An Idiot's Option Trading strategy : Please bear with me

jyotixxx

Well-Known Member
#1
With all due respect
@AW10
@Danpickup
@Smart Trade and all Traderji Gurus
Please bear with me.

Moderators please let the thread alive for few weeks.

It's the same old strategy or may be the most idiotic option strategy tried by lot many of people at some point of time. There are also some threads on it.

STRATEGY

Select a stock that is at resistance or support and breakout is imminent.
Buy Call and put ATM/ITM same strike price :D:D:D:D
Put Limit prices daily on both Call and Put. Limit price should be equal to total premium paid.

PROFIT BOOKING

Four conditions:
a) 5-6% jump within 4-6 trading session easily reaches above mentioned limit price on one leg. Now one can book profit on the other leg.

b) One can continue to hold second leg if bounce back or reversal is likely.

c) When a strong trend is obvious on one side (supported by other indicators), one can continue both positions.

d) 2-3% jump - one leg gains more than the loss of the other leg. Book profit on one and loss on the other.

MERITS

Loss limited
No fear of gap up down/ Fluctuations
Gain may be huge depending upon how correct one is in determining trends

DEMERITS:clap::clap::clap:

Its a slow poison. Time decay is worst enemy. Waiting for a breakout is real frustrating.
Losses from both legs bought in the first week of a contract may be as high as 20-25k by third week if no directional movement seen.
After a good movement due to low volumes one may not be able to sell at desired price (In contrast to futures)
No experts recommend it due high failures.

WHY THIS STRATEGY

Seen some profits in last one month. Lets c if it continues. There won't be any back testing. Only looking forward.

SOME OTHER RELEVANT POINTS

No fresh positions after 20th for same contract month.
Entry preferably after 3 pm and at a time when the script is stable.
Both leg entry simultaneously with as little delay as possible.

WARNING :

Do not put your money in this strategy if you don't know what you are doing.
I am doing it at my risk. No one to blame!!!

Last Trades done by me:

JP associate:
Entry 07 March- strike 47.5 call@ 2.15
Put@ 2.70
max loss-4.85x8000=38800
Exit 11 March call @5.10
put @ 1.35
Realized Profits- 12800

Maruti:
Entry 18 March -Strike 1900 [email protected]
Strike 1850 put@35
max loss: 18200
Exit 20 March strike 1900 [email protected]
strike 1850 [email protected]
Realized Loss - 3850

Power Grid:
Entry 20 March- Strike 100 call @1.25
Put @1.00
max loss-2.25x4000=9000
Exit 21 Mach- Call @2.25
put @0.35
Realized profits- 1400 :mad: closed early

Hindustan Unilever:
Entry 24 march April series -Strike 580
Call @19.30
Put @ 10.45
max loss-14875

Exit 31 March Call @34.9
Put @4.85
Realized Profits-5000
 
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jyotixxx

Well-Known Member
#2
Why this thread is not in the advanced strategy section?

Really, I want to keep this strategy as simple as possible!!! No alpha, no beta, no gamma, no delta .....That's why no advanced trading.
Success of this strategy mainly depends on the underlying. The underlying script must not stay at the strike price for long. So when one choose the stock it must be just breaking a support or resistance. Very few stocks will not move at support or resistance. There will be exceptions and accordingly losses. However if overall gain is more than losses then we are in profits!!

I have tried a lots of strategies. Gained some good profits from some and losses from some. But nothing is constant. So why not this strategy.


Trades in the month of April Till now

Tata Global Beverage

Entry 01 April strike150 CE@ 6.80
PE@ 5.30
Max loss-24200
Still Open -Unrealized loss approx 8000

Just Dial



Max loss: 23412
Realized profits: 10837
 
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#5
#9
Let's give me a try....with actual trades and my way!!!:p
Of course. It is an interesting strategy with some risk included. If you understand the details, I am sure you will succeed.

- Be clear about the break evens on each side.
- Have an idea about the vola in the market.
- Know in advance what you want to do when market not will reach any of your break even points.
- Know in advance how you want to protect any profit in case market jumps shortly in the profit zone and back again in the loss zone in one day.

Good luck and good trading :)
 

jyotixxx

Well-Known Member
#10
Will watch M&M finance on next trading day. Friday's closing was 240.2
If it goes below 239 after 3.00pm on next trading day I will enter trade.
 
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