Collar strategy for Nifty future

[hmp]

1) Sold 1 lot current Month (Dec.) Future @ 8350.00

2) Sold 1 lot next Month put Option ( Jan. 8100 PE) @ 47.35

3) Bought 1 lot current Month call Option ( Dec. 8400 CE) @ 49.80.

I will square up my position @ +/- 100 points ie Nifty touches @ 8250 or 8450 ,which ever hits first.
Now how to calculate profit & loss? I would require detailed calculation.
Thanks & regards.

 

[Tradewithhunter]

1) Sold 1 lot current Month (Dec.) Future @ 8350.00

2) Sold 1 lot next Month put Option ( Jan. 8100 PE) @ 47.35

3) Bought 1 lot current Month call Option ( Dec. 8400 CE) @ 49.80.

I will square up my position @ +/- 100 points ie Nifty touches @ 8250 or 8450 ,which ever hits first.
Now how to calculate profit & loss? I would require detailed calculation.
Thanks & regards.

Assume NF hits 8250 on Monday, NF will be 100 point profit, Jan Put option will move up by 25 odd points so loss of 25 points.... Dec 8400 call will fall about 25-30 points as well so loss another 25-30 points... net profit of around 45-50 points.... reduce brokerage and changes and you will end up with 40 odd points profit.


Assume opposite now that NF hits 8450 on Monday, NF will be in 100 point loss, Jan Put will fall by 10-15 points so 10-15 points loss, Dec 8400 CE will be trading at 100-105 so 50 or 55 points profit there as well. Gross result will be around 60-65 points loss. Add brokerage and other taxes and your loss will be around 65 - 70 points loss.

So you either win 40 points or you lose 65 points.

Cheers
SH

 

[hmp]

SH Sir thanks
One more thing i would like to know is what will happen to sold put premium? Will it add to my profit or not?
Regards.

 

[Tradewithhunter]

SH Sir thanks
One more thing i would like to know is what will happen to sold put premium? Will it add to my profit or not?
Regards.

above calculations include all sold put premium. Time decay assumed is minimum as the assumption is you hit +/-100 on Monday itself.

The more time nifty spends between 8250-8450 range, the better your profit (or smaller your losses) will become.

Cheers
SH

 

[hmp]

I would like to have more information about collar strategy use to hedge nifty futures.I think its a better option for stop loss.Can someone provide me a link or in fact use this thread to have more discussion on this topic.
Regards

 

[Somatung]

I would like to have more information about collar strategy use to hedge nifty futures.I think its a better option for stop loss.Can someone provide me a link or in fact use this thread to have more discussion on this topic.
Regards

Hi Hmp

Tradewithhunter has given you good and valuable answers to your queries.

The following member (V'nod47) seems to love collars, as he opens threads about them in any derivate he seems to trade them (maybe).

http://www.traderji.com/general-trading-investing-chat/96731-trading-strategy-nifty.html#post1038347

http://www.traderji.com/general-tra...6273-option-strategy-infosys.html#post1028039

Maybe you and him start to talk to each others. If time permits I will ask you some questions or you may ask what you would like to know more about collars. By the way: Do you use OptionOracle, as with that tool you could visualize your option trades?

Take care / Dan

 

[hmp]

Hi Hmp

Tradewithhunter has given you good and valuable answers to your queries.

The following member (V'nod47) seems to love collars, as he opens threads about them in any derivate he seems to trade them (maybe).

http://www.traderji.com/general-trading-investing-chat/96731-trading-strategy-nifty.html#post1038347

http://www.traderji.com/general-tra...6273-option-strategy-infosys.html#post1028039

Maybe you and him start to talk to each others. If time permits I will ask you some questions or you may ask what you would like to know more about collars. By the way: Do you use OptionOracle, as with that tool you could visualize your option trades?

Take care / Dan

Thanks for showing yourI interest in this thread.We would love to take guidance from masters like you.
As per oracle i don't have any idea.I just follow daily heiken ashi chart for nifty trend and act accordingly. In fact this is my first trade using this technique. That s why i took help of SH sir. I want to learn more of this strategy.
Actually i have decided to concentrate only on this strategy because i suppose it suits to me.And i find its better option for stop loss.
.Regards.

 

[Somatung]

1) Sold 1 lot current Month (Dec.) Future @ 8350.00

2) Sold 1 lot next Month put Option ( Jan. 8100 PE) @ 47.35

3) Bought 1 lot current Month call Option ( Dec. 8400 CE) @ 49.80.

I will square up my position @ +/- 100 points ie Nifty touches @ 8250 or 8450 ,which ever hits first.
Now how to calculate profit & loss? I would require detailed calculation.
Thanks & regards.

Hi Hmp

As you do not trade a pure, simple "Collar" shown in any books, instead an interesting mix of at least two different strategies at the same time, I will allow my self to make this little post to add a bit to your nice above post. Hope you do not mind.

As you trade three legs with different time frames, the combinations to move on with them would be immense. You already told to set an end of this trade on any move in either direction of 100 points and thats a clear way of doing a trade or handling a trading plan :thumb:

Here some more infos for those who are interested in more infos about what is included in the above mentioned trading strategy from Hmp. The writer is mentioning stocks, but it applies in most cases even to futures. The part: "Structures" in those article will allow you to see the three legs in different ways in case you not already have recognized it or do all your option strategy trading divided into all combinations your legs show on the matrix.

https://www.thinkorswim.com/tos/displayPage.tos?webpage=lessonCallsPuts

Take care and have a nice evening over there / Dan

 

[Somatung]

@Hmp

How is your trade going? Any plans of now or just as it is?

 

[hmp]

@Hmp

How is your trade going? Any plans of now or just as it is?

Hi
For the first trade i booked the profit of 100 points. After that I was in hesitation to take short position so I bought Jan800 CE & PE @ 248.95 & 121.65 respectively.Till now I am in profit I don't know what you call this strategy in technical terms.Rather I would like to ask you that what is the better way to take the position in this kind of situation, where market may go on any side? Is there is any kind of collar strategy for this?
Thanks & regards.