Premium Eating Strategy - BankNifty Weekly Options

[Probability]

Position:
30Aug Short 27600PE+CE total credit pts 740

9Aug Vertical Bull Spread at 27900CE and 27400PE total debit pts 39.65

IS this correct ? 27900 CE 85 and 27400 PE is 38 total debit 123

 

[mycall]

IS this correct ? 27900 CE 85 and 27400 PE is 38 total debit 123

Debit spreads at 27900CE/28000CE and 27400PE/27300PE

 

[Probability]

Debit spreads at 27900CE/28000CE and 27400PE/27300PE

Sorry, i am bit confused here, how many legs are there in this strategy, 4 or 6 ? is it same strategy like Monthly ATM pair short and near week strangle pair Long ?

 

[mycall]

Sorry, i am bit confused here, how many legs are there in this strategy, 4 or 6 ? is it same strategy like Monthly ATM pair short and near week strangle pair Long ?

Yes... same one... we are going with debit spread instead of naked buy... 4 legs...

 

[jetking]

hi my call..
no up dates ??
why ,stopped posting??
your trades are inspiration for other traders ..like me `
kindly keep posting ,for the benefit of others....

 

[mycall]

hi my call..
no up dates ??
why ,stopped posting??
your trades are inspiration for other traders ..like me `
kindly keep posting ,for the benefit of others....

Hi jetking...

Sorry for the delay in responding...

I got engaged in some long term jobs midway and could not follow market... even my last trade got disturbed due to this...

I had to exit the trade booking 63pts loss and to recover I was only able to short 2lots 28400CE at around 21... which gave me partial recovery...

I would have made full recovery that week if I could make me available on terminal... But maintaining two time sensitive engagements is extremely difficult...

I am still engaged in jobs... but criticality is not much at this point of time...

 

[jetking]

Hi jetking...

Sorry for the delay in responding...

I got engaged in some long term jobs midway and could not follow market... even my last trade got disturbed due to this...

I had to exit the trade booking 63pts loss and to recover I was only able to short 2lots 28400CE at around 21... which gave me partial recovery...

I would have made full recovery that week if I could make me available on terminal... But maintaining two time sensitive engagements is extremely difficult...

I am still engaged in jobs... but criticality is not much at this point of time...

sorry dear ,
had no idea about this.
life is like that
priorities keep changing ...
take your time
posts can wait and so can we..

 

[Rajeevji]

Hi MyCall,

I also trade Nifty and BankNifty using Short Strangles and Credit Spreads.

My short strangles strategy is similar to yours - have used both adjustments - shifting the winning side and the losing side. In credit spreads, the difference is that you trade strikes which are very close, say 27500/27400. But I go for bigger difference, for example 27500/27100 and rather far from current spot price.

You have noted that you got "busted" two or three times. Can you please share those experiences in detail - the numbers, types f move, and the loss it gave? Traders can get busted but don't know how much is the loss, how it could have been avoided looking back.

No hurry. Hope to see you back and to learn your experience.

Regards

Rajeev

 

[mycall]

Good question... I will reply soon... thank you...

I am not able to trade actively now... but enjoy discussing my experiences and theories...

While I am not trading... my research is still ongoing in finding different ways of 'being safe' and adjustments for the stressed positions...

I will respond soon...

 

[mycall]

Hi MyCall,

I also trade Nifty and BankNifty using Short Strangles and Credit Spreads.

My short strangles strategy is similar to yours - have used both adjustments - shifting the winning side and the losing side. In credit spreads, the difference is that you trade strikes which are very close, say 27500/27400. But I go for bigger difference, for example 27500/27100 and rather far from current spot price.

You have noted that you got "busted" two or three times. Can you please share those experiences in detail - the numbers, types f move, and the loss it gave? Traders can get busted but don't know how much is the loss, how it could have been avoided looking back.

No hurry. Hope to see you back and to learn your experience.

Regards

Rajeev

I don't recollect the date and time... but I remember the level... it was 25000 and I was holding position targeting that level... next level was 24800... when price was hitting 25000 I adjusted my position to get even at 24800... but that got broken... my associate wanted to keep it holding... he held his when I exited with 150pts loss on 2 naked lots... BNF kept following the trend and reached near 24600... where my associate exited... surprisingly price bounced back and closed above 25000 that same day...

there were other a couple of occasions where we got greedy and hung on... and got our butt kicked...

for me an option trader has many 'options' at hand at any point of time in the market... what matters are trader's mindset, risk appetite, money strength... whether to play it big or small... what I learned is it always wise to play it small... safe... it is always best to go for realistic ROI targets and plan a strategy according to that to participate in the game...

regarding close or wide spreads (strike based)... it is your risk appetite... Credit spread has very bad risk reward ratio... 100strike credit spread with a 10 pts credit can give you max loss of 40pts if S/L or adjustment set at buy strike hit... which is common practice... with 400strike wide credit spread with 50pts credit can give you considerable loss and I believe much difficult to manage when under stress...

If you are taking entry based on chart then the that is another issue... the S/L is set to the chart...

This is my thought and experience... I don't know if I could explain my views properly or answer your queries correctly... please let me know if you need any further information.

Thank you.