Another Options Trading Diary with the lowest capital of 4500/- only.

NiftyFantasy

Well-Known Member
#1
Hi Friends!
Here is another options trading diary for you but interestingly it is lowest capital diary i/you have ever seen on the traderji.com.

History: I am in stock market since 2007last and witnessed all ups & downs 6300-2250-6300 on nifty and lost almost 1.25 lakh :D till Aug'10 in all segments available in the market. In Aug'10 i have finally said good bye to the markets!

Capital: Now i have changed my mind and decided to recover my lost money with only 4500/- in my ledger with rmoney wich is balanced since aug'10. I will add not a single paisa in this account as I am already exited from the market.

Trading Picks: I will trade only in nifty OTM options. I will prefer to do intraday or maximum BTST. In case if I forced to carry my positions for more than 2 days I will buy a opposit call/put to cover it.

Call/Put Picking Criteria: I do not have good knowlede of TA, in fact i do not believe in TA (except support & resistances), but ofcourse I can fundamentally analyse any stock accurately.
A) Intraday: I will try to find out the buying interest (call/put). If you carefully watch the top 5 bid/ask constantly for 30-40 minutes in a sideways session, you can find out the interest of smart players. I have noticed many times that suddenly bid-ask difference increased very much. I will try to find out whether bid rate dropped very much or the ask rate increased. It can be used to make your position for the intraday.

B) Positional: I will take positional trade only on the base of oversold/overbougt or you can say it a contra position (1-2 times in a week).

Trade Timing: in most of the cases start timing would be 12noon as this time is very less risky.

Brokerage: Options 35/- per lot (second leg nil if sq/off same day) i.e. 0.80 points per trade intraday and 1.60 per trade for positional in nifty.

Target Capital: 10K upto 31/12/2010

So thats all friends!

1st trade: bought 6100 ce @28.30 at the end of the day. (on the base of oversold) wanted to buy 5300 pe to cover it but it was looking so expensive. Will buy that on monday if market goes sideways on monday.
Terget: 40-50 for monday.
 
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DanPickUp

Well-Known Member
#3
Hi Friends!
Here is another options trading diary for you but interestingly it is lowest capital diary i/you have ever seen on the traderji.com.

History: I am in stock market since 2007last and witnessed all ups & downs 6300-2250-6300 on nifty and lost almost 1.25 lakh :D till Aug'10 in all segments available in the market. In Aug'10 i have finally said good bye to the markets!

Capital: Now i have changed my mind and decided to recover my lost money with only 4500/- in my ledger with rmoney wich is balanced since aug'10. I will add not a single paisa in this account as I am already exited from the market.

Trading Picks: I will trade only in nifty OTM options. I will prefer to do intraday or maximum BTST. In case if I forced to carry my positions for more than 2 days I will buy a opposit call/put to cover it.

Call/Put Picking Criteria: I do not have good knowlede of TA, in fact i do not believe in TA (except support & resistances), but ofcourse I can fundamentally analyse any stock accurately.
A) Intraday: I will try to find out the buying interest (call/put). If you carefully watch the top 5 bid/ask constantly for 30-40 minutes in a sideways session, you can find out the interest of smart players. I have noticed many times that suddenly bid-ask difference increased very much. I will try to find out whether bid rate dropped very much or the ask rate increased. It can be used to make your position for the intraday.

B) Positional: I will take positional trade only on the base of oversold/overbougt or you can say it a contra position (1-2 times in a week).

Trade Timing: in most of the cases start timing would be 12noon as this time is very less risky.

Trading Platform: Rmoney Instatrade+

Brokerage: Options 35/- per lot (second leg nil if sq/off same day) i.e. 0.80 points per trade intraday and 1.60 per trade for positional in nifty.

Target Capital: 10K upto 31/12/2010

So thats all friends!

1st trade: bought 6100 ce @28.30 at the end of the day. (on the base of oversold) wanted to buy 5300 pe to cover it but it was looking so expensive. Will buy that on monday if market goes sideways on monday.
Terget: 40-50 for monday.
Hi Nifty Fantasy

Sorry to say : It is fantasy.

So, never mind. I do not know, from where you have this trading plan. On the other hand I am happy to see some one posting some ideas to discuss.

You talk about a two day time frame for option trading. If you trade options on such a short time frame, I highly recommend you to learn TA. Fundamentals have more influence for long time trades and not for short time trades. Or what is in your opinion a two day time frame ?:)

As options do not move as fast as futures, your plan is nonsense and to complicate.

Make it more simple. As you any way go for otm options, look how much the underlying moves in a certain time frame. Then choose there otm strike prices and sell them.

You then have a short strangle and you place your SL some where or watch the move of the markets. Clear ?

DanPickUp
 

NiftyFantasy

Well-Known Member
#4
Hi Nifty Fantasy

Sorry to say : It is fantasy.

So, never mind. I do not know, from where you have this trading plan. On the other hand I am happy to see some one posting some ideas to discuss.

