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

jamit_05

Well-Known Member
Covered 11400PE at 94.

This spread is now at breakeven. No loss.

Holding additional risk of
11600Ce
11550Ce
11500Ce

Expecting them to expire worthless/OTM.

Sold 11350CE @ 60
Sold 11400CE @ 40
 
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jamit_05

Well-Known Member
Done:

Buy 25July 11350PE 55
Sell 25July 11250PE 23
-----------------------------
Net Cost 32 points
Spread: 100 points
 
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jamit_05

Well-Known Member
After a down move will also employ

1Aug11300CE Buy Max PE OI strong support
1Aug11400CE Sell Max CE OI probable resistance
1Aug11500CE Sell
---------------------------
 

jamit_05

Well-Known Member
Had Purchased 11400PE-11300PE and 11350-11300PE bear put spreads and both will are doing well. 100 + 50 points less expense will be gained.

11200PE + 11200PE was sold at 17, to reduce expense. And it seems to be OTM as yet.

Now, I need to take a Bull Call Spread.

1st Aug
Buy 11200CE Max PE OI (11250CE)
Sell 11400CE Max CE OI
Cost is 55, gain 150... RR 1:3

When there is a move up, which is very likely, will sell 11500CE to reduce cost.
 

jamit_05

Well-Known Member
All worked out...

all four lots of 11400CE expired worthless, got 33*4=120 points premium.

11400 PE closed ITM, covered at 140
11350 PE closed ITM, covered at 130

11200 PE closed worthless... pocketed complete 17 points premium

Squared 11300 PE @ 28

All in all, following the trend and buy bear put spreads was profitable and low risk. Whereas, Atms gave mediocre profits compared to the risk involved.
 

angira

Well-Known Member
@angira

I think, one correct way to short options is a simple butterfly....

Short the body of near month ATMs: FEB 10900 CE + PE at 175 + 160 = 335
And buy wings, of 200 points away... 77 + 97 = 174
Net credit: 161 points. On which time decay will apply.

Max loss is 39 points at expiry. But, you will never let it expire, so practically max loss will be much less. Therefore, if you set your profit target 39 points, then its a good trade. This becomes low risk, low but fixed returns kind of a trade.
Jamitbhai,
we have actually discussed about this, but some query.

above u've mentioned is based on monthly expiry.

Can we go this butterfly for current weekly options? Bcoz if we want to short ATM Pair then this will
be right way.

Angira...
 

jamit_05

Well-Known Member
Jamitbhai,
we have actually discussed about this, but some query.

above u've mentioned is based on monthly expiry.

Can we go this butterfly for current weekly options? Bcoz if we want to short ATM Pair then this will
be right way.

Angira...
Trend is very strong this month. So, I am not sure whether a neutral spread would be beneficial.
 

angira

Well-Known Member
Trend is very strong this month. So, I am not sure whether a neutral spread would be beneficial.
Jamitbhai,
Then It will also be risky for last week, if we play within weekly options. So do not have take position with butterfly spread in last week of every month ?

And if we take butterfly spread position at starting of first week based monthly expiry then it can be good to exit before last week ?

Angira...
 
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jamit_05

Well-Known Member
Sold 11100CE+PE 5September Expiry

106+118= 224 Collected.

94+130=224

CE is getting lighter, hence must Sell more CEs

Loss: 20 points

SOLD 11250 CE 29Aug 20

Collected: 224

CMP: 115+106= 221
 
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Hi
jamit_05,
I have read your previous posts where NF and PE are bought.
Are you still paper trading it?
What are the results?

I did paper trade from 2 days with 5NF and 10PE and results are good because of the trending market.
When i checked the margin requirement for these positions in upstox I saw that 5 Lots NF and 10 lots PE costing around 90,000.
If this really works in every market then this is not LOW risk LOW returns but its LOW risk High returns strategy.

As you did this for past few years what are you final thoughts about this strategy.

Thank you.
 

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