Very Simple Method to Earn Money from Options without knowning anything about options

[Trademan783]

Re: Very Simple Method to Earn Money from Options without knowning anything about opt

it was a good piece of info., But even the observed trend may also be helpful.

 

[DanPickUp]

Re: Very Simple Method to Earn Money from Options without knowning anything about opt

I have given all details in the post. Please read it carefully. The thumb rules are:

(1) Take Nifty Spot, round it to nearest 50.
(2) Subtract 200 from it, this is the strike rate for first buy
(3) Subtract 100 from it, this is the strike rate for first sell
(4) Add 100 to it, this is the strike rate for second sell
(5) Add 200 to it, this the strike rate for second buy

All the strike rate are for next month expiry. The trading should be at the end of the month. For example, for options expiring on 28th Nov 2013, the trading should be done either in the last week of October, but preferable in the first week of November 2013 (say on first or second November 2013). But, everything depends on premium. So, without checking premium, you should not take the position.

In the above post, instead of subtracting 200 and adding 200, I have subtracted 150 and added 150.

I explain the rules in detail at later stage. For the time being, people who are not well versed can take position for the strike price and date given (provided the premium paid for options are within the range given by me).

@Pannalal

With all my respect to your work, here some critiques to what I have seen until now. It is meant in a positive way:

First: You forgot your disclaimer to that above post and comment: Disclaimer: I shall not be responsible in case of any loss. Neither I share profit nor loss.

Second: Coming up with a comment: Without knowing anything about options is not a very super comment. I would call it: Leading the people in the wrong direction for what ever reasons you have or had. Non should trade options with out having knowledge about them.

Your strategy has its advantage and disadvantage and needs to be watched like any other strategy. Even the adjustment rules must be understood very clearly.

This just to clear a few things I couldn't go with in your posts. Now please move on with this income strategy, as the thread so far was informative and surely worth to follow at any time :clapping:

Take care and all the best / DanPickUp

 

[pannalal]

Re: Very Simple Method to Earn Money from Options without knowning anything about opt

@Pannalal

With all my respect to your work, here some critiques to what I have seen until now. It is meant in a positive way:

First: You forgot your disclaimer to that above post and comment: Disclaimer: I shall not be responsible in case of any loss. Neither I share profit nor loss.

Second: Coming up with a comment: Without knowing anything about options is not a very super comment. I would call it: Leading the people in the wrong direction for what ever reasons you have or had. Non should trade options with out having knowledge about them.

Your strategy has its advantage and disadvantage and needs to be watched like any other strategy. Even the adjustment rules must be understood very clearly.

This just to clear a few things I couldn't go with in your posts. Now please move on with this income strategy, as the thread so far was informative and surely worth to follow at any time :clapping:

Take care and all the best / DanPickUp

DanPickUpji,

My idea was never to misguide people. As far as this strategy is concerned, I thought that it is so simple that people without knowing anything about options should be able to execute it. I think I need to write a book where I can explain in simple language:

What are options?
What are the advantages and disadvantages of it?
What is implied volatility?
How to compute price of options for put/call, different expiry date based on the base asset value, and volatility?
What is delta, gamma, theta, vega and rho?
How to use these?
What are the various strategies for trading options?
How options can be used for reducing risk of stocks and futures? .....

 

[DanPickUp]

Re: Very Simple Method to Earn Money from Options without knowning anything about opt

DanPickUpji,

My idea was never to misguide people. As far as this strategy is concerned, I thought that it is so simple that people without knowing anything about options should be able to execute it. I think I need to write a book where I can explain in simple language:

What are options?
What are the advantages and disadvantages of it?
What is implied volatility?
How to compute price of options for put/call, different expiry date based on the base asset value, and volatility?
What is delta, gamma, theta, vega and rho?
How to use these?
What are the various strategies for trading options?
How options can be used for reducing risk of stocks and futures? .....

@Pannalal

No need of writing a book, it is done already. Please move on with the income strategy as all the rest now is cleared. We as posters and presenters here from what ever have also some kind of response to what we post and the way we post it.

If it could be misleading in any way (Not even wanted from us) then we have to be careful, as there are may some followers which did not understood it the right way and start to risk there money on what is posted in the hope to make profit with out not even understanding in a deeper way what they do. If it works fine, well and if it not works fine, then the big questions are coming up and the anger about the poster from that strategy.

