Best Option Strategy for multiple markets

As i said Holy grail is trader! his knowledge of product,usage of capital,usage of knowledge.

I tried playing with option way back...failed miserably....tried lot of stuff failed....even today there are many ways to place a trade n that can help u with that.....strategies work well with timely ,adjustments or profit booking.


for instance u r bullish n u place bull spread after 2 days market did not behave as expected n due to some indication u placed bear spread....say u used call n put for the said strategy...now the market again failed to behave as expected it gave in to 3rd posibility (range bound) AND U already have iron condor.....now market start to pick u some direction but u already earned enuf from ur spread so u decided to book profit and take a fresh position based on fresh view.


some people might go for all the legs of iron condor on one go and based on market conditions they might keep only winning side like bull spread or bear spread.


say u have 1,2 or 3 continues months of uptrend or downtrend......u might love u go for iron condor as premium received will be good coz of high implied volatility and if market stays ij range or consolidates for a month u would earn on it....


Volatility kills-virtually all the short selling strategies but if placed well help u wiN.....


historically.....highest % of winners can be achieved using sell of strangles(over 2sd otms)

Sell of straddle has highest % of ROI. work well when Sold on High IV.

Iron condors works well with management of it...yes success rate is good if managed properly ROI is low.



Hope this helps n Did not kill ur precious time

Blackhole, Have you completely stopped playing option now or you still play.
You seems knowledgeable enough to be profitable using option strategies or you find something better than options

I want to know two things,

When I have bullish view which one is best strategy in option selling or buying.

Also when moderately bullish what should be our strategy.

When trend is up buy near resistance what should be our bullish option strategy keeping mind that if market come down we do not loose much but if goes up we gain.

Also what about same question in reverse view in bearish strategy.

Subhadip,

Not sure if this is what you are looking for :

http://www.optionsxpress.com/free_education/strategies/bullish.aspx

http://www.optionsxpress.com/free_education/strategies/bearish.aspx

http://www.optionsxpress.com/free_education/strategies/neutral.aspx

As i said Holy grail is trader! his knowledge of product,usage of capital,usage of knowledge.

I tried playing with option way back...failed miserably....tried lot of stuff failed....even today there are many ways to place a trade n that can help u with that.....strategies work well with timely ,adjustments or profit booking.

i did something very similar last month and made a small loss of 500 rs for a one lot bank nifty. i entered all the legs at the same go. the problem is when the price is very close you never know when one spread will be profitable and when it will go into loss. so unless and until you have expiration very close you can never take the risk. also the last days of expiration are historically volatile making even this complicated. do not know if the result would have been different if i legged in.

when you leg in one spread if its profitable you close. so you leg in the other spread when you want to optimise the cost. this means you could enter a naked short. then if the price goes near the short strike of the spread thats when we leg in the last one pending buy of the iron condor. this seems to be lot doable. but if you factor in the adjustments and brokerage, finally its questionable whether all the pain is worth it. because there could be other better strategies.

Many seems not to know what is the present trend. or when they know the present trend and if they make the entry they get shaked off by the retrace.
How to know if volatility is high or low now and how do we predict whether its going to raise to drop.
Alas. I am going in the right path then. the key lies in your reply. a strangle of 1sd, 2sd, 2.5sd and 3sd could have different success rate in different months. i am looking at more success rate so this is the one i want and i guess i got the reply i want.
As said earlier rookies like me do not realize that a wide range of strikes could be chosen for a strangle but one is limited when it comes to straddle. still can you explain how to know when the IV is High.
:thumb: Man i have to thank you for your valuable time.

Blackhole,pannet,

could you guys please let me know, how to calculate 1sd,2sd,3sd range lets say for nifty. or could we say broadly if delta for an strike is around .15 then it will be in 2sd range.

hi subhadip,

i am not an expert. i was searching for a similar thing and got my answer in ratio backspread. when you are bullish you enter a bull put spread when the price is between both your strikes. when the spread is going to go into a loss you could leg in another PUT assuming your view changed to bearish now.

i tried it last month and was not successful because i legged in all at the same time and i was concentrating on getting a small net credit thereby my strikes were wide. the strategy would have become profitable if i held on till the end of the month. but unfortunately i got shaked off when it was ranging most of the middle month.

just my 2 cents.

Note: you can find the entries in my trading diary below.

without much maths many use Bollinger Bands for that. so when you enter 2 in the deviation its 2d and so on and so forth. for bank nifty i choose 2000 points wide strangle this month. i am already 1.5% plus within a week.

pannet, just to understand your point, i selected 2 as SD in BB settings and period is 20 on nifty daily chart. It is giving upper BB range as 8381 and lower BB range as 8040. So one can sell the strangle around these strike price. But i find these range too close to comfort by looking current nifty level. or i am missing something about choosing 2SD.

i am not sure either but when we choose 2 i think the upper band is 1sd away and lower band is 1sd away. so i guess one needs to double up and double down.