Path to Consistency

[Subhadip]

Any one seen how today VIX increased?

 

[travi]

Any one seen how today VIX increased?

Yes bhai, I'm active here
http://www.traderji.com/derivatives/89068-day-trading-nifty-stock-futures-2504.html#post1211391
That's what I was telling Vivek bhai about IV etc yest

 

[Subhadip]

Yes bhai, I'm active here
http://www.traderji.com/derivatives/89068-day-trading-nifty-stock-futures-2504.html#post1211391
That's what I was telling Vivek bhai about IV etc yest

Have u utilized the knowledge to gain some money?

 

[travi]

Have u utilized the knowledge to gain some money?

Currently only trading BNF, two nice moves
That's why on Friday I asked you that ppl are selling at 14% odd IV.
Today we are near 22% and in couple of days we might even go to 40% in BNO.
so gain from Theta is lesser than Vega loss I guess.
but today option buyer could have gained from IV spike :clapping:

To gain money, selling wasn't favourable that time, but if anyone executes long strangles can workout in next few days just before event.

For shorting, once IV peaks, a short straddle can reap from vega drop intraday itself.

 

[Subhadip]

Currently only trading BNF, two nice moves
That's why on Friday I asked you that ppl are selling at 14% odd IV.
Today we are near 22% and in couple of days we might even go to 40% in BNO.
so gain from Theta is lesser than Vega loss I guess.
but today option buyer could have gained from IV spike :clapping:

To gain money, selling wasn't favourable that time, but if anyone executes long strangles can workout in next few days just before event.

For shorting, once IV peaks, a short straddle can reap from vega drop intraday itself.

Exactly that is the basic.

But u can also gain from position if you can control the vega of your position...

 

[vagar11]

Currently only trading BNF, two nice moves
That's why on Friday I asked you that ppl are selling at 14% odd IV.
Today we are near 22% and in couple of days we might even go to 40% in BNO.
so gain from Theta is lesser than Vega loss I guess.
but today option buyer could have gained from IV spike :clapping:

To gain money, selling wasn't favourable that time, but if anyone executes long strangles can workout in next few days just before event.

For shorting, once IV peaks, a short straddle can reap from vega drop intraday itself.

How many days before the event we should go for long strangle ? How much far OTM option should be?

 

[Subhadip]

How many days before the event we should go for long strangle ? How much far OTM option should be?

Ravi bhai to be answered..

But i am mostly seller, controlling is the view...

If you know that a big event is coming..then why not control Vega.. earn theta..

 

[Subhadip]

In last 15 min almost 1% drop in Vega...

 

[travi]

How many days before the event we should go for long strangle ? How much far OTM option should be?

See from my experience (context BNO), 12-14% are lowest IV values (almost ever, since 2016 weeklies launch) and 38-40% are higher range zones.
Previous day of budget, it went to 40% and on budget day itself, it was around 56-58%.
So if you have one off events, then ideally previous day end is better bcos Vega will compensate for overnight Theta.

Problem with Only selling which Da and I also posted long ago is that it is capital intensive if played properly. If you want to write options, do it well before expiry or and such events, not near any of these two.

Now with regards to UP Elections, I think its just exit polls tomo and I don't know the exact real result date.
IV has no formula, its just fear and greed so need to play accordingly.

 

[travi]

Ravi bhai to be answered..

But i am mostly seller, controlling is the view...

If you know that a big event is coming..then why not control Vega.. earn theta..

Unlike Delta where you can just buy/short the opposite delta, which have UL move relation, which methods do you employ for controlling Vega?