Hi,
I Have put my entire capital into this strangle.
After waiting for 10 days, Today Nifty touched 2850 levels.
Today I have sold 50% of my positions as follows:
NIFTY 27 Nov CE 3100 bought @ Rs.172 sold @ Rs.58.5
NIFTY 27 Nov PE 2900 bought @ Rs.154 sold @ Rs.177
as you can see , I have incurred 27% loss. But i have reduced my exposure by half.
Still holding on to other 50% of my position.
for my position to escape from loss the remaining half should produce 54% profit.
will it ever happen ?
DO YOU FEEL WHAT I HAVE DONE IS CORRECT ?
HERE IS HOW I STARTED THE TRADE :
On 3rd November 2008, I entered a Nifty strangle by buying an OTM PUT & OTM CALL.
Here is the trade:
NIFTY 27 Nov CE 3100 bought @ Rs.172
NIFTY 27 Nov PE 2900 bought @ Rs.154
Nifty was trading at 3000 Levels when I entered the strangle.
On 7th Nov, After 5 sessions NIFTY is again trading at 3000 levels only.
Now,
CE 3100 is trading @ Rs.145
PE 2900 is trading @ Rs.142
as you can see, both the options have depreciated in value.
I am experiencing 12% loss in the overall trade as on 7th November.
Thankyou,
warm regards,
VIJAY
I Have put my entire capital into this strangle.
After waiting for 10 days, Today Nifty touched 2850 levels.
Today I have sold 50% of my positions as follows:
NIFTY 27 Nov CE 3100 bought @ Rs.172 sold @ Rs.58.5
NIFTY 27 Nov PE 2900 bought @ Rs.154 sold @ Rs.177
as you can see , I have incurred 27% loss. But i have reduced my exposure by half.
Still holding on to other 50% of my position.
for my position to escape from loss the remaining half should produce 54% profit.
will it ever happen ?
DO YOU FEEL WHAT I HAVE DONE IS CORRECT ?
HERE IS HOW I STARTED THE TRADE :
On 3rd November 2008, I entered a Nifty strangle by buying an OTM PUT & OTM CALL.
Here is the trade:
NIFTY 27 Nov CE 3100 bought @ Rs.172
NIFTY 27 Nov PE 2900 bought @ Rs.154
Nifty was trading at 3000 Levels when I entered the strangle.
On 7th Nov, After 5 sessions NIFTY is again trading at 3000 levels only.
Now,
CE 3100 is trading @ Rs.145
PE 2900 is trading @ Rs.142
as you can see, both the options have depreciated in value.
I am experiencing 12% loss in the overall trade as on 7th November.
Thankyou,
warm regards,
VIJAY
Also define the maximum risk that you will take on that position.. (say 2% of acct size).
First rule of trading is to SURVIVE. Second rule - Manage your Loss.. Consistent PROFIT comes lot later.. You got to be in the game long enough to see the profit..
Understand the animal (option strategy) that u are playing with..
All the best.