Any way: As told: Please move on by what you post and come up with further live examples and specially with the adjustment rules. :clapping:

Take care / DanPickUp

 

[mastermind007]

Re: Very Simple Method to Earn Money from Options without knowning anything about opt

Pannalal

Are you able to compute Black Scholes in real time? I was able to create the spreadsheet but getting it to work in real time is difficult.

Also, I am forever guessing values if I.V. which makes me bit nervous about the whole thing.

 

[pannalal]

Re: Very Simple Method to Earn Money from Options without knowning anything about opt

Pannalal

Are you able to compute Black Scholes in real time? I was able to create the spreadsheet but getting it to work in real time is difficult.

Also, I am forever guessing values if I.V. which makes me bit nervous about the whole thing.

I have created a software that can instantly calculate the Black Scholes price. For example, if you connect to yahoo finance, it will keep computing price for various pe/ce. However, you are not permitted to constantly ping yahoo. After some time, they will throw you out. It also has facility to compute average I.V. based on the average of various options values provided by you. You can also test various strategies like if you buy 2 lots for strike rate 6100 CE and sell 1 lot for strike rate 6300 CE and sell another lot at strike rate of 6500 CE, what will be the result at expiry date at various values.

Below, I give result:

Contracts	    2	      1	       1
Buy/Sell         Buy     Sell     Sell
Type	            Call     Call     Call
Strike	          6100    6300    6500
Premium	287.00  157.07   72.54
Delta	       1.5521  -0.5622  -0.3347
Gamma	0.0018 -0.0012   -0.0011
Theta	-5.6865	3.1039	2.6067
Vega	10.6231	-6.9981	-6.4672
Rho	7.3131	-2.6894	-1.6177

Price	Strategy1	Strategy2	Strategy3	P&L
6,050	-574.00	157.07	72.54	   -344.38
6,100	-574.00	157.07	72.54	   -344.38
6,150	-474.00	157.07	72.54	   -244.38
6,200	-374.00	157.07	72.54	   -144.38
6,250	-274.00	157.07	72.54     -44.38
6,300	-174.00	157.07	72.54	      55.62
6,350	-74.00	107.07	72.54	    105.62
6,400	 26.00	 57.07	72.54	    155.62
6,450	126.00	   7.07	72.54	    205.62
6,500	226.00	-42.93	72.54	    255.62
6,550	326.00	-92.93	22.54	    255.62

The software is still under development. I shall provide lot more facilities.

The only question is how do you provide live data feed to the software. This is big question. If you can provide live data feed, it will keep computing price etc. at lighting speed. I contacted NSE. They charge annually Rs. 15 lakh for live data feed to the software.

 

[mastermind007]

Re: Very Simple Method to Earn Money from Options without knowning anything about opt

The software is still under development. I shall provide lot more facilities.

The only question is how do you provide live data feed to the software. This is big question. If you can provide live data feed, it will keep computing price etc. at lighting speed. I contacted NSE. They charge annually Rs. 15 lakh for live data feed to the software.

I;ve tried Yahoo. Did even attempt to use Google's spot data to do the calculations but was not willing to rely on inaccurate data. That is what led me to developing the ATS.
I do get live feed within my ATS that I use to fire trades in real time. Kindly PM me

 

[Enrich Options]

Re: Very Simple Method to Earn Money from Options without knowning anything about opt

Hi,

from where are you getting these Option Greeks values from?
(the delta, theta and gamma)

are there any software / sites that provide these for Nifty / Bank nifty?

 

[pannalal]

Re: Very Simple Method to Earn Money from Options without knowning anything about opt

Hi,

from where are you getting these Option Greeks values from?
(the delta, theta and gamma)

are there any software / sites that provide these for Nifty / Bank nifty?

There are software available that you can buy. However, I am a software Engineer (MS from BITS, Pilani), so I have developed my own software. The software has lot of facilities but it is still in development.

If you want to develop your own software, please see the following link for formulas:

http://en.wikipedia.org/wiki/Greeks_(finance)

 

[vssoma]

Re: Very Simple Method to Earn Money from Options without knowning anything about opt

So this strategy is not for Below Poverty Line people. We still will have to rely on free sugar in form of naked options..:annoyed:

there is no free lunch in this world...in any form...for any one.