.but the real situation is difficult..
That's why I came here. Need lil bit of guidance from seniors.
Upper protection is there till 11100
will u wait till expiry? Will there be any panic?
I really donno what to expect. That will be uncharted territory for me. I haven't experienced any emotional things in options trading. But I guess I can handle 10k loss max.
I really don't know anything about what to do in such scenario. What are the course correction strategies if strangle/straddle goes wrong? How the adjustments are done in options trading? which position to square? which position to create? So I certainly need as much guidance as possible.
But here is what I think I will do, as per my guesses. -
1. The delta neutral strategy is initiated keeping in mind 2 predictions from various sources - a. Nifty will remain range bound in May series with immediate Resistance at 10700 and support at 10500. The OI data also suggested the greatest OIs at 10400, 1500, 10800 and 11000. Also Max Pain in at 10600.
b. Few other sources talk of more probability of downside than upside if above prediction of range-bound Nifty goes wrong and Nifty decided to move one side.
In case of range bound and downside I will pocket whole of the premium (30K) while CF the Fut as Mother trend is UP.
2. But if Nifty index breaches 10800 (1 sd) by this weekend (11 May), negating both of the predictions, then -
I will square off the FUT and CE and pocket in the 12500 profits.
But I am thinking of squaring off only the CEs shorts by booking the 15k loss and continuing the Fut for next targets of 11k.
So
@Subhadip
1. Is there any correction, improvements required in this strategy? This is my 2nd options trade only.
2. If not, then still are there any better alternatives?
3. Is my flow of reasoning right? or are there some crucial points that I have missed?
4. Any other suggestions. I am scared seeing today's move!