Option Selling during quarterly results

#61
Indeed, if there is a simpler way to avoid the black swans (instead of "adjustments") , even at lower profitability, it should be a worthwhile exploration.. Something like a rule based system..
 

sanju005ind

Investor, Option Writer
#62
Indeed, if there is a simpler way to avoid the black swans (instead of "adjustments") , even at lower profitability, it should be a worthwhile exploration.. Something like a rule-based system..
Rules cannot avoid Black Swans. The best way to avoid black swans is to not trade at all. Trader should have rules as to how to tackle a Black Swan event.
First of selling option requires good capital. Not every trade requires adjustments. Black swan is not a daily occurrence. Yes adjustments are required either to limit the loss or to come out with marginal profits. which other instrument has the opportunity of limiting the loss AFTER a blackswan event has occurred,

1. The simpler way is to always have a hedged position.
2. Even then something will go wrong then have reserve firepower to limit the loss.
 

sanju005ind

Investor, Option Writer
#64
Was teaching my my elder daughter about options and then when I mentioned that 70-80% options expire worthless. Then she told why dont we sell the entire option chain. I said ok "may be not the entire option chain as I am not ambani .But we will sell the bulk of it in the middle and since it is your Idea and on 10th being the weekly expiry and 19th Birthday. I will give all the profits of this trade to you. Here is the result when I sold the options in Friday. Though this method may not be efficient use of capital. But 5% of return on Capital in 5 days is not bad.



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travi

Well-Known Member
#65
Was teaching my my elder daughter about options and then when I mentioned that 70-80% options expire worthless. Then she told why dont we sell the entire option chain. I said ok "may be not the entire option chain as I am not ambani .But we will sell the bulk of it in the middle and since it is your Idea and on 10th being the weekly expiry and 19th Birthday. I will give all the profits of this trade to you. Here is the result when I sold the options in Friday. Though this method may not be efficient use of capital. But 5% of return on Capital in 5 days is not bad.



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Subhadip Da used to (maybe now as well) put on these type of Strangles on NS over 3 strikes :D
 

niftytaurus

Well-Known Member
#66
Was teaching my my elder daughter about options and then when I mentioned that 70-80% options expire worthless. Then she told why dont we sell the entire option chain. I said ok "may be not the entire option chain as I am not ambani .But we will sell the bulk of it in the middle and since it is your Idea and on 10th being the weekly expiry and 19th Birthday. I will give all the profits of this trade to you. Here is the result when I sold the options in Friday. Though this method may not be efficient use of capital. But 5% of return on Capital in 5 days is not bad.



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Congratulations Sanju Bro & your daughter also for brilliant trade.
She must be happy.She has got a very good profit as a Gift on her Birthday! May God bless her always & May she get a very happy & very successful life.
Keep Profiting:)
 

travi

Well-Known Member
#70
no parts . entry exit all at once. so that i dont have to watch the charts the whole day. Well that's the point of getting into trading business is it not.:)
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for some butterfly and calendar spreads, i'm timing the quick moves. Small drops in NS are quick, so enter the short legs and 20-50pts later the buy legs.
the trade becomes slightly profitable for all spot prices and then if expiry is within the range u get the max out of it.

Doesnt happen all the time :) but on a large number of trades it worked better.