Option Selling during quarterly results

[sanju005ind]

Now there is a general consensus that some full time losers are not able to digest that few part time traders are profitable.

 

[Schatz]

Not only you, many people have the same questions. Option selling may have 70-80% success rate.However the other 20-30% events has the potential of causing damage to all the profits. Still that can be handled in the following ways.

1. Do not attempt option selling without sufficient capital.
2. Once a position is created one needs to keep almost similar amount of capital in reserve for adjustments. so that one may come out with minimum loss or profit.
3. Beginners should not attempt stock options because stocks can move wildly.Stick to index options. since index does not move like 8-10% on a regular basis and they have less circuit filters.
4. Whenever an option position moves wildly like 2 or 3 stdev. We need to stay calm since it will revert to mean.(Having enough capital also helps in remaining calm).

Now let me show you the Infy position which i always enter in the simulation the moment i take a position.Hence these are not in hindsight. Of course i did not bother to add the adjustment trades like i sold 900puts and then later sold 920,940 call options to minimize the damage. I can only show the straddle which i had taken right before the earnings release(Check the date time stamp at the bottom.). At one point the position was showing a loss of 80k.Look at it now.
View attachment 43507

Not sure what is the point here. Holding infy for mean reversion is not a great idea. What if it does not. You are ready to be wiped out? Since its not even hedged I don't think it's right approach.

 

[sanju005ind]

Not sure what is the point here. Holding infy for mean reversion is not a great idea. What if it does not. You are ready to be wiped out? Since its not even hedged I don't think it's right approach.

Arre baba i told i closed the position with loss and covered some ground by selling call options. I have posted the above screenshot for reference.

 

[Schatz]

Arre baba i told i closed the position with loss and covered some ground by selling call options. I have posted the above screenshot for reference.

OK. Selling call options is like increasing your neg deltas in an already difficult situation. If anything at all one would sell put yo reduce neg deltas.

 

[sanju005ind]

OK. Selling call options is like increasing your neg deltas in an already difficult situation. If anything at all one would sell put yo reduce neg deltas.

Yes much firefighting happened like selling 900PE and then selling 9020ce,900ce and 940ce.becuse later the whole day it moved down also bringing the volatility down.

 

[sanju005ind]

I had not taken HDFCBank trade because I have two open positions for BajajFinance in two different accounts. They both are hedged on the opposite sides and cannot be taken in a single account. Let me post the open positions and the payoff charts.

Position 1. No upside risk only downside risk. This position is intended to carry till expiration. In between on 21st Jul we also have results.
View attachment 43510

 

[sanju005ind]

The second position on the Bajfin has no down side risk. But upside risk and will creates loss if closed beyond 3725 and maximum profit if closes near 3500 on expiry.
View attachment 43511

Closed both positions.

 

[travi]

Super trade

 

[raj1688]

Hi all. Hope you people are going strong in tough times.

I am a passive reader here. Don't participate often for various reasons.
But I am here to comment now in context of some conversations above.

Those who are sharing meaningful stuff like this, please continue to do so. As Sanju sir above said, it will be helpful to someone. Maybe in some way that is hard to predict in our narrow world view as of now. Maybe not now, maybe 5 years later someone will learn something from this thread.

And if not, what has anyone else got to lose if someone willing wants to share. All you have to do is ignore and go smoke a J. I don't understand the compulsion to complain about stuff you can simply ignore in the first place. It's not like Traderji is so full of bullshit that you are on a crusade to clean up the place. No sir, it is doing just fine even if its a bit messy. It is supposed to be this way.
So what is if is a indeed duplicate idea. What if the poster comes across as a show off (in your opinion). As long as there is no intentional malaise, leave it be. Please don't discourage people who are active for some silly reasons you cook up in your head. You do not have the right to be blunt. No offense.

And finally thanks for all l the active members in this forum are doing this for so long. Remember that for every single reply or like that you can see, there are ten times more people actually benefitting from your content, now or in the future, directly and indirectly. And the credit is yours, even if you will never know of it.

Cheers. Good day.

 

[thimma]

Hello Sanju,

I do similar type of trading for the past few years. I sell OTM Put and OTM Call about 7-10 % away from the current price of the result day. Cover both of them just few hours of the result or the next day when the result is after hours. For a capital of 3-4 lakhs we can get 2-10 thousand per trade most of the time. However when the stock swings more than 5% we will be in trouble. That's where you do adjustments. Keep this thread going. I would like to share some of my trades and experiences soon.

Thanks
Thimma.