3 Option Strategies Tested Here

sumeetsj · #81 25th July 2008, 02:23 PM

Thats a strangle only. Straddle position we will create at 3.29 exact for monday.

Total cost of strangle was - 112.5

At 14.18 IST -

NIFTY JULY 4400 CE - 63.55
NIFTY JULY 4300 PE - 47.90

Total - 111.45 (+ brokerage)

Conclusion - We might have to carry this position for Monday.

sumeetsj · #82 25th July 2008, 04:04 PM

At Closing

Nifty 4400 CE and NIFTY 4300 PE of July series Strangle

Total cost - LTP - 60 + 40.20 = 100 Rs.

We chose to create a Straddle.

Straddle 1. Nifty 4400 July CE and PE both - 40.20 + 112.15 = 152.35

Straddle 2. Nifty 4300 July CE and PE both - 81.90 + 60 = 141.90

All the prices i have taken as last traded prices excluding brokerages. I think we should assume 2 points on buying and 2 points on selling as brokerage. So first 4 points will go for brokerage only. Lets see on Monday Market open which of them is profitable.

praveen taneja · #83 25th July 2008, 05:56 PM

Quote:

Originally Posted by sumeetsj

at closing

nifty 4400 ce and nifty 4300 pe of july series strangle

total cost - ltp - 60 + 40.20 = 100 rs.

We chose to create a straddle.

Straddle 1. Nifty 4400 july ce and pe both - 40.20 + 112.15 = 152.35

straddle 2. Nifty 4300 july ce and pe both - 81.90 + 60 = 141.90

all the prices i have taken as last traded prices excluding brokerages. I think we should assume 2 points on buying and 2 points on selling as brokerage. So first 4 points will go for brokerage only. Lets see on monday market open which of them is profitable.

sir can u tell me wat is the best way to get out of strangle options i always enter in that but cant exit with good profit thnx

nareshch · #84 25th July 2008, 06:39 PM

Quote:

Originally Posted by sumeetsj

Regarding my last post... What i colcluded was this -

Options straddles and srtangles will work good in btst and not intraday basis. And as already quoted by a senior member... strangle premium erodes fast is correct. So one can blindly create a straddle at 3.25 and then look for the trend next day and square before 10. This has to work i feel. Will do a paper / demo trade today.

Views welcome

Blind trades may work some times but not all the time .Check out 4400 August Straddle . It lost 30+ points from yesterday .

Naresh

nareshch · #85 25th July 2008, 08:41 PM

Cleared 4500 Straddle ( 190+26 ) . Profit 30+ points .

Added 4300 August straddle ( buy cost 380) .

Naresh

pasha · #86 25th July 2008, 09:44 PM

Anyone know what % change on Nifty required for breakeven and for the position to become profitable?
Seems a big Nifty move is needed to be in profit, else double time decay from both sides is eating away the premium.

nareshch · #87 25th July 2008, 11:10 PM

Quote:

Originally Posted by pasha

Anyone know what % change on Nifty required for breakeven and for the position to become profitable?
Seems a big Nifty move is needed to be in profit, else double time decay from both sides is eating away the premium.

Absolutely correct Pasha . If you read earlier messages in this thread thats the question and a compartive statement sent by me .

BUT ,

We are not carryig the positions till expiry here. We are getting out of the positions once they are in profit . You may refer to some of the trades I did in this thread .

One of my friend visited this thread and called up . He scolded me for doing some silly trades ( He didnt like the way I squared off 3800 and 3900 calls ) .
But i am trying to play with maket as safe as possible .( I am not saying NO loss at all ) . I work in nights and impossible for me to be online by 10AM daily . These strategies give me good profit ( I am not syaing no loss at all

) . I dont have to worry all the night seeing DOW, crude , RBI announcments ,sebi ,Pnotes , etc etc.

Naresh

pasha · #88 26th July 2008, 01:21 PM

Hi Naresh,
Had a look at the file you uploaded, all values are calculated on Nifty value at expiry. Since positions must be exited in 2-5 days to avoid large time decay, have you calculated what %move is needed for the strategy to profit in this timeframe?
Not trying to poke holes in anything at all, just checking to see if the strategy risk/reward ratio is worthwhile.

>>But i am trying to play with maket as safe as possible <<
Absolutely, trading safe is the number 1 priority always.

nareshch · #89 27th July 2008, 12:27 PM

Quote:

Originally Posted by pasha

Hi Naresh,
Had a look at the file you uploaded, all values are calculated on Nifty value at expiry. Since positions must be exited in 2-5 days to avoid large time decay, have you calculated what %move is needed for the strategy to profit in this timeframe?
Not trying to poke holes in anything at all, just checking to see if the strategy risk/reward ratio is worthwhile.

>>But i am trying to play with maket as safe as possible <<
Absolutely, trading safe is the number 1 priority always.

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. I am trying to prepare a document with what i learned in these days and with some more data like Time decay , Beta value . as soon as i finish i will post it here .

Naresh

lalitbhai · #90 27th July 2008, 12:30 PM

hello to everybody