How to sell options at expiry

[Options_Trader]

It is better to make calendar spreads at expiry. This is a safe strategy with decent returns and minimal loss. You can make the spread on Friday morning week prior to expiration and book it on Thursday(expiry day). Strike price chosen will depend on the market direction. E.g. If you are anticipating that the market will remain between 6750-6850 go for 6800 strike.

Short strangles and straddles can produce better returns but are slightly high risk. Do not leave overnight position with short strangles.

Hope this helps.

P.S. This is my first post in Traderji. would love to have a discussion if you do not agree with me.

 

[munde_77]

I am not here to show someone my talent. I am here to just guide people. God has given brain to every human being to apply the same.

Earlier i have created very nice thread and I was planning to guide step by step everyone how to make trades profitable comfortably. But some people came in between and drive the thread to some other direction which make the moderator to close the thread forcefully.

This time i not repeat same mistake. People when get information free of cost they start considering as junk and once that is paid is more valueable to them.

But yes if someone say something which is not applicable in real trades I may comment but that does not mean i am hurting someone. Only way to be successful in this field is study, study and study initially and once you capable then play comfortably.

Post here how to initiate the option trade on expiry day and hedge. Tomorrow is expiry so post soon. :thumb:

 

[munde_77]

It is better to make calendar spreads at expiry. This is a safe strategy with decent returns and minimal loss. You can make the spread on Friday morning week prior to expiration and book it on Thursday(expiry day). Strike price chosen will depend on the market direction. E.g. If you are anticipating that the market will remain between 6750-6850 go for 6800 strike.

Short strangles and straddles can produce better returns but are slightly high risk. Do not leave overnight position with short strangles.

Hope this helps.

P.S. This is my first post in Traderji. would love to have a discussion if you do not agree with me.

Calendar spread is also not safe if you don t know how to manage them

Straddles and Strangles can be left as overnigh position provided it is always hedged with Otm/far otm calls and puts.

I sold April and Bough May (Paper Trade) Calendar spread. Check from start of this expiry month

. It is showing around - 100000 lakh loss on 12 lots

 

[Somatung]

It is better to make calendar spreads at expiry. This is a safe strategy with decent returns and minimal loss. You can make the spread on Friday morning week prior to expiration and book it on Thursday(expiry day). Strike price chosen will depend on the market direction. E.g. If you are anticipating that the market will remain between 6750-6850 go for 6800 strike.

Short strangles and straddles can produce better returns but are slightly high risk. Do not leave overnight position with short strangles.

Hope this helps.

P.S. This is my first post in Traderji. would love to have a discussion if you do not agree with me.

Hi Options_Trader

Welcome in the forum. You did a fine first post in the forum. :thumb::clapping:

To stand the next one: How would you reduce your risk over night when doing such a short strangle or straddle?

Second question: Which leg would be short or long in your calendar spread?

And by the way: There is no safe strategy. Just good risk management.

Do not be afraid of us / Take care and see you around

 

[hariom5109]

It is better to make calendar spreads at expiry. This is a safe strategy with decent returns and minimal loss. You can make the spread on Friday morning week prior to expiration and book it on Thursday(expiry day). Strike price chosen will depend on the market direction. E.g. If you are anticipating that the market will remain between 6750-6850 go for 6800 strike.

Short strangles and straddles can produce better returns but are slightly high risk. Do not leave overnight position with short strangles.

Hope this helps.

P.S. This is my first post in Traderji. would love to have a discussion if you do not agree with me.

ok bhai can we work in long strangles after expiry and leave position for 1-4 days (if the market will remain in range between as a example you have given above and book profit after the price goes above or below the strike price .

 

[Options_Trader]

Calendar spread is also not safe if you don t know how to manage them

Straddles and Strangles can be left as overnigh position provided it is always hedged with Otm/far otm calls and puts.

I sold April and Bough May (Paper Trade) Calendar spread. Check from start of this expiry month

. It is showing around - 100000 lakh loss on 12 lots

Totally agree with you. However, calendar spreads are not meant to be held for long duration (I would say about 7-10 days). Calendar spreads are made to take advantage of the rapid theta decay of the near month option. It also gives you a decent safe range and limited loss even if market moves strongly against you. Risk reward is favorable with this spread.

 

[Options_Trader]

Hi Options_Trader

Welcome in the forum. You did a fine first post in the forum. :thumb::clapping:

To stand the next one: How would you reduce your risk over night when doing such a short strangle or straddle?

Second question: Which leg would be short or long in your calendar spread?

And by the way: There is no safe strategy. Just good risk management.

Do not be afraid of us / Take care and see you around

Thanks for welcoming me Somatung.

For short strangles:
For index options, overnight risks are generally on the downside, so I will hedge the strangle with an OTM put. However, for stock options, if I decide to hold the strangle, I will buy both OTM call and put options as stocks can be affected dramatically on either side by overnight news.

For calendar spreads:
Usually, I short near month to take advantage of high theta decay. And I agree with you, a better word will be relatively safe.

 

[Options_Trader]

ok bhai can we work in long strangles after expiry and leave position for 1-4 days (if the market will remain in range between as a example you have given above and book profit after the price goes above or below the strike price .

With long strangles you are fighting time decay. It is advisable to go long strangle only if the market trends or you expect a volatility increase. In sideways market long strangles will eat away your premium. Having said that, the time decay is quite low at the start of a series, it might be a good idea to go long. But at least reduce your loss from time decay by selling OTM options.

 

[hariom5109]

ok opt. trader bhai i really agree with that that the time decay will effect , dont mind can u please tell what factors i have to look for making an perfect strangle ,
and suppose i am looking at a stock which is standing at 1220 and the difference between strike prices are of rs 20 ( 1200 , 1220 , 1240 , 1260 and so on ) i expecting the prices to go further above or below (1200-1240) in 1-3 days or may be a same day , so i created strangle ,

i buy otm put of 1200 strike at premium of 45 ( or what it may be )
&
i buy otm call of 1240 strike at premium of 47 ( or what it may be )

so at 3rd day the price is 1243 .

my question is when i should profit
1. can i book at this price (1243) and cut the both put and calls

or

2. when the price goes above 1240+(premium47)=1287

please guide

 

[Options_Trader]

ok opt. trader bhai i really agree with that that the time decay will effect , dont mind can u please tell what factors i have to look for making an perfect strangle ,
and suppose i am looking at a stock which is standing at 1220 and the difference between strike prices are of rs 20 ( 1200 , 1220 , 1240 , 1260 and so on ) i expecting the prices to go further above or below (1200-1240) in 1-3 days or may be a same day , so i created strangle ,

i buy otm put of 1200 strike at premium of 45 ( or what it may be )
&
i buy otm call of 1240 strike at premium of 47 ( or what it may be )

so at 3rd day the price is 1243 .

my question is when i should profit
1. can i book at this price (1243) and cut the both put and calls

or

2. when the price goes above 1240+(premium47)=1287

please guide

Gains obtained by small moves will be offset by the time decay. Profit booking depends on your target, trading style, and your view of the future movement of the stock.

I would like to point out that I am a newbie when it comes to actual trading.
I have had limited success applying option strategies. I am currently trying to learn technical analysis so that I am able to take right positions. would welcome any suggestions and strategies.