Nifty experts advice to Newcomers

#1
hi all,
i am new to this community and options trading.
i am starting this threads for getting info and advice from senior or expert traders to new guys.../

i am new and stilling learning more for my first trade.
i have been paper trading for 4weeks now... still counting ..

i will share my view and idea of my trade..
anyone can give your feedback and suggestion..

firstly i have "adityabirlamoney" trading come demat account opened around 2015.
i deployed 1L capital in cash market and lost it completly within 1-2years with help of broker calls for few months
and then by myself(friends idea) too...

from 2017 to 2020 i am out market like regular investor who lost faith in market and
then comes the second wave of market this time with some skill..

i am planning to trade in options alone.
capital 2-3L
broker-zerodha orbis
sell both CE and PE for ard 5-6rs premium (far OTM)on weekly basis..
plan to hold loss:
if my preminum double or triple before expire , then book the loss..
again sell (loss preminum)/2(far far OTM) ..

thankyou for your time.../
 

Verde

Well-Known Member
#3
Selling options for 6 bucks is a 95% winning bet, but the day it doesn't work, all those profits and much more will be given back.

It takes only one big hit to wipe out your capital. The same 1000 you made last week can be done with much less risk.
Cut the risk and live to fight another day.
 
#4
A safe route would be to wait for the days when the index looks like trending on your indicator(s) and then enter the trade. Often waiting is the worst part.
 
#5
Selling options for 6 bucks is a 95% winning bet, but the day it doesn't work, all those profits and much more will be given back.

It takes only one big hit to wipe out your capital. The same 1000 you made last week can be done with much less risk.
Cut the risk and live to fight another day.
thankyou for your reply..
if my 6rs premium change to 20rs,
then i will buy it for 20rs, where my loss will be 20-6=14rs,
then i will sell 20/2= 10rs premium 2 lots-
then 20-14= 6rs profit... right..

is there any problem in this ..../

as you said it will happen 1 in 10 times right.../
 
#6
A safe route would be to wait for the days when the index looks like trending on your indicator(s) and then enter the trade. Often waiting is the worst part.

i do know indicators and all..

so only i am blindly selling 6rs premium.../

is above reply will help me in loss or still it wipe my capital ah ?/
 
#7
i do know indicators and all..

so only i am blindly selling 6rs premium.../

is above reply will help me in loss or still it wipe my capital ah ?/
Market positions need active management. Doing anything blindly is likely to lead to a wipeout.
 

Verde

Well-Known Member
#8
thankyou for your reply..
if my 6rs premium change to 20rs,
then i will buy it for 20rs, where my loss will be 20-6=14rs,
then i will sell 20/2= 10rs premium 2 lots-
then 20-14= 6rs profit... right..

is there any problem in this ..../

as you said it will happen 1 in 10 times right.../
The biggest lesson in the market is to limit risk. You cannot afford to take even one big hit.

These options you are selling for 5-6 rupees are bought by the lottery ticket buyers who are hoping for a big move or others who are hedging their sold options.
Very far OTM options have high IV, so a 200-300 point gap will increase the price by a good amount.
It is called picking up pennies in front of a steamroller.
Don't do it.

If you are so interested in selling options do a credit spread or a calendar spread where the risk is limited.
Even better read about options on the Net
https://www.netpicks.com/trade-call-credit-spreads/
 
#9
If you are so interested in selling options do a credit spread or a calendar spread where the risk is limited.
Even better read about options on the Net
https://www.netpicks.com/trade-call-credit-spreads/
Yeah, calendar spread. Buy current series and sell the next series.

Try it with the currency futures (maybe currency options but I have no experience with those). You will risk small amounts and learn.

Share your lessons with us.
 

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