15% Guaranteed Returns - Buy both Call & Put options Strategy

[neo1599]

Hey,

Great Thread. Reading through it.

New-ish to Options in Indian market.

This strategy sounds decent

This seems like an active discussion on the subject so here goes:

I have gone through the small live trade, a few books route.

Just my take away from them:

Credit Spreads:

Better have a strong view with extensive knowledge of possible events/scenarios along with a technical and fundamental analysis background.

Going into this without a strategy with regard to management of position in all imaginable scenarios is too big a risk.

Debit Spreads:

The risk here is limited(in my view), however chances of making money become low/er. Position management is a nightmare.

Final View:

Options are like a friend who can hustle, you never think it will hustle you but a hustler hustles.

If you have a strong case for the underlying movement and know the markets(this is key for all trading) i.e. international news events and local then getting into a position makes sense.

If you don't have an understanding of options:

1- Just play it safe

2- Pay the premium and relax

3- Use them to hedge your portfolio.

4- DON'T EVER SELL A CALL OR PUT OPTION. Leave this for the Pro's.

Advice I give my Dad(market understanding moderate):

If someone makes money from you buying and selling something, DON'T EVER WORK ON THEIR ADVICE.


Cheers

Hope to learn more from the thread.

 

[dddppp]

Good going.....

 

[ethicaldeal]

Cubt


There is one catch in this. if market swings between 5600 and 5800 both CE and PE prices will come down.

if market closes between 5600 and 5800 on expiry, you will loose the entire premium aqmount in this strategy.

Isn't that a point or do you have any solutions ?

Thanks

 

[yankeetrader]

Don't you think 200 points is too wide to take a position. The decays will eat a lot of option pricing negating any significant moves

 

[whisky]

Option selling is just like sitting on volcano for heating back once volcano came out Bhadaaammmmmmmmmmmmmmmmmmmm:lol::lol:

Know many traders who used to sell options but now long term investors

one opposite event and all gone with the wind

Khatron ke Khiladi......:lol::rofl: Where are those long term investors now at GOA beach:rofl:

 

[Arun56]

I want to share one statistics.
Around the globe if 100 traders making profit ..options profit makers are just 1 or 2.
This is a rough figure.
Still it shows options is a game which cant be shared with anyone.
i read a Q & A from a famous options trader.
he clearly ignored the method at which he makes money.
It seems options need something else ..
most of us focus in options after making some losses in futures or take risk after getting some profit.
Still cant find anyone who makes a regular profit.
Another parameter is.. options is not a daily business.
u will be getting a big opportunity when there is a big news.
(either good or bad)
we all know these kind of news comes 1 or 2 times in a year.
This is the reason options give less chance .

 

[hauler]

Hey,

Great Thread. Reading through it.

New-ish to Options in Indian market.

This strategy sounds decent

This seems like an active discussion on the subject so here goes:

I have gone through the small live trade, a few books route.

Just my take away from them:

Credit Spreads:

Better have a strong view with extensive knowledge of possible events/scenarios along with a technical and fundamental analysis background.

Going into this without a strategy with regard to management of position in all imaginable scenarios is too big a risk.

Debit Spreads:

The risk here is limited(in my view), however chances of making money become low/er. Position management is a nightmare.

Final View:

Options are like a friend who can hustle, you never think it will hustle you but a hustler hustles.

If you have a strong case for the underlying movement and know the markets(this is key for all trading) i.e. international news events and local then getting into a position makes sense.

If you don't have an understanding of options:

1- Just play it safe

2- Pay the premium and relax

3- Use them to hedge your portfolio.

4- DON'T EVER SELL A CALL OR PUT OPTION. Leave this for the Pro's.

Advice I give my Dad(market understanding moderate):

If someone makes money from you buying and selling something, DON'T EVER WORK ON THEIR ADVICE.


Cheers

Hope to learn more from the thread.

Yes i have heard about Taleb and all, but is there any proven data ? Even after so many years why many institutions only get involved in selling options. if all of them have the probability of going bust sooner or later why would they take route at all.
And if you say only a pro can make money there in selling options, Do you think an amateur can make money in trading in cash and futures ?
My guess is statistically all would have same returns more or less.

 

[SuperSaiyan]

They do coz they are crocodile of the lake in which we humans try to catch fish .. They rule the market

i will give my words....

Let the stop loss decide your loss and your profits :xD thats best tool to get max return and as per fixed loss say
5 to 25 % i.e usual that i keep

Never ever carry forward position in option --:-- Only way i can sleep in peace in nights

 

[sachink70]

What are the brokerage you are giving and who is the broker
I am with sharekhan and they are charging tremendous now I negotiated with them at flat rate of 60 rs per lot

Hi,

I have back tested this strategy & it worked perfectly. I have been trying out this strategy for couple of weeks. It�s been giving consistent returns of around 15 to 20%, but am curious to know if any of the members have already tried this.


Strategy:

Investment needed: Rs.10,000
Suitable Trading days: 1st to 20th of every month (Better to avoid last week of expiry)

This strategy will give best returns when you expect Nifty or any stock to move either ways with big move.

Example: Nifty Spot (5700)
Trade: Buy Nifty Call 5800 & Nifty Put 5600.

Say Nifty CE 5800 is 50Rs. & Nifty PE 5600 50Rs. (Just a rough figure)

Buy 2 lots of Put & Call options, so total investment = 50*100+50*100=10,000Rs.

If Nifty breaks resistance and keeps moving higher, Nifty CE 5800 value (Rs.50) will increase.
If Nifty breaks support and keeps moving lower Nifty PE 5600 value (Rs.50) will decrease.

Say if Nifty SPOT is 5500 now, then your investment value will be Nifty CE 5800==Rs.9 & Nifty PE 5600 ==Rs.120

Total value = 9*100+120*100=Rs.12900

Total Profit=Rs.10,000-12,900= Rs.2,900.

Your Returns is 29%.

I tried this with high volatile stocks like DLF & Nifty, it worked fine.

Please do let me know if anyone already tried this strategy?

 

[Cubt]

What are the brokerage you are giving and who is the broker
I am with sharekhan and they are charging tremendous now I negotiated with them at flat rate of 60 rs per lot

Every Trader's 1st broker is Sharekhan, only later after losing substantial money in markets we realize, 80% of the money is gone for brokerage. I opened my account with Sharekhan when i started trading, now i have been using Zerodha since 2010.