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

[jamit_05]

20 lots NF Mar 10915 : Decay 1000
40 lots 10900 Apr PE 214 : Cost 8600 (cost 428 per set -> target 480)
Loss Carried Forward: 3000
---------------------------------
Total Target 13000

SELL NF 10972 @ 10934 - 10915 = 20
sell 2 lots PEs @ 11000 @ 175 = 350 (instead of 10900)
-----------
+410


SELL NF 11080 @ 11050-10915=+135
Sell 2 lots PEs @ 145 = 290
------
+425

SELL NF 11080 - 10915 = +165
sell 2 lots PEs @ 145 = +290
---------------------
+460

SELL NF 11020 - 10915 = +105
Sell NF 11160 - 10915 = +245
Sell NF 11220 - 10915 = +295
Sell NF 11315 - 10915 = +400
Sell NF 11315 - 10915 = +400
Sell NF 11365 - 10915 = +450
Sell NF 11430 - 10915 = +515
Sell NF 11515 - 10915 = +600
Sell 2 lots 11000 May 215 = +430
Sell NF 11555 - 10915 = +640
SELL 2 LOTS 11300 Apr 145 = +290
SELL 2 LOTS 11300 Apr 130 = +260
Sell NF 11575 - 10915 = +660

---------
sell 2 lots 11500 apr 176 = +350
sell 2 lots 11400 apr 145=+290
sell 2 lots 11400 apr 185 = +370
sell 2 lots 11400 apr 190 = +380
sell 2 lots 11400 apr 200 = +400

It was a great decision selling these 10 lots of PEs
---------
sell 2 lots 11500 apr 155 = + 310
sell 2 lots 11400 apr 155 = + 310
sell NF 11675 - 10915 = +760

Sell 2lots 11700 11APR = +240
Sell NF 11830 - 10915 = +925

Sell 2lots 11700 11APR = +210

 

[jamit_05]

@angira

Consider the following trade:

Sell 25th April CE 11700 180
Buy 11th April CE 11700 70

Worst case 11th April price is below 11700. Loss around 10 to 15 points.
Profit starts above 11th April 11720.

Winning Move:

If price reaches 11800 I will buy same PE spread. As a result, Max loss will be 15 points, but gain will be around 70 points.

I have come to believe that the real magic in option spread is to not try to cover your losses completely let your strategy leave something on the table. instead work on setting the risk reward ratio to be high.

Even if 50% of your high RR spreads succeed you should make enough.

 

[jamit_05]

Buy CE 25th April 11700 127
Sell CE May 12000 277
Collected 150

Worst CASE
On 25th April Expires at 11700.
I lose 125 pts on 25thApr CE
But gain 70 on May CE, estimate, due to time decay.
Net loss 50... Estimate

Best Case
On 25th April Expiry at 12000
So, Apr CE gains 300-125 =175pts.
Then May CE will trade at 350-277=75 loss
Max Gain is around 100

RR 30:100 around 1:3
Decent enough.

 

[jamit_05]

Another simple high probability trade

Buy NF 11720 / Apr expiry
Buy PE 11700 25Apr Exp cost 130
Max loss 20+130=150

As soon as spot 11800 reached, that is after 150 pt move.... I will sell ATM CE at around 150, and maximize gain.

High RR trade.

 

[jamit_05]

20 lots NF Mar 10915 : Decay 1000
40 lots 10900 Apr PE 214 : Cost 8600 (cost 428 per set -> target 480)
Loss Carried Forward: 3000
---------------------------------
Total Target 13000

SELL NF 10972 @ 10934 - 10915 = 20
sell 2 lots PEs @ 11000 @ 175 = 350 (instead of 10900)
-----------
+410


SELL NF 11080 @ 11050-10915=+135
Sell 2 lots PEs @ 145 = 290
------
+425

SELL NF 11080 - 10915 = +165
sell 2 lots PEs @ 145 = +290
---------------------
+460

