GOOD PROFIT: Hedged nifty positions with straddle...

how do you find this strategy....


  • Total voters
    117

pasha

Active Member
But july strangle will not give u any leeway as such - 4 days left.

Haan, if u r just selling and trying to gain on some premium devaluation over expiry, then ok I suppose.
Difficult to lose on the position so I put it on expecting a back premium drop of about 15 to 20%. Remains to be seen what actually happens.
The front month hedge is only a precaution against any unforeseen big move, I will encash only on the 30th.
 

Xaero

Active Member
If i just ask you to short nifty at 4502 and as soon as it gets triggered, place a reverse order for 4498 and vice versa...

Thats all you have to do... paper trade it for a few months. you'll get the idea...
Wht u are saying is short 1lot at 4502 then place 2 long orders at 4498 or 1? Didn't quite get wht you meant and why the 4pt gap?

You could have hedged with a long July strangle.
I have sold an Aug strangle today when NF was at 4558 for 342.
Hedged with OTM July strangle for 21.
Max loss on 500 point move either way is 30 :p
Difficult to lose on the position so I put it on expecting a back premium drop of about 15 to 20%. Remains to be seen what actually happens.
The front month hedge is only a precaution against any unforeseen big move, I will encash only on the 30th.
Can you please give some details? I have no idea what you are talking about. new at this.
Thanks.
 

linkon7

Well-Known Member
Wht u are saying is short 1lot at 4502 then place 2 long orders at 4498 or 1? Didn't quite get wht you meant and why the 4pt gap?
Stay short in nifty below 4500 and stay long above 4500....
thats all. Use 2 points filter as a precaution...
 

Xaero

Active Member
Wht u are saying is short 1lot at 4502 then place 2 long orders at 4498 or 1? Didn't quite get wht you meant and why the 4pt gap?
Stay short in nifty below 4500 and stay long above 4500....
thats all. Use 2 points filter as a precaution...
Are we supposed to go long abover 4502? and short below 4498 instead of the other way round?
 

linkon7

Well-Known Member
Are we supposed to go long abover 4502? and short below 4498 instead of the other way round?
Does it matter. If you want to short nifty below 4500, you can short it by placing a short trigger at 4502 or 4498, depending on how strong you feel about 4500 acting as a support. sometimes, when i feel 4490 is a strong support, i short it at 4488. That 12 points gave it room for a bounce back.

Totally depends on where you feel comfy. No one is going to spank you if you let go of 2 points or 12 points.
 

Xaero

Active Member
Does it matter. If you want to short nifty below 4500, you can short it by placing a short trigger at 4502 or 4498, depending on how strong you feel about 4500 acting as a support. sometimes, when i feel 4490 is a strong support, i short it at 4488. That 12 points gave it room for a bounce back.

Totally depends on where you feel comfy. No one is going to spank you if you let go of 2 points or 12 points.
No no, what I meant to ask is did you mean short at 4502 or at 4498? If you place it at 4502 it may not reach it and if it doesn't break 4500 then you'll end up with a losing trade...

http://www.traderji.com/options/28235-good-profit-hedged-nifty-positions-straddle-17.html#post340385
 

linkon7

Well-Known Member
No no, what I meant to ask is did you mean short at 4502 or at 4498? If you place it at 4502 it may not reach it and if it doesn't break 4500 then you'll end up with a losing trade...

http://www.traderji.com/options/28235-good-profit-hedged-nifty-positions-straddle-17.html#post340385
Understand the concept. A short straddle is a delta neutral strategy. Meaning if nifty remains near the mean (4500) we gain from the position as both the call and put will lose value slowly. As long as it remains rangebound, plus minus 200 points from 4500, you still will earn 395-200 = 195 points. Now, what i am targeting is to use this strategy to hedge the nifty positions. Refer the first link in the first post for knowing how the positions help in hedging nifty.

Normally, i use nifty pivots as the entry point, so there is lesser chance of a bounce back.

Look at it this way, just because it works or me does not mean you will be comfortable with it. You have to find a strategy that you can depend on. I spent 2 months paper trading this, then 2 months trading this. Now i have moved on to different strategy all together.
 

heeemz

Active Member
If i just ask you to short nifty at 4502 and as soon as it gets triggered, place a reverse order for 4498 and vice versa...

Thats all you have to do... paper trade it for a few months. you'll get the idea...
Linkon: Thanks Buddy...

Here are the details of day 1 - first paper trade on this stretegy...

Sold Aug 4500 PE at 185
Sold Aug 4500 CE at 202
==================
Total Sell Value = 387

Nifty Future = Bought two lot at 4510

Status as of 24/07

Sold 4500 PE at 185, Current value stands at 153
Sold 4500 PE at 202, Current value stands at 238
===================================
Current Status (P/L) = -4

Nifty Future = Bought two lot at 4510, Current value stands at 4578. I will reverse the NF position if it trades below 4500; else will continue to hold the NF position.
 

VJAY

Well-Known Member
Dear Linkon,
Thanks for your great posts for option tradings .Can you elaborate when & which strategies use for sideway market,uptrend market and downtrend market.Give some detailed ans with examples.It will very help full us.
 

heeemz

Active Member
Linkon: Thanks Buddy...

Here are the details of day 1 - first paper trade on this stretegy...

Sold Aug 4500 PE at 185
Sold Aug 4500 CE at 202
==================
Total Sell Value = 387

Nifty Future = Bought two lot at 4510

Status as of 24/07

Sold 4500 PE at 185, Current value stands at 153
Sold 4500 PE at 202, Current value stands at 238
===================================
Current Status (P/L) = -4

Nifty Future = Bought two lot at 4510, Current value stands at 4578. I will reverse the NF position if it trades below 4500; else will continue to hold the NF position.
Status as of 27/07

Nifty Options
Sold 4500 PE at 185, Current value stands at 151
Sold 4500 PE at 202, Current value stands at 232
===================================
Current Status (P/L) = +4

Nifty Future
No new action taken, continuing to hold 2 lots of NF bought at 4510, Current value stands at 4576. I will reverse the position if it trades below 4500; else I will continue to hold it.
 
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