Advice on my Strangle

prasham

Active Member
#1
In current range bound market IMT (well that's modified version of IMO... IMT - In My Thinking :D ) where support lies at 5100 and Resistance is at 5400-5450 levels, Short Strangle could be highly profitable.

Sell 5200 PE Apr - 32
Sell 5400 CE Apr - 58

Total Credit collected is 90. This shall be max profit (excluding commissions). Max profit when Nifty expires between 5200 and 5400.

Max Loss is unlimited (atleast as per theory). Max Loss occurs when Nifty expires below 5200 or above 5400.

SL should be Nifty closing below 5200 for 2 days or closing above 5450 for 2 days. Change SL to suit your trading style.

:clap: Awaiting your expert comments :clap:
 
#2
In current range bound market IMT (well that's modified version of IMO... IMT - In My Thinking :D ) where support lies at 5100 and Resistance is at 5400-5450 levels, Short Strangle could be highly profitable.

Sell 5200 PE Apr - 32
Sell 5400 CE Apr - 58

Total Credit collected is 90. This shall be max profit (excluding commissions). Max profit when Nifty expires between 5200 and 5400.

Max Loss is unlimited (atleast as per theory). Max Loss occurs when Nifty expires below 5200 or above 5400.

SL should be Nifty closing below 5200 for 2 days or closing above 5450 for 2 days. Change SL to suit your trading style.

:clap: Awaiting your expert comments :clap:

DEAR PRASHAM JI,

Ur HBP (higher break even point)=5490

LBP=(lower break even point)=5110.


U can get profit if nifty expire btw 5110-5490.

Ur max. profit zone=5200-5400


use hbp & lbp as sl
.
 

AW10

Well-Known Member
#3
SL should be Nifty closing below 5200 for 2 days or closing above 5450 for 2 days. Change SL to suit your trading style.
Prasham, In my view, u shd look at your stoploss strategy.. 2 days of closing below the LBP could be a killer. You may not see unlimited loss.. but u can certainly see BIG loss.
Look at history and see, what happens when mkt falls. Look at last few steep falls, and see how much mkt fell in 2 days. This shd give u fair idea of what worst can be..

We see more and more steep falls.. and in that waiting for 2 days ? ..atleast I can't digest..

Happy Trading
 

prasham

Active Member
#4
I certainly understand your concern. What should be the SL in ideal condition?
 

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