Modified Strategy to earn 15%-20% a month (Strategy inspired by Linkon7's strategy)

#41
Re: Modified Strategy to earn 15%-20% a month (Strategy inspired by Linkon7's strateg

Sir, pls give an example for the same. Making 6% per month is a lot for many traders here. And it will be helpful with an example trade.

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Sure -

For september write this strangle

Write 9000 CE - CMP 75 (so you will get approx 70-75 premium lets say tomm)
Write 8800 PE - CPM 47 (so you will get approx 40-45 premium lets say tomm)

Combined premium received = 70+40 =110 points
Margin needed to write this strangle = 89,923 (lets say 90,000)

Now how do you manage this trade ?

Rules

1. So long as NF is between 8800 and 9000 you do nothing.
2. If NF goes below 8800 you short one NF
3. If NF goes above 9000 you go long on NF

Lets assume worst case that you actually do need to use this NF trade, then margin requirement is 1,10,078 (lets say 1,11,000).

So on max total margin of 1,11,000 you will stand to make 80-110 points. (110 points if you hold till expiry , I do not recommend that).

Your 6% target is achieved when you get 88-90 points out of the maximum possible 110 points.
 

Karanm

Active Member
#42
Re: Modified Strategy to earn 15%-20% a month (Strategy inspired by Linkon7's strateg

Sure -

For september write this strangle

Write 9000 CE - CMP 75 (so you will get approx 70-75 premium lets say tomm)
Write 8800 PE - CPM 47 (so you will get approx 40-45 premium lets say tomm)

Combined premium received = 70+40 =110 points
Margin needed to write this strangle = 89,923 (lets say 90,000)

Now how do you manage this trade ?

Rules

1. So long as NF is between 8800 and 9000 you do nothing.
2. If NF goes below 8800 you short one NF
3. If NF goes above 9000 you go long on NF

Lets assume worst case that you actually do need to use this NF trade, then margin requirement is 1,10,078 (lets say 1,11,000).

So on max total margin of 1,11,000 you will stand to make 80-110 points. (110 points if you hold till expiry , I do not recommend that).

Your 6% target is achieved when you get 88-90 points out of the maximum possible 110 points.
Sir, you buy NF when it crosses 9000, after 2 hours NF is back to 8970, Trader will loose 30 points + commissions and this can easily happen 3 to 4 times in an Expiry, so how do we get 6% return, kindly explain in detail with example.

Regards
Karanm
 
#43
Re: Modified Strategy to earn 15%-20% a month (Strategy inspired by Linkon7's strateg

Sir, you buy NF when it crosses 9000, after 2 hours NF is back to 8970, Trader will loose 30 points + commissions and this can easily happen 3 to 4 times in an Expiry, so how do we get 6% return, kindly explain in detail with example.

Regards
Karanm
Break-even on NF is generally 1.5 - 2 points. You will have SL that is of 2 points. Management is of-course the name of the game, so if you have the NF jump around 9000 you will end up having to manage it every-time. There is no getting away from that.

I mean come on, you got to do some work to earn the money :) If there existed setups with no work needed and perfect play, won't everyone be making millions :)

So for such strategies , management is key and it has to suit your psychology. It suits mine, I like defending a profit than attacking targets.
 

akza

New Member
#44
Re: Modified Strategy to earn 15%-20% a month (Strategy inspired by Linkon7's strateg

Break-even on NF is generally 1.5 - 2 points. You will have SL that is of 2 points. Management is of-course the name of the game, so if you have the NF jump around 9000 you will end up having to manage it every-time. There is no getting away from that.

I mean come on, you got to do some work to earn the money :) If there existed setups with no work needed and perfect play, won't everyone be making millions :)

So for such strategies , management is key and it has to suit your psychology. It suits mine, I like defending a profit than attacking targets.
bhai how things are going on.....
 
#45
Re: Modified Strategy to earn 15%-20% a month (Strategy inspired by Linkon7's strateg

bhai how things are going on.....
Strategy works fine - as long as one follows the rules. Have made 18% and 15% respectively aug, sep. Oct I've modified to writing a strangle instead of a straddle. Gives almost similar results but with more breathing room
 

akza

New Member
#46
Re: Modified Strategy to earn 15%-20% a month (Strategy inspired by Linkon7's strateg

Strategy works fine - as long as one follows the rules. Have made 18% and 15% respectively aug, sep. Oct I've modified to writing a strangle instead of a straddle. Gives almost similar results but with more breathing room
that's Great, yeah strangle would give more room for adjustments.
Have you traded this strategy with banknifty and especially weekly options.
 
#47
Re: Modified Strategy to earn 15%-20% a month (Strategy inspired by Linkon7's strateg

that's Great, yeah strangle would give more room for adjustments.
Have you traded this strategy with banknifty and especially weekly options.
I did evaluate it, but the liquidity on weekly expiry is low ! I trade multiple lots and hence can't trade BN weekly expiry just yet. Once volumes go up, those would be great opportunities to make 5%-7% each week
 
#48
Re: Modified Strategy to earn 15%-20% a month (Strategy inspired by Linkon7's strateg

Actually I have placed a BN strangle trade today for weekly expiry on 13th Oct 2016. Expected gains are 95 + 91 as shown below.

strangle written 19300 PE + 19500 CE. Premium received 95+91 = 186.

Current margin blocked is 96k, another 35k will be blocked for buying or selling of BN future. So total margin requirement = 96+35 = 136k -> lets say 140k.

returns expected = (95+91)*40 = 7440, lets say 7000.

% returns per week = 7k/140k = 5% = 20% monthly.
 
#49
Re: Modified Strategy to earn 15%-20% a month (Strategy inspired by Linkon7's strateg

I did evaluate it, but the liquidity on weekly expiry is low ! I trade multiple lots and hence can't trade BN weekly expiry just yet. Once volumes go up, those would be great opportunities to make 5%-7% each week
Liquidity is good enough. I sell every week, as per my outlook.
 

akza

New Member
#50
Re: Modified Strategy to earn 15%-20% a month (Strategy inspired by Linkon7's strateg

Actually I have placed a BN strangle trade today for weekly expiry on 13th Oct 2016. Expected gains are 95 + 91 as shown below.

strangle written 19300 PE + 19500 CE. Premium received 95+91 = 186.

Current margin blocked is 96k, another 35k will be blocked for buying or selling of BN future. So total margin requirement = 96+35 = 136k -> lets say 140k.

returns expected = (95+91)*40 = 7440, lets say 7000.

% returns per week = 7k/140k = 5% = 20% monthly.
bhai could you please name the broker who facilitate F&O trades in the margin you mentioned, if naming is not allowed then please msg me
 

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