Intraday strategy by buying Put and Call option of same rate

#1
I am doing paper trade on this strategy perhaps one of the straddle strategy. I am not an expert. From experts of option strategies I have request to kindly discuss this strategy.

In this my strategy I want to buy put and call options at same rate (nearly same premium ) say at Rs. 28 and Rs. 29 respectively. I give a stoploss of Rs. 5-6 gap to premium of unfavourable (less predictable) direction and simultaneously 10-11 point target to another favourable direction. Assuming Rs. 1-2 brokerage expenses. Can this strategy be worked daily to make profits consistently.

I neither have much time nor resources to devote to actually check this strategy movement. Those of u who have already followed it or know about it Kindly discuss drawbacks and failure points.

Perhaps failures may result where target is not reached because of rangeboud market and both side may go with minor stoploss gaps (Rs. 5-6 difference).

Your opinions please
 

Rish

Well-Known Member
#2
I am doing paper trade on this strategy perhaps one of the straddle strategy. I am not an expert. From experts of option strategies I have request to kindly discuss this strategy.

In this my strategy I want to buy put and call options at same rate (nearly same premium ) say at Rs. 28 and Rs. 29 respectively. I give a stoploss of Rs. 5-6 gap to premium of unfavourable (less predictable) direction and simultaneously 10-11 point target to another favourable direction. Assuming Rs. 1-2 brokerage expenses. Can this strategy be worked daily to make profits consistently.

I neither have much time nor resources to devote to actually check this strategy movement. Those of u who have already followed it or know about it Kindly discuss drawbacks and failure points.

Perhaps failures may result where target is not reached because of rangeboud market and both side may go with minor stoploss gaps (Rs. 5-6 difference).

Your opinions please
Not possible to make profit with consistency in this option strategy.

Do back test in nifty options last 6 months and see the net outcome. You will land into trouble without doing proper tool and technical infrastructure.
 
#3
Highly unlikely u will make profits, some days u mite but most of the days u would end up loosing at least 4-5 ruppes, add commissions and taxes and u will slowly bleed to death
 

gkpc

Well-Known Member
#4
I am doing paper trade on this strategy perhaps one of the straddle strategy. I am not an expert. From experts of option strategies I have request to kindly discuss this strategy.

In this my strategy I want to buy put and call options at same rate (nearly same premium ) say at Rs. 28 and Rs. 29 respectively. I give a stoploss of Rs. 5-6 gap to premium of unfavourable (less predictable) direction and simultaneously 10-11 point target to another favourable direction. Assuming Rs. 1-2 brokerage expenses. Can this strategy be worked daily to make profits consistently.

I neither have much time nor resources to devote to actually check this strategy movement. Those of u who have already followed it or know about it Kindly discuss drawbacks and failure points.

Perhaps failures may result where target is not reached because of rangeboud market and both side may go with minor stoploss gaps (Rs. 5-6 difference).

Your opinions please
I am no expert either... my view is that it will not work when there is high Time value there in the Options. As the options near expiry there may be bigger contra movement simultaneously in both In the money Calls and Puts...may be it "may' work nearing expiry!
 

gunsho

Well-Known Member
#5
I am doing paper trade on this strategy perhaps one of the straddle strategy. I am not an expert. From experts of option strategies I have request to kindly discuss this strategy.

In this my strategy I want to buy put and call options at same rate (nearly same premium ) say at Rs. 28 and Rs. 29 respectively. I give a stoploss of Rs. 5-6 gap to premium of unfavourable (less predictable) direction and simultaneously 10-11 point target to another favourable direction. Assuming Rs. 1-2 brokerage expenses. Can this strategy be worked daily to make profits consistently.

I neither have much time nor resources to devote to actually check this strategy movement. Those of u who have already followed it or know about it Kindly discuss drawbacks and failure points.

Perhaps failures may result where target is not reached because of rangeboud market and both side may go with minor stoploss gaps (Rs. 5-6 difference).

Your opinions please
For the target you mentioned, nifty has to move somewhere. Those good times pre-jul 2012, we had nifty moving nicely most of the days. Nowadays, positional traders, willing to hold a trade for more than a month, have more advantage (particularly when entire day is just 40 points range and month is 150 range, but still market sustaining major lows from june/jul). Incase if you are back testing this, try it for entire 2012. As mentioned by others, keeping blind SL 5/6 points would kill you on long run.

On the lighter side, if you don't have time to check a strategy (or back test), you might want to look for a tip provider ;)
 

TraderRavi

low risk profile
#6
with strangle or straddle, more chances of profit, before some big event or from 7 days before expiry...
 

DanPickUp

Well-Known Member
#7
Do strangle in Same Strike Price.

i.e. Strike Price 5900 March
Buy Call at 58 and Put at 86 (Make similar amount of investment say close to 25000) 450*58 and 300*86

Now say the market goes 20 points down then

Sell Call at 49.5 and Put at 110

Now here,
Loss made in Call is -3870
Profit made in Put is 7800

Your overall profit is 3930.

Do Paper Trading atleast 10 days. Buy only when the market starts say around 9.15 am - 9.20 am

Happy Trading

:thumb: :)
You seem to do a lot of theoretical trading. Fine, as we all start some where.

Paper trades for such ideas is a waste of time, as live markets not do what you think you achieved in your paper trades.

So do not fall in such traps and do not listen to such ideas from people which not do live trades in options which such amounts of options.

Markets do not wait for your filled. They move on.

Hey Dan, common: I will place limit orders for the call and the put.

Fine. Do you think you will find somebody just in a blink of a second which will take such amount of options on his own risk. :lol:

Good learning and as always / Good trading

DanPickUp
 
#10
You seem to do a lot of theoretical trading. Fine, as we all start some where.

Paper trades for such ideas is a waste of time, as live markets not do what you think you achieved in your paper trades.

So do not fall in such traps and do not listen to such ideas from people which not do live trades in options which such amounts of options.

Markets do not wait for your filled. They move on.

Hey Dan, common: I will place limit orders for the call and the put.

Fine. Do you think you will find somebody just in a blink of a second which will take such amount of options on his own risk. :lol:

Good learning and as always / Good trading

DanPickUp
Am just talking about 7 lots to 10 lots of nifty at premium price. (margin required of about 50k - 60k)

i will not place limit orders i will just sell at the market price.

can you please explain where i am wrong?
 

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