Low Risk Options Trading Strategy - Option Spreads

[lazytrader]

In ITM short strangle, you do gain 412 rs.. but it is guranteed that u will be giving back 200 of this on expiry day or whenever u close the position.
Whereas with OTM short strangle, though u get only 213 rs. but there is chance that u don't have to give back anything (if spot expires between your strike range)..

So from net cash flow over the period till expiry, there is no difference.
But Brokerage / Magin requirement makes the difference.

Happy Trading

What I was saying is in you go for ITM then some amount is credited to you account whereas for the OTM it is debited (prem credit, margin debit). Since the one holding the cash get the interest income.

Secondly if the expiry is in the range then OTM will not be exercised so savings on brkg and taxes. ITM exercised regardless.

It turns out to be a small amount but the devil is always in the details so pays to take the trouble of calculating.

 

[DanPickUp]

Hy AW10

I hope you are ok. I did not ask any question in the last few post. It was nice to read all the posts and I am still more than pleased to know this thread. It is still Nr 1 for me.

So as you know me, I have questions.

And a thread also gets more interesting, as there are good questions and good answers. So let me ask this one with all the consequences.

Back Spreads.

It is a kind of spread. Do you have any kind of suggestion if you have a put back spread, after a certain time you sell a put and at the same moment you add a call credit spread to the combination. Is this kind of leg in a good and many possibility or what do you think about it ?

If this is the wrong thread to talk about that, tell me and we can start an other thread about that. But you are the man for me, so that is why I ask you. Sorry. You helped me a lot and that is why I ask you.

Regards and good trading

 

[munde_77]

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[AW10]

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If market goes up then
1) why to hold bearish position in upward market
2) in worst case, your risk is limited to 95 Rs., but u can cut it before expiry
3) You can adjust your position from bearish put spread to bullish put spread by selling 4700 put and buying 4400 put. That will give u 4400/4500 put spread. Ofcourse do proper analysis before adjusting the position and adjust only when it makes sense.

Happy Trading

 

[AW10]

Hy AW10

I hope you are ok. I did not ask any question in the last few post. It was nice to read all the posts and I am still more than pleased to know this thread. It is still Nr 1 for me.

So as you know me, I have questions.

And a thread also gets more interesting, as there are good questions and good answers. So let me ask this one with all the consequences.

Back Spreads.

It is a kind of spread. Do you have any kind of suggestion if you have a put back spread, after a certain time you sell a put and at the same moment you add a call credit spread to the combination. Is this kind of leg in a good and many possibility or what do you think about it ?

If this is the wrong thread to talk about that, tell me and we can start an other thread about that. But you are the man for me, so that is why I ask you. Sorry. You helped me a lot and that is why I ask you.

Regards and good trading

DanPickUp. Could u plz give example with strike price combination to discuss it in further.
Else it starts getting confusing.

As I understand at this stage, Put Backspread = 1 OTM long Put + 1 Bearish Put Spread.
When u r taking new position, 1 shrt put = bullish, and 1 Credit Call spread which is
Bearish position. That means from 2 bearish position, u want to adjust to 1 bullish/1 beraish position.

Not sure if I have got it right, but with example it might make more sense.
We will discuss it further.

Happy Trading

 

[DanPickUp]

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[sameer999]

Hi AW10 , can u tell me with which brokerage company u hv account ?

can u also help me with my other thread -


(sorry for posting in this section coz i am tired of waiting patiently only to see zero replys!:rofl

Thats why i suggested in "YOUR SUGGESTION'S" section that there shld be a facility to send personal messages to people and to connect directly to them.

http://www.traderji.com/brokers-trading-platforms/32672-rk-global-terms-conditions.html

as nobody wants to help me or hav time to answer as i see tht the thread has been viewed so many times but number of replies zero!
:rofl::rofl:

U must be havin general idea about that.


Thanks

 

[DanPickUp]

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[sameer999]

Hy sameer999



If so, I am very sorry.

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The work AW10 did has a value you maybe do not understand. It is what option traders want to know and it is one of the best I know at this time in this forum. ( Sorry, but this is my opinion )

Regards and good trading

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maintain your calm which is the most important thing required to be successful in share market.[/COLOR]


I hav already said in my post - " sorry for posting in wrng section...."

atleast , i am not openly posting/promoting links here or email ids like few other people!

 

[DanPickUp]

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