My Bank Nifty Options trading diary

[pannet1]

just want to analyse

so its choosing weekly short on put/call

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

Correct

how we have to select the strike.

If you are little afraid that soon BN will go south then choose your strikes below the current price. The short strike one step below the Long strike.

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

Nope. Its the strike price differences between long and short Puts for example.

MONTHLY PE 19500
WEEKLY PE 19400

(or)

WEEKLY PE 19500
MONTHLY PE 19400

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

Add another leg (trade #3) to the profiting side. Trail stop the profiting leg (trade #2). Assume the loosing trade is trade #1.

 

[moolan]

pannetji,

Add another leg (trade #3) to the profiting side. Trail stop the profiting leg (trade #2). Assume the loosing trade is trade #1.

#3. so if i am profit in short PE ..I need more margin ( how I can add one more short PE)

#2. how to trail stop the profit (give example)

#1. how we can define loss booking here ( is there any range of upside and downside).

 

[pannet1]

pannetji,

Add another leg (trade #3) to the profiting side. Trail stop the profiting leg (trade #2). Assume the loosing trade is trade #1.

#3. so if i am profit in short PE ..I need more margin ( how I can add one more short PE)

Good question. Convert The trade#2 from NRML to MIS. trade#3 is also MIS.

pannetji,
#2. how to trail stop the profit (give example)

This is upto you. For example, if trade#2 is in 15 point profit. we enter trade#3. Then we put a stop for trade#2 at 7 point difference. (8 point below)

pannetji,
#1. how we can define loss booking here ( is there any range of upside and downside).

We never book loss at this point. We may have to close trade#1 only when the price moves far away from your original entry point. say above 500 points and then open another long.

ideally when you close the long. your small profits will be far more than the loss in closing the long.

 

[moolan]

pannetji,


trade #1 and #2 and #3 means trading a particular leg . Am i right.

 

[pannet1]

pannetji,

trade #1 and #2 and #3 means trading a particular leg . Am i right.

no. moolan.

i am sticking to the original analogy.

trade#1 - long loosing put
trade#2 - short winning put
trade#3 - additional short leg put added on intraday basis

 

[moolan]

pannetji

now the short weekly option is at 2.85 (16mar1720400PE)
MONTHLY LONG AT 55 (30MAR1720400PE)

is there any adjustment made.

 

[pannet1]

pannetji

now the short weekly option is at 2.85 (16mar1720400PE)
MONTHLY LONG AT 55 (30MAR1720400PE)

is there any adjustment made.

correct.
short option squared 1st thing in the morning for 3.05
fresh short of 17th March 21000 PUT opened at 81.00.

this is risky in case we have downward movement tomorrow. but we need to take this risk to cover 100 point unrealized loss as of now.

 

[moolan]

pannetji,

do the DELTAS equal now.

 

[pannet1]

correct.
short option squared 1st thing in the morning for 3.05
fresh short of 17th March 21000 PUT opened at 81.00.

this is risky in case we have downward movement tomorrow. but we need to take this risk to cover 100 point unrealized loss as of now.

I have trailed the SL at a premium of 73 for the new weekly short mentioned above. it got hit near the close of the market. Since I am such a coward I opened another fresh short of 23rd March for a premium of 150.

will update the excel sheet.

 

[pannet1]

pannetji,

do the DELTAS equal now.

with this strategy the Deltas (of the Monthly and Weekly) will be never equal. But we are trying to manage the difference through our additional leg with our directional bet.