SELL NF 11020 - 10915 = +105
Sell NF 11160 - 10915 = +245
Sell NF 11220 - 10915 = +295
Sell NF 11315 - 10915 = +400
Sell NF 11315 - 10915 = +400
Sell NF 11365 - 10915 = +450
Sell NF 11430 - 10915 = +515
Sell NF 11515 - 10915 = +600
Sell 2 lots 11000 May 215 = +430
Sell NF 11555 - 10915 = +640
SELL 2 LOTS 11300 Apr 145 = +290
SELL 2 LOTS 11300 Apr 130 = +260
Sell NF 11575 - 10915 = +660

---------
sell 2 lots 11500 apr 176 = +350
sell 2 lots 11400 apr 145=+290
sell 2 lots 11400 apr 185 = +370
sell 2 lots 11400 apr 190 = +380
sell 2 lots 11400 apr 200 = +400

It was a great decision selling these 10 lots of PEs
---------
sell 2 lots 11500 apr 155 = + 310
sell 2 lots 11400 apr 155 = + 310
sell NF 11675 - 10915 = +760

Sell 2lots 11700 11APR = +240
Sell NF 11830 - 10915 = +925

Sell 2lots 11700 11APR = +210
Sell lots 11650 11APR = 60
Sell lots 11650 11APR = 66
Sell lots 11600 11APR = 61
Sell lots 11600 11APR = 61

 

[jamit_05]

Consider the following trade:

Sell 25th April CE 11700 180
Buy 11th April CE 11700 70

Profit booked...
Sell 25th April CE 11700 180... 108 = +72
Buy 11th April CE 11700 70... 18=-52

Gain 20 points.... 1:1 is good enough

 

[jamit_05]

Will focus on weekly expiry trades...

Trade 1
Price will jump a 100 points before 18th
Buy oTM CE 11800 18th April 28.00

Trade 2
Support 11550 will maintain till 18th
Sell OTM 11500PE 50 18Apr
Buy OTM 11400PE 5 11Apr

 

[angira]

@angira

Consider the following trade:

Sell 25th April CE 11700 180
Buy 11th April CE 11700 70

Worst case 11th April price is below 11700. Loss around 10 to 15 points.
Profit starts above 11th April 11720.

Winning Move:

If price reaches 11800 I will buy same PE spread. As a result, Max loss will be 15 points, but gain will be around 70 points.

I have come to believe that the real magic in option spread is to not try to cover your losses completely let your strategy leave something on the table. instead work on setting the risk reward ratio to be high.

Even if 50% of your high RR spreads succeed you should make enough.

Nice trading Jamitbhai,

But whenever buy any ce or pe... some fears of time decay, but may be this will work this way then good enough.

 

[jamit_05]

Nice trading Jamitbhai,

But whenever buy any ce or pe... some fears of time decay, but may be this will work this way then good enough.

Time decay problem is there, but I want only 100 point jump to book profit and get out.

See, how market jump only 50 points and both my trades are in profit

 

[jamit_05]

Buy CE 25th April 11700 127
Sell CE May 12000 277
Collected 150

Worst CASE
On 25th April Expires at 11700.
I lose 125 pts on 25thApr CE
But gain 70 on May CE, estimate, due to time decay.
Net loss 50... Estimate

Best Case
On 25th April Expiry at 12000
So, Apr CE gains 300-125 =175pts.
Then May CE will trade at 350-277=75 loss
Max Gain is around 100

RR 30:100 around 1:3
Decent enough.

Here the trick is, the closer expiry decays faster, but also gains more.

Apr gains 70 points with every 100 pt increase, whereas May gains only 30.
But, the time decay is really fast. It will lose all 150 pts in 15 days. And most of it in the last week.

This trade makes sense only when you expect price to move, in slow markets you must short closer, and buy further away options.

Right now, this trade is gaining 15 odd points, so at spot 11700 i will exit it at 20 point profit., around 1:1, which is going to be around average profit target in options trading.