Iron Butterfly -Nifty

[jamit_05]

Set #1

Long --> NOV 10700 CE 101

Short --> NOV 10500 CE 200
Short --> NOV 10500 PE 177

Long --> NOV 10300 PE 111

---------------------------------
Net Credit 165


Max Loss: 200 - 165 = 35

Exit: Not Planned.
Entry should ideally be at the End of a strong closing day, when a good premium is received.

 

[mazher]

Hi Amit ji taken for 36 point difference thanks.

 

[jamit_05]

Our profit from this spread will not come from Theta, time decay, but from where Nifty Expires.

General strategy is this: Nifty has a monthly ATR of 500. So, when nifty reaches any of the "wings" we initiate a new spread with strike price at the wing.

The end result is Bull Put and Bear Call credit spreads with strike prices going away as we progress into the month.

 

[mazher]

Ok thanks Amit ji I am following this thread and the trade thanks.

 

[jamit_05]

Ok thanks Amit ji I am following this thread and the trade thanks.

I dont promise anything of value, as this is all very unconventional, and experimental. I have a good feeling about this is because, the risk is limited. This is a good starting point.

 

[traderniftybull]

BTW
How much money involved,
in buying 2 legs options, as margin in writing 2 legs options, and how much premium received back
Thanks

 

[RadhuK]

BTW
How much money involved,
in buying 2 legs options, as margin in writing 2 legs options, and how much premium received back
Thanks

In US exchanges , when you short call N putt of same strike price... brokers block margins for only one of them.
because price on expiry will be either above or below, not BOTH
But here in India , brokers block margins for both of them
Hence, double margin required....
Even with InteractiveBrokers, indian branch.. which is US based

 

[traderniftybull]

hmmm
Thats why asked it, bro
I thought that his broker might be providing some concession in margin money

 

[mazher]

I dont promise anything of value, as this is all very unconventional, and experimental. I have a good feeling about this is because, the risk is limited. This is a good starting point.

Ok Amit Ji no issue I am also learning something and I am trading with one lot only and I know my loss if profit comes we will take otherwise I am prepared for the outcome thanks.

 

[mazher]

BTW
How much money involved,
in buying 2 legs options, as margin in writing 2 legs options, and how much premium received back
Thanks

In Zerodha they are charging around 95000 for this trade premium received is around 164 points.