You talk about a two day time frame for option trading. If you trade options on such a short time frame, I highly recommend you to learn TA. Fundamentals have more influence for long time trades and not for short time trades. Or what is in your opinion a two day time frame ?:)

As options do not move as fast as futures, your plan is nonsense and to complicate.

Make it more simple. As you any way go for otm options, look how much the underlying moves in a certain time frame. Then choose there otm strike prices and sell them.

You then have a short strangle and you place your SL some where or watch the move of the markets. Clear ?

DanPickUp
I have said 2 days maximum for a naked position...
I know what to apply and when to apply, but my capital is toooooooo short and first of all I have to increase my capital upto 10K then I will try anything else....BUT IT IS VERY CLEAR THAT I WILL NOT ADD ANY AMOUNT IN MY CAPITAL... :)

and above all I know this is very-very difficult...
 

DanPickUp

Well-Known Member
#5
I have said 2 days maximum for a naked position...
I know what to apply and when to apply, but my capital is toooooooo short and first of all I have to increase my capital upto 10K then I will try anything else....BUT IT IS VERY CLEAR THAT I WILL NOT ADD ANY AMOUNT IN MY CAPITAL... :)

and above all I know this is very-very difficult...
Hi NiftyFantasy

If you would have sold a strangle on Thursday, you would get the time decay until Monday and that would already increase your capital.

Only concern from my side : Margin.

DanPickUp
 

NiftyFantasy

Well-Known Member
#6
Hi NiftyFantasy

If you would have sold a strangle on Thursday, you would get the time decay until Monday and that would already increase your capital.

Only concern from my side : Margin.

DanPickUp
Thank you very much for your concern over me!!!
In fact you can take advantage of selling next month stangle on any expiry day bcz all the premiums get reduced immediately when 2 month options converted in 1 month on very next day or day after tommorow. Every one who is trading in 2nd month options should close their positions 1-2 days before current month expiry.
I am also interested in selling options but first of all I have to increase my capital.... :)
Reliance money has a good option of share pledging to sell the options they provide upto 80% exposure on the shares in your portfolio to sell the options (not buy) & futures thats why I am stuck with Reliance Money. My future plan is to buy good share and hold it in porfolio and the same time sell the deep otm calls to grab the whole premium by pledging shares.
Anyways thanks a lot once again.

regards
Abhi
 

DanPickUp

Well-Known Member
#7
Thank you very much for your concern over me!!!
In fact you can take advantage of selling next month stangle on any expiry day bcz all the premiums get reduced immediately when 2 month options converted in 1 month on very next day or day after tommorow. Every one who is trading in 2nd month options should close their positions 1-2 days before current month expiry.
I am also interested in selling options but first of all I have to increase my capital.... :)
Reliance money has a good option of share pledging to sell the options they provide upto 80% exposure on the shares in your portfolio to sell the options (not buy) & futures thats why I am stuck with Reliance Money. My future plan is to buy good share and hold it in porfolio and the same time sell the deep otm calls to grab the whole premium.
Anyways thaks a lot one again.

regards
Abhi
Hi Abhi

Covered calls are a nice way to make some bucks in side way markets. Simple and very effective strategy. :) We also do that in our share funds.

Take care

DanPickUp
 

nac

Well-Known Member
#8
^

Dan...

Here in India, margin requirement for writing options is high. Since his capital is 4grand he can't write. With his account size, he can't even buy ITM options when expiry is far...

Since he is not in a position or no intend to add a penny more to his account, writing options is not possible until he quintuple his account size.
 

NiftyFantasy

Well-Known Member
#9
^

Dan...

Here in India, margin requirement for writing options is high. Since his capital is 4grand he can't write. With his account size, he can't even buy ITM options when expiry is far...

Since he is not in a position or no intend to add a penny more to his account, writing options is not possible until he quintuple his account size.
NAC,
You did not understand me, actually I can add 2-3 lakh in my capital easily but as I said I will not add, you can say it just like a paper trading but paper trading does not create such greed/fear thats why I am using my balance capital to trade in real.... :)
I just want to try that is it possible or not....
Posting my trade here will keep me in discipline...


regards
Abhi
 

DanPickUp

Well-Known Member
#10
^

Dan...

Here in India, margin requirement for writing options is high. Since his capital is 4grand he can't write. With his account size, he can't even buy ITM options when expiry is far...

Since he is not in a position or no intend to add a penny more to his account, writing options is not possible until he quintuple his account size.
Hi nac

Ok...See the problem and thought, that this could be the problem...So what to do to increase his account ? .....Buying options is not the solution, as we need some thing which brings money and not some strategy which may bring money. I am clear, that buying naked options can make huge money. As Abhi says, TA is not his friend, buying naked calls or put is not the way to trade for some body witch is not familiar with TA. I also guess, that the option greeks are also not his best friends. If so, he could go for diagonal spreads and greek depending strategies. Abhi, are you familiar with the options greek ?

How are spreads margin ed ?

DanPickUp
 
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