3 Option Strategies Tested Here

pasha · #91 27th July 2008, 01:36 PM

Quote:

Originally Posted by nareshch

As far as per my observations , a move of around 4-5% in nifty will start giving you good profits .
This is based on 10days observation only.
Naresh

Did a small check on past prices.
On 14/7 the nifty close was 4039.7
Total of 4000 call + put on 14/7 was, 156 + 132= 288
on 16/7 nifty close was 3816.7, total movement down of 223 points
Total on 16/7 of 4000 call and put, 258 + 57= 315
After that was the trust vote, we can't expect that everytime

Don't know if it could have been more profitable with other strike prices such as 4000 put and 3900 call, or if higher delta is better. Have you thought about using synthetic straddles?

sumeetsj · #92 28th July 2008, 10:22 AM

Nifty 4400 CE and NIFTY 4300 PE of July series Strangle

Total cost (at 10.15 AM) 36 + 50 = 86 Rs.

One has to decide what to do

We chose to create a Straddle.

Straddle 1. Nifty 4400 July CE and PE both - 40.20 + 112.15 = 152.35
Total cost (at 10.15 AM) 36 + 100 = 136

Straddle 2. Nifty 4300 July CE and PE both - 81.90 + 60 = 141.90
Total cost (at 10.15 AM) 80+50 = 130

nareshch · #93 28th July 2008, 11:50 AM

Quote:

Originally Posted by pasha

Did a small check on past prices.
On 14/7 the nifty close was 4039.7
Total of 4000 call + put on 14/7 was, 156 + 132= 288
on 16/7 nifty close was 3816.7, total movement down of 223 points
Total on 16/7 of 4000 call and put, 258 + 57= 315
After that was the trust vote, we can't expect that everytime

Don't know if it could have been more profitable with other strike prices such as 4000 put and 3900 call, or if higher delta is better. Have you thought about using synthetic straddles?

27 points on 288 points is some where around 9% profit on your capital . Thats cool .
We are not expecting major events all the time . and major events wont give too much benefits also

I took 4200C and P on trust vote day .next day market opened 200 points up , but my trade is still at breakeven and went in to loss for some time .

As per your calculations also , a move of 4-5% on either side will give returns . For geting more out of it , we have to use some techniques for entry . ( like supports , resistances ,Pivot high and pivot low etc)

Naresh

nareshch · #94 28th July 2008, 11:55 AM

Quote:

Originally Posted by sumeetsj

Nifty 4400 CE and NIFTY 4300 PE of July series Strangle

Total cost (at 10.15 AM) 36 + 50 = 86 Rs.

One has to decide what to do

We chose to create a Straddle.

Straddle 1. Nifty 4400 July CE and PE both - 40.20 + 112.15 = 152.35
Total cost (at 10.15 AM) 36 + 100 = 136

Straddle 2. Nifty 4300 July CE and PE both - 81.90 + 60 = 141.90
Total cost (at 10.15 AM) 80+50 = 130

As of now Nifty is going nowhere . Good movement will be seen only after nifty crossing 4350- 4390 or below 4300 .

Naresh

nagendra_gb · #95 28th July 2008, 02:25 PM

Wht is ur view on relind 2160 put and 2190 call now it costs us aroung 210 shall i buy

sumeetsj · #96 29th July 2008, 11:12 AM

Quote:

Originally Posted by sumeetsj

Nifty 4400 CE and NIFTY 4300 PE of July series Strangle

Total cost (at 10.15 AM) 36 + 50 = 86 Rs.

One has to decide what to do

We chose to create a Straddle.

Straddle 1. Nifty 4400 July CE and PE both - 40.20 + 112.15 = 152.35
Total cost (at 10.15 AM) 36 + 100 = 136

Straddle 2. Nifty 4300 July CE and PE both - 81.90 + 60 = 141.90
Total cost (at 10.15 AM) 80+50 = 130

Nifty 4400 CE and NIFTY 4300 PE of July series Strangle

Total cost (on 29th July at 11.08 AM) 17 + 66 = 83 Rs.

Straddle 1. Nifty 4400 July CE and PE both - 40.20 + 112.15 = 152.35
Total cost (on 29th July at 11.10 AM) 17 + 133 = 150

Straddle 2. Nifty 4300 July CE and PE both - 81.90 + 60 = 141.90
Total cost (on 29th July at 11.11 AM) 50 + 68 = 118

sumeetsj · #97 29th July 2008, 11:55 AM

Nifty 4400 CE and NIFTY 4300 PE of July series Strangle

Total cost (on 29th July at 11.53 AM) 9 + 101 = 110 Rs.

Straddle 1. Nifty 4400 July CE and PE both - 40.20 + 112.15 = 152.35
Total cost (on 29th July at 11.54 AM) 9 + 185 = 194

Straddle 2. Nifty 4300 July CE and PE both - 81.90 + 60 = 141.90
Total cost (on 29th July at 11.54 AM) 20 + 107 = 127

LITTLE WEIRD !!! Only 4400 Straddle gave good profits

RKKHATRI · #98 29th July 2008, 08:47 PM

BROKERAGE is included or not ?
Brokerage factor is too much in such options trading.
I dont think these options are useful when we include brokerage which is quite high.

nareshch · #99 29th July 2008, 10:42 PM

Quote:

Originally Posted by nagendra_gb

Wht is ur view on relind 2160 put and 2190 call now it costs us aroung 210 shall i buy

How was your experience with Reliance Today ? I assume it will be very boring

Naresh

nareshch · #**100** 29th July 2008, 10:53 PM

Guys ,

Long straddles should be used when volatility is low and we are expecting good movement on any direction of the market .

We are trying them in a highly volatile markets .Due to this , we will be getting profits only after 4-5% move on any 1 direction. If nifty stuck in a range , say 4100 - 4500 for this month, we may loose much of the premiums paid .

A bit of fine tuning is definately working to get handsome profits .

We hold the straddle , but once it breaks an imp support or resiatance we will sq.off that postion . Ex: if it breaks support , we will sq.off Calls and if it breaks resistance , sq.off Puts . get out with profits or If you really want to carry , then hedge positions again during EOD .

If some you have good risk management capabilities, and available to trade from 9:55 to 3:30 , i prefer naked calls and puts for them .

Read Option Buy Recomendations by Ghosh , if you want to start trading options straight away .
http://www . traderji .com/options/16794-option-buy-recomendations.html

and Going with 60 min Flow by Saint if you want to learn how to trade and earn in this markets .

http://www. traderji .com/equities/21903-going-60min-flow.html

You will get good understanding how to profit from this markets.
( I have very limited time for trading , i will still search for safe bets

)

Naresh