Low Risk Low Returns- Target 50 NF per month per NF Lot
- Thread starter jamit_05
- Start date
Do not want to earn from trends;
In fact if it runs 300 points in favour... to say 6300, will buy another set of PEs @6300 since NF will hv already covered this expense.
In this I wish to catch the turns and hence extract 50 pts per lot of difference while the down side risk of holding NF is nullfied by keeping PEs.
In fact if it runs 300 points in favour... to say 6300, will buy another set of PEs @6300 since NF will hv already covered this expense.
In this I wish to catch the turns and hence extract 50 pts per lot of difference while the down side risk of holding NF is nullfied by keeping PEs.
Hi dear ST
Got your point and your points are always coming from a gentlemen s behavior. May I ask: But isnt it like that that even big boys many times not exactly know how to reduce there risk? Wouldnt it be like this that posting some of the never ever published ways of trading would just mainly play in there hands with out having to pay for that kind of knowledge?
Dear Jamit_05 is playing a long synthetic call and then reducing his lots step by step after certain moves. That is how I understand the idea behind the post. Please correct me when I did wrong. His analyzing picture looks some how like that and is under the zero line http://www.theoptionsguide.com/synthetic-long-call.aspx
The idea is advanced and surely not comes from a beginner. Even than: Why should I keep puts for that long when market moves up?
Why should I keep a position in my depot which I see only loss? I do not like much risk, so I am a very risk adverse trader, but why keep the puts for so long? Why not let them go as market moves in the favorite direction?
Why not just set a stop loss for the future calculated on the profits made until now? At the moment market plunges, the loss on the future will be bigger than the profit on the long puts.
Holding long puts the way it is explained here, is in my personal way of valuing the idea to expensive, as they are atm. A better way to do so would be to buy long puts with a lower delta. You even could add a third leg, but that would be an other topic and would match the picture I showed, which is exactly at and not under the zero line and would be for a downtrend.
Just some out of the box comments for an advanced way of trading the synthetic long call strategy.
Good trading / DanPickUp
Got your point and your points are always coming from a gentlemen s behavior. May I ask: But isnt it like that that even big boys many times not exactly know how to reduce there risk? Wouldnt it be like this that posting some of the never ever published ways of trading would just mainly play in there hands with out having to pay for that kind of knowledge?
Dear Jamit_05 is playing a long synthetic call and then reducing his lots step by step after certain moves. That is how I understand the idea behind the post. Please correct me when I did wrong. His analyzing picture looks some how like that and is under the zero line http://www.theoptionsguide.com/synthetic-long-call.aspx
The idea is advanced and surely not comes from a beginner. Even than: Why should I keep puts for that long when market moves up?
Why should I keep a position in my depot which I see only loss? I do not like much risk, so I am a very risk adverse trader, but why keep the puts for so long? Why not let them go as market moves in the favorite direction?
Why not just set a stop loss for the future calculated on the profits made until now? At the moment market plunges, the loss on the future will be bigger than the profit on the long puts.
Holding long puts the way it is explained here, is in my personal way of valuing the idea to expensive, as they are atm. A better way to do so would be to buy long puts with a lower delta. You even could add a third leg, but that would be an other topic and would match the picture I showed, which is exactly at and not under the zero line and would be for a downtrend.
Just some out of the box comments for an advanced way of trading the synthetic long call strategy.
Good trading / DanPickUp
I am still not getting the core idea of this strategy but I would like to watch how jamit manages it....assuming we are in an uptrend and market takes a correction and comes down....now here do we liquidate some puts as they will be in profit or add some futures as we have double the qty of puts....
Next suppose market goes up, then are we selling some futures or buying more puts as our existing puts would have gone down in value......
Anyways, many things will get cleared when we see how it is managed.
I used to do ratio spreads when the ratio spread of 1:2 with 200 points difference was possible which used to give an effective range of 400 nifty points in which the ratio spread used to be profitable. But now the market has become more efficient and such spread in the diff of 100 nifty points is possible without any debit. But this gives effective range of only 200 points and which is not very safe....NF can move 250-350 points in a months time....
Other members are also most welcome to start new threads on how to get decent return on the large capital without taking excessive risk....look forward to such threads..
Smart_trade
Next suppose market goes up, then are we selling some futures or buying more puts as our existing puts would have gone down in value......
