square-off trades close to that levels.

Now it is my study to determine which Callut ratio at those different level has the best risk-reward ratio for both bullish and bearish market.

The main beauty of this trade is very psychological, as far as this applies to me:

For example, take today’s trade.

When market opened and came down to at around 5550, I bought those options with a bullish view. – Instead, with the same money I could have bought 4 lots NF.

Now think of the time when trade goes wrong, and one time Nifty touches very close to 5500 – my maximum loss was less than 2000/-. But if I would have initiated the NF buy, it would reach a M2M loss of around 10,000/-. This is very serious.

At this point, any student trader like me shall either try to average the position by buying another 2 or 4 lots of NF with more money, with a hope that NF will rebound. But things can go wrong more, NF can go to 5485. God knows. So, the trader will face more loss and more psychological pressure. Fortunately today that did not happened.

But in this Strangle buy case, trader will remain worry free – for two reasons – 1. the loss is substantially less, and moreover – the trade can move into profit if NF moves even further below. And then again, at that low level, we can initiate another suitable trade

This is the point of interest.

Tomorrow, if the open position losses increases, accordingly I shall book the loss, and open a new fresh position accordingly at that point.

GG

 

[GuluGulu]

This is the worst case scenario for this Strangle.

NF dancing around 5550 with very small range - eating the premium. Anyway - perhaps it is readying for a big move UP or DOWN - Lets, see.

GG

 

[GuluGulu]

Sold 5600CE @ 75
5500PE @64

Loss 6/- per lot

Now taken Bullish 3:2 C position @ 5600CE, 5600PE June series, @ 161, 158

June series choosen to avoid time decay - if needs to carry overnight.

GG