My Bank Nifty Options trading diary

[pannet1]

Just a word of Caution!

Selling more put can bring down hugely. Be careful...

Thanks Subhadip,

I cannot put in words how much thankful I am. But actually I am not selling more than one PUT. If I made you think I am selling more that one and keeping it overnight I am very sorry. If I am selling more than one PUT its only for the intraday. Besides my capital does not allow me to sell 2 puts and hold it overnight. :hug:

 

[pannet1]

6-Mar (Mon)
----
No trade

7-Mar (Tue)

Got -8 points by shorting 20400 Mar PUT :annoyed:

 

[bharathi2005]

GM sir which Time frame chart is above and time.Thankyou.

 

[pannet1]

GM sir which Time frame chart is above and time.Thankyou.

HI bharathi2005,

That's 3Min chart of Bank Nifty Index. But as mentioned, I actually was Short 20400 March Put (MIS).

 

[pannet1]

when market opened ... the Sold March 20400 PUT was showing a profit of about 10 points.

instead of adding another leg (Selling 20500 PUT), by mistake i have covered the long PUT 20500. This is because they are both of same product type (MIS). after some points gain ... repurchased the March 20500 PUT. Anyway the net result was very similar.

covered the 20400 PUT for 16 points. opened a new 19Mar 20500 short. We are in an advantageous position because we are in a Calendar spread now instead of Monthly vertical.

PS: The excel did not seem to change much because i have not added the 8 points lost yesterday.

 

[pannet1]

9-mar
---
there is a ongoing U.P elections. do not know if it's reason behind the vola increase. the day opened with my buy side PUT in 10 point profit and started to increase from there. on the contrary the sold weekly PUT was premium was not increasing that much. this continued the whole day and slowly the spread itself was both showing green.

another observation was whenever the price was moving down the volatility is increasing and and vice versa. this also was displaying a very different behavior. WHENEVER THE UNDERLYING IS INCREASING THE SOLD PUT WAS INCREASING IN PREMIUM INSTEAD OF DECREASING. THE BOUGHT MONTHLY PUT WAS DECREASING INSTEAD OF INCREASING. This posed an interesting challenge ... when the monthly was displaying unrealised profit and if i am bearish i was not able to add another leg this way.

I also did one blunder. Instead of maintaining the 20400 Weekly Short for the overnight, I have converting it into MIS order and it got squared off. Unfortunately I went outside to drop my spouse and when i returned its already EOD.

Till tomorrow morning, I have a unhedged risky monthly long PUT. I am also loosing the time decay of weekly option from today till tomorrow morning.

Result: See how quickly ... just because of the vola increase .. I am very close to breakeven.

Note: The below equity curve will be uploaded every weekend.

 

[pannet1]

The 20400 PE short which i exited as intraday trade automatically at 110 today opened at 70. That's a straightaway loss of 40 points. I immediately Shorted it again today first thing in the morning for 70. if you look at it another way 52.5 bank nifty points is all I require in a month for 3% return.

Another thing is I think I have made a mistake in my excel calculation. Its because I have confused with the entry price and average price. How?

If i bought a instrument for 20 rupees and sold it for 30. I have a profit of 10. Now again if i buy the same instrument for 30 rupees my average price is 25 rupees. this is what i mistook. I will redo my excel and upload before next trading day. Sorry guys and gals

 

[moolan]

Pannetji

hope long put worked.

just read your above post. so the long put is hedged in the morning.

can you update excel sheet.

thank you.

 

[pannet1]

hope long put worked.

We have widened the spread and hence can't expect to take profit everyday. You could have both Long and Short in unrealised loss. That's fine.

just read your above post. so the long put is hedged in the morning.

correct

can you update excel sheet.

updated the excel. there is 5 point difference between the actual and excel. I could not figure out how.

 

[moolan]

pannetji,

just want to analyse

so its choosing weekly short on put/call

and monthly long on put/ call of the same stike.


how we have to select the strike.

spread of 100 points means ( is it the difference between premium price of Monthly and weekly ? )

if we are profit in one leg means within few days what to do ( how to adjust ).

thanking you.