BankNifty No Loss Hedging
- Thread starter suryameet25
- Start date
- Tags banknifty strategy
Can you point me to one.
I need to understand a lot of things. I am surviving now only because in a month at least one directional bet gains for me.
As per yesterday, if strategy were to be executed,
As far as direction is concerned,
sell near, buy far: One has 30pt upside window to make money (around Inr. 30) after which loss kicks in. (For BN, isn't this dumb, I might as well scalp)
Buy near, sell far: Anything more than 30pt move in any direction and you make money.
Any delta neutral, direction neutral strategy works in funny way.
Eg: long straddle requires large move in either side to make money else loss
and short straddle prefers to stay in the middle for max profit and large moves have unlimited loss.
Yesterday, IV was around 36-38% for BN, today its 56-58%, is this impact understood ?
Again, when it is 1:1 lot, there are differences in movement of price as per MTM.
So if sell earns 10 points from theta, the buy would have lost 30 points in theta. How do you balance that?
As far as direction is concerned,
sell near, buy far: One has 30pt upside window to make money (around Inr. 30) after which loss kicks in. (For BN, isn't this dumb, I might as well scalp)
Buy near, sell far: Anything more than 30pt move in any direction and you make money.
Any delta neutral, direction neutral strategy works in funny way.
Eg: long straddle requires large move in either side to make money else loss
and short straddle prefers to stay in the middle for max profit and large moves have unlimited loss.
Yesterday, IV was around 36-38% for BN, today its 56-58%, is this impact understood ?
Again, when it is 1:1 lot, there are differences in movement of price as per MTM.
So if sell earns 10 points from theta, the buy would have lost 30 points in theta. How do you balance that?
My first post in this thread was in reply to the question from the op, where I said that weekies move faster than monthlies and you replied
You are wrong. The weeklies move faster and I proved it here.
http://www.netpicks.com/monthly-or-weekly-options-trade/
The only person who won't know this is one who doesn't trade.
Why change the topic?
The weeklies move faster than monthlies. Yes or no?
Op.
Start your trading software and add ATM strike of next week and end of month. Watch how fast they move wrt each other.
There is no free lunch in the market. The high time decay of the weekly is compensated by high gamma.
Weeklies can be very difficult to manage in a diagonal. Better to trade monthlies instead.
You are wrong. The weeklies move faster and I proved it here.
http://www.netpicks.com/monthly-or-weekly-options-trade/
The only person who won't know this is one who doesn't trade.
Why change the topic?
The weeklies move faster than monthlies. Yes or no?
Op.
Start your trading software and add ATM strike of next week and end of month. Watch how fast they move wrt each other.
There is no free lunch in the market. The high time decay of the weekly is compensated by high gamma.
Weeklies can be very difficult to manage in a diagonal. Better to trade monthlies instead.
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