Low Risk Low Returns- Target 50 NF per month per NF Lot

[jamit_05]

Set #4

BUY 10 lots NF NOV 10293
BUY 20 lots 10300PE NOV @ 267
Cost 5340 points

SELL 10200 PE 232


**note**
10200 ce 261
10100 pe 191
total 452

 

[kingkrunal]

It is low risk, low return setup. The positions are spread vertically and horizontally, to mitigate risk and take whatever little you can, along the way.

so is there any specific way where you reduce the risk

 

[jamit_05]

so is there any specific way where you reduce the risk

I have just started Set#4, you could follow it and ask specific questions.

 

[manny.here]

Set #4

BUY NF NOV 10293
BUY 20 lots 10300PE NOV @ 267
Cost 5340 points

SELL 10200 PE 232

**note**
10200 ce 261
10100 pe 191
total 452

Bit confused here .

How many NF Nov lots you have purchased
How many 10200 PE lots you have sold
And what about 10200 ce and 10100 pe , purchased several lots ?

Or all 1 lots purchased and rest you will buy depending on premium .

Trying to understand how you are building this trade and on what basis. Sorry if I missed some details here.

 

[jamit_05]

Bit confused here .

How many NF Nov lots you have purchased
How many 10200 PE lots you have sold
And what about 10200 ce and 10100 pe , purchased several lots ?

Or all 1 lots purchased and rest you will buy depending on premium .

Trying to understand how you are building this trade and on what basis. Sorry if I missed some details here.

10 lots of NF have been purchased, to sell if market goes higher.
10 lots PEs, to protect these NF.
and
10 lots PEs also hve been purchased. Will sell ATM PEs against these if market goes lower. Essentially converting them to Bear Put Spreads.

The game plan is to sell enough Options against my purchased set, so as to cover the cost plus a little profit if things go well.

This has worked out well last three times.
And Ignore the **note**, its for my reference.

 

[manny.here]

10 lots of NF have been purchased, to sell if market goes higher.
10 lots PEs, to protect these NF.
and
10 lots PEs also hve been purchased. Will sell ATM PEs against these if market goes lower. Essentially converting them to Bear Put Spreads.

The game plan is to sell enough Options against my purchased set, so as to cover the cost plus a little profit if things go well.

This has worked out well last three times.
And Ignore the **note**, its for my reference.

Sorry I am very new to these concepts , so putting it from a layman's perspective ( so that I can understand )
Base aim : Sell enough Options against the purchased set, so as to cover the cost plus a little profit if things go well.

Set #4
BUY 10 lot NF NOV Fut @10293 -- To sell if market goes higher
BUY 10 lots 10300 PE NOV @ 267 -- To protect from any downside in Nifty

Bear Put Spreads :
BUY 10 lots 10300 PE NOV @ 267 --
SELL 10 lots 10200 PE 232 -- against above 10 lot calls bought

Buying - 20 lots -- Cost 5340 points
Selling - 10 lots -- Received 2320 points

MY assumptions , please correct if I am wrong
- So as per my understanding you will continue adjusting this set based on premiums and market conditions
- It will continue till you get a good profit or till Nov towards expiry with some profit

Apologies if I am bothering you here and you can refer me to somewhere I can learn basics of these concepts.

 

[jamit_05]

As market goes up and down, we will continue to sell ATM options against our purchased set.

Complications kick-in when the volatility starts to shrink. You purchase a set for 5500 points, and within a week it drops 30%. Furthermore, this method thrives when swings are wide. When the price does not move at all, when it is crawling like in the month of May and June '18, loss is as much as 25%. This is unpleasant because the profit is never more than 10 to 15%.

The trick is to maximize the profit potential, to make up for the losses in slow markets. For that one has to be able to answer:

What
When and
How much to sell ?

 

[jamit_05]

Set #4

BUY 10 lots NF NOV 10293
BUY 20 lots 10300PE NOV @ 267
Cost 5340 points

SELL 10200 PE 232
SELL 10200 PE 210
SELL 10200 PE 204
SELL 10200 PE 204
SELL 10100 PE 227


**note**
10200 ce 261
10100 pe 191
total 452

10250 CE 242
10150 PE 191
total 433

 

[jamit_05]

Realized that set#2 and #3 wouldve given double the profit, only if I had let them expire...

 

[manny.here]

Set #4

BUY 10 lots NF NOV 10293
BUY 20 lots 10300PE NOV @ 267
Cost 5340 points

SELL 10200 PE 232
SELL 10200 PE 210
SELL 10200 PE 204
SELL 10200 PE 204
SELL 10100 PE 227

Are all these sold 10 lots each ?