Anyways, many things will get cleared when we see how it is managed.
I used to do ratio spreads when the ratio spread of 1:2 with 200 points difference was possible which used to give an effective range of 400 nifty points in which the ratio spread used to be profitable. But now the market has become more efficient and such spread in the diff of 100 nifty points is possible without any debit. But this gives effective range of only 200 points and which is not very safe....NF can move 250-350 points in a months time....
Other members are also most welcome to start new threads on how to get decent return on the large capital without taking excessive risk....look forward to such threads..
Smart_trade
If NF is range bound like Oct and Dec '12 then we intend to earn from the ups and downs; In ups NF will be sold and in Down PEs will be sold, since they will be worth selling.
If NF runs 200 points up in the next week then clearly the expense is covered for the most part. So that is good news. Will wait for a market to go Over-Bought and turn to sell NF; And buy them back at lower or sell PEs if it is profitable.
If NF runs 200 pts down, then NF's loss will be covered by PEs (Might hv to pay a little MtoM due to delta imbalance). PEs will be worth selling. So in this downtrend, will look to sell NFs on up and PEs on down.
Plausible, yeah!
Q. Premium will shrink
A. Sure. Now APR PE is 110 and FEB PE is 65; Around Rs.45 of decay in 2 months. This should be manageable. Else, will take on some sensible and minimal risk. Should be interesting.
Every transaction that ends up in a loss only increases our Expense. A lot depends on having the NF trend right.
We do not foresee crisis cuz NFs are covered with PEs.
If NF runs 200 points up in the next week then clearly the expense is covered for the most part. So that is good news. Will wait for a market to go Over-Bought and turn to sell NF; And buy them back at lower or sell PEs if it is profitable.
If NF runs 200 pts down, then NF's loss will be covered by PEs (Might hv to pay a little MtoM due to delta imbalance). PEs will be worth selling. So in this downtrend, will look to sell NFs on up and PEs on down.
Plausible, yeah!
Q. Premium will shrink
A. Sure. Now APR PE is 110 and FEB PE is 65; Around Rs.45 of decay in 2 months. This should be manageable. Else, will take on some sensible and minimal risk. Should be interesting.
Every transaction that ends up in a loss only increases our Expense. A lot depends on having the NF trend right.
We do not foresee crisis cuz NFs are covered with PEs.
Last edited:
We entered the hedge in an uptrend, but after Friday's closing the trend seems to have turned to down. Lets see what the coming week presents.
Two budgets are due in the last week; On 26th and 28th Feb. So 2nd last week of Feb is exp to be in sub 100 pt range: a good time to act.
Market is 80% sideways and 20% trending
Want to be sure to not act in trending phase. If we find ourselves in such a squeeze the move should be undone.
Two budgets are due in the last week; On 26th and 28th Feb. So 2nd last week of Feb is exp to be in sub 100 pt range: a good time to act.
Market is 80% sideways and 20% trending
Want to be sure to not act in trending phase. If we find ourselves in such a squeeze the move should be undone.
Ok,
Atleast Last 2 year backtesting results will give better understanding to implement this strategy.
Last 5 year selling call and put has given average 68% return p.a., without any risk. Just check ! ! ! ! !
Only constraint, Margin Money, otherwise, safe strategy is selling the options is always healthy.
Atleast Last 2 year backtesting results will give better understanding to implement this strategy.
Last 5 year selling call and put has given average 68% return p.a., without any risk. Just check ! ! ! ! !
Only constraint, Margin Money, otherwise, safe strategy is selling the options is always healthy.
Hello
With a modest objective of capturing 50+ points, i am sure this will give a very high win/loss.
It is usually better to put up a picture but in this case the picture does not tell us much about the strat,
in-fact looking at it might give us a wrong impression
anyway here it is
Only small issue i see here is the slippage on the put side of the hedge, so i would select a nearer SP (maybe march) but overall a nice strat for extracting regular income from the markets.
Cheers
::thumb::
With a modest objective of capturing 50+ points, i am sure this will give a very high win/loss.
It is usually better to put up a picture but in this case the picture does not tell us much about the strat,
in-fact looking at it might give us a wrong impression
anyway here it is
Only small issue i see here is the slippage on the put side of the hedge, so i would select a nearer SP (maybe march) but overall a nice strat for extracting regular income from the markets.
Cheers
::thumb::
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