A Beginner's way to trade options.

[AW10]

While trading such a low premium option, don't forget to consider your brokerage and tax. Sometime it is better to let option exprire worthless, when brokerage is not as % of premium but based on minimum amount.

 

[TFL]

Dear ST,

You closed the 3700 put and call or framed another strategy?
I am looking to close the CALL @ EOD and keep the PUT since the put is of minimal value and let it go worthless or if there is value appreciation in it will be covering...any pitfalls in my view?

 

[Smart_trade]

Dear ST,

You closed the 3700 put and call or framed another strategy?
I am looking to close the CALL @ EOD and keep the PUT since the put is of minimal value and let it go worthless or if there is value appreciation in it will be covering...any pitfalls in my view?

Yes Hari....I closed the straddle as under :

1) Sold 3700 Calls at Rs 640

2) Sold 3700 Puts at Rs 16

Total received Rs 656 .....

I have sold 4000 puts at Rs 52 and 3900 puts at 36 today...as I dont expect these prices in May settlement now as the mkt fundamentals have changed for better....

ST

 

[AW10]

Hari, 3700 Put will most likely expiry worthless, but IMO, this is blocking the margin for next 10 days and giving the max return of 16 rs.

I like the way, ST has closed his 3700 short put and opened higher value Short PUT so that in the same time period, he can squeez more return.

Happy Trading.

 

[Smart_trade]

Dear ST,

You closed the 3700 put and call or framed another strategy?
I am looking to close the CALL @ EOD and keep the PUT since the put is of minimal value and let it go worthless or if there is value appreciation in it will be covering...any pitfalls in my view?

Yes Hari...as rightly pointed out by AW10 in his above post....the idea is to make some extra juice from the margin stuck up and I dont expect mkt to go below 4000 so best was to sell 4000 puts and make some extra money....

But be careful....these puts sold are naked and you should be fast to get out at loss in case mkt tanks....also if you are not confident that mkt will not go below 4000 then selling 4000 puts is not a correct strategy for you.

ST

 

[MurAtt]

Me too exited by Calls - 4000CE - both at average price of 375 almost EOD.
But before that bot 4300PEx2 nos@128. Sold 1 at 154. Holding the other one for tomorrow.

 

[TFL]

Thank you AW10 and ST,

Keep update your position, strategies, etc dear ST...I can at-least learn from them. I have not much experience in option strategies and is only learning now.

I sold that 3700 CALL EOD and holding the PUTs.

 

[TFL]

Hari, 3700 Put will most likely expiry worthless, but IMO, this is blocking the margin for next 10 days and giving the max return of 16 rs.

I like the way, ST has closed his 3700 short put and opened higher value Short PUT so that in the same time period, he can squeez more return.

Happy Trading.

AW10, how you calculated "max return of 16 rs."

 

[Smart_trade]

AW10, how you calculated "max return of 16 rs."

Hari,

AW10 probably thought that I was short 3700 put....not so...I was long 3700 put(one leg of the 3700 straddle I bought ) and there is no question of margin involved. But if I had done nothing and as per my view of the market the 3700 put would have expired worthless at expiry...I would have lost this Rs 16 which I recovered...plus by selling 4000 put I got another Rs 52 so total gain of Rs 16+52=68...and I am utilising extra margin lying with the broker (which is not earning any returns) to earn some returns and last few days time decay will work in my favour.....

All this of course if my view that 4000 will not get broken on the downside..... if proved wrong.." Bhago Mohan Pyare".....:lol:

Best Wishes...

Smart_trade

 

[TFL]

Yes...he probably thought it as a CALL written, that's why stated about margin.

Also, say, I'm holding some stocks in bulk and writing 'out of money' CALLs of the same...At what time(1st week, 2nd week? near expiry?) and in which months contract will be better to write calls.

ST...continue posting your option trades...good learning...