Option Trading journal

[renjith paul]

Hi Friends

This is my 2nd Innings in Share Market.Watched others playing while sitting out.
This time My Prime Target is to be On the Ground with Bat & Pad even if no runs made.

Today I made my first Trades with Net Investment of INR 225000/-
Shorted 4 Lots of May14 Nifty 7100 CE @ 93 and
Shorted 4 Lots of May14 Nifty 6450 PE @ 117

Reviews Expected
Renjith Paul

 

[Somatung]

Hi Friends

This is my 2nd Innings in Share Market.Watched others playing while sitting out.
This time My Prime Target is to be On the Ground with Bat & Pad even if no runs made.

Today I made my first Trades with Net Investment of INR 225000/-
Shorted 4 Lots of May14 Nifty 7100 CE @ 93 and
Shorted 4 Lots of May14 Nifty 6450 PE @ 117

Reviews Expected
Renjith Paul

And now? What kind of reviews do you expect? Every body can do such a trade. The question: Do you have a plan behind it how to manage each one of those legs in the moving market? If so, no review is needed from any body. Take care

 

[TradeOptions]

Hi Friends

This is my 2nd Innings in Share Market.Watched others playing while sitting out.
This time My Prime Target is to be On the Ground with Bat & Pad even if no runs made.

Today I made my first Trades with Net Investment of INR 225000/-
Shorted 4 Lots of May14 Nifty 7100 CE @ 93 and
Shorted 4 Lots of May14 Nifty 6450 PE @ 117

Reviews Expected
Renjith Paul

Renjith, if these are your real trades, then I would say that you are exposing yourself to big risk. You should first try to paper trade PROFITABLY before committing lakhs of real money like that, even if it is your 2nd or 3rd or even 4rth innings.

Regards

 

[trader_ks]

I also agree. In 1st inning you just watched from outside and started 2nd inning with selling naked option. I think leave selling for bigger players and gain expertise in various option strategies for longer survival in market. This is my personal experience that naked ootiin selling will give you lot of mental harashment. May be you will be successful one or two time but at the end it can cause a severe damage.
moreover in free time try to gain experise in greeks if you want to do option trading..

 

[renjith paul]

let me explain the trading Plan behind.
I shorted the 7100 Ce and 6450 Pe as Combined Vega and Theta is very high. So iam expecting benefit from fall in Volatility and Time decay.(at least till May 13th.
This is not a constant strategy till expiration date. So i will be hedging by purchasing futures of equal qty of options that are going beyond my BEP.
If at any point before May 13th if iam so close to 7100 or 6450 i'll be exiting the Option Strategy.

 

[toughard]

let me explain the trading Plan behind.
I shorted the 7100 Ce and 6450 Pe as Combined Vega and Theta is very high. So iam expecting benefit from fall in Volatility and Time decay.(at least till May 13th.
This is not a constant strategy till expiration date. So i will be hedging by purchasing futures of equal qty of options that are going beyond my BEP.
If at any point before May 13th if iam so close to 7100 or 6450 i'll be exiting the Option Strategy.

I am afraid that I have noticed some of practical issues with your trade...
wanted to know your views on those....

your strike selection for shorting is good as both are hiding behind highest OI BUT why 6450?
while exit don't you think you may face some slippage issues?

you said "So iam expecting benefit from fall in Volatility and Time decay"
Fall in volatility just before the event!!! I think contra! Time decay majority of the time if in the middle of the month CAN NOT override volatility with respect to option price.

If you are trying to hedge AT THE TIME of BEP it will be very bad trade.

13th MAY is little balanced point.

Ps- I am NOT a dynamic option strategy expert while these are my observation in general. lets see as time goes.

 

[TradeOptions]

I am afraid that I have noticed some of practical issues with your trade...
wanted to know your views on those....

your strike selection for shorting is good as both are hiding behind highest OI BUT why 6450?
while exit don't you think you may face some slippage issues?

you said "So iam expecting benefit from fall in Volatility and Time decay"
Fall in volatility just before the event!!! I think contra! Time decay majority of the time if in the middle of the month CAN NOT override volatility with respect to option price.

If you are trying to hedge AT THE TIME of BEP it will be very bad trade.

13th MAY is little balanced point.

Ps- I am NOT a dynamic option strategy expert while these are my observation in general. lets see as time goes.

I too have similar views on the observations pointed out by you.
The coming week is not a normal week and there would be huge volatility for sure, so we need to keep that in our minds.

 

[umash2000]

What is the breakeven point for this strategy? If you are fine with that,should be fine.You could also consider adding puts as safeguard with strict stoploss.
Otherwise the strategy resembles mine..and feel is very much in order..:thumb:

 

[Somatung]

let me explain the trading Plan behind.
I shorted the 7100 Ce and 6450 Pe as Combined Vega and Theta is very high. So iam expecting benefit from fall in Volatility and Time decay.(at least till May 13th.
This is not a constant strategy till expiration date. So i will be hedging by purchasing futures of equal qty of options that are going beyond my BEP.
If at any point before May 13th if iam so close to 7100 or 6450 i'll be exiting the Option Strategy.

Now a more expanded plan is needed, as a bad case scenario takes over by higher IV. Hope you got this bad case trading plan, other wise hope and wish may will come into your game and take over. Wish you good luck and wish you that the loss not increases. Take care

 

[Somatung]

Hi Friends

This is my 2nd Innings in Share Market.Watched others playing while sitting out.
This time My Prime Target is to be On the Ground with Bat & Pad even if no runs made.

Today I made my first Trades with Net Investment of INR 225000/-
Shorted 4 Lots of May14 Nifty 7100 CE @ 93 and
Shorted 4 Lots of May14 Nifty 6450 PE @ 117

Reviews Expected
Renjith Paul

Well, that spike up in IV and option IMV a few days back was not a nice event. There was a solution to this, but now it seems it was not needed to go for this solution. It seems now the situation settles down slowly to normal, as even your choosed May strike levels come down in value nicely. Let's see how they do in the next few days.