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| Discuss profits frm options writing.. at the Options within the Traderji.com - Discussion forum for Stocks Commodities & Forex; Hi.. im giving case study writing both CE and PE of same stike price.. aim ... |
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#1
6th March 2007, 05:11 PM
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profits frm options writing..
Hi..
im giving case study writing both CE and PE of same stike price.. aim is to get profit frm diminishing time value ( in form of premium recvd) attaching here excel sheet of Nifty 4100 stike price CE/PE of Feb series..whn mkt @4137 4100 CE write @108( upside 4208 ) 4100 PE write @71 ( downside 4029) if market expires in between ths range profit is very good... This can go terribly wrong if mkt corrects too much (like ths mnth)..or go up to 4300 ..so Stop loss placement is very imp... Logically to get 108 pts i can risk 30-40 pts so my upside SL would b 4250(4208+40) n downside SL would b 4010( 4029-20).. Kindly go throu Excel attached herewith.. Experts plz guide ..n comments are requested.. n betr ways to place SL.. Sharestrader 
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#2
6th March 2007, 06:29 PM
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Re: profits frm options writing..
Quote:
Since you are writing a straddle and the net premium recd would be 108+71=179, your upside risk would begin at 4100+ 179=4279 Your downside risk begins at 4100-179=3921 Take it from there. I hope that helps.
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#3
6th March 2007, 06:35 PM
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Re: profits frm options writing..
Dear Vince,
thanx..u r rt... im calculating risks on individual legs to cover loss making legs at earliest..i.e.to reduce big losses... can u correct.. sharestrader
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#4
6th March 2007, 06:40 PM
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Re: profits frm options writing..
I place my stops on the supports/ resistances on the underlying and not on a fixed percentage or rupee amount.
Another way would be to use a volatility based stop. Take your pick.
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#5
6th March 2007, 06:47 PM
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Re: profits frm options writing..
can u plz elaboarte on volatility based stop..
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#6
6th March 2007, 06:49 PM
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Re: profits frm options writing..
Check this link http://www.traderclub.com/discus/mes...ber319991048pm
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#7
7th March 2007, 03:25 PM
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Re: profits frm options writing..
Dear Vince , thnx for ur reply..its very difficult to understand though..
l request u to start posts on options wth examples for newcomers in options(not asking for tips)..it would b gr8 help...as per ur convenience.. can u? regards sharestrader
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#8
7th March 2007, 06:10 PM
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Re: profits frm options writing..
Quote:
As SharesTrader mentioned in the above mail, we get more insight of the Options by the real world examples. Examples are appreciated more! Regards! sreeny
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#9
7th March 2007, 06:24 PM
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Re: profits frm options writing..
What I would suggest is that you guys post a proposed trade along with the chart and strategy here.
I will most certainly post my views on it , and you would also get valuable feedback from other seniors here. It would also serve the purpose of honing your analytical and chart reading skills.
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#10
8th March 2007, 12:53 PM
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Re: profits frm options writing..
hi...i wil take example here..seniors plz guide..
as per my analysis Satyam support was near 410..trgt 430-440 n accordingly Staym touchd low of 405 (208/2/07)..at tht time i would like to take CA..wht stike price shd i go for? 410 or 420...n at the same time i would also like to take care of losses if satyam slides below 410....... can anyone suggest wht i shd hav done.... coz once i had bitter experience in trading RIL option..i had CA..according to my analysis it went up..bt unfortunately on the next day of expiry..so im cautious...abt time limit.. plz guide.. sharestrader
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