Option Writing - Derivatives - Indices

Raj232

Well-Known Member
#1
Starting a new thread, for those interested in option writing. Buying options always has the risk of sideways movement which makes the option lose value. Writing options involves higher margin but can be 'low or medium' level of risk as compared to buying options.

Discussing ways and refining techniques to improve the skill of writing options for a steady flow of income with low or moderate risk.

All are invited to participate and share views and experiences !
 

Raj232

Well-Known Member
#4
Thanks for starting the thread. I write options but in currency segment. May I post here?
Hey Soft_trader, thanks for starting to post already. Please feel free to post for currencies as well.
In fact currency margins a low and volatility is low too :)
 

afin

Rocky Mountain Doomsday Guy
#5
Starting a new thread, for those interested in option writing. Buying options always has the risk of sideways movement which makes the option lose value. Writing options involves higher margin but can be 'low or medium' level of risk as compared to buying options.

Discussing ways and refining techniques to improve the skill of writing options for a steady flow of income with low or moderate risk.

All are invited to participate and share views and experiences !
Great to see the thread Raj bhai! I hope to learn about options writing too :) It is something I have considered to do but not instantaneously
 

against_tides

Well-Known Member
#6
Please correct me if I am wrong.

Option vales are based on Theta ...vega.gama.delta..but most volatile is IV and hence vega is most crutial..However there is no direct link to option price with these values in short(intraday) term..

While placing an sell order...sl trigger order should be market and never limit...as the volatility is very high..
 

Raj232

Well-Known Member
#8
For todays intraday trade... Sell BNF 31800 CE (Rs 161) and 31200 PE (Rs 145 ) .. [@ 11:50 am] .. woke up late today !!!
for a total credit of 306 receivable.. .. hold till End-of-Day !!
The rates posted above were incorrect.. BNF 31800 PE was approx 165 at the time.

EOD story: 31800 CE = Rs 84 ; 31200 PE = 208 Total: 292 ... still in profit .. of Rs 14 (actually add another 15 due to delayed quotes) ..
...so Rs 29 profit intraday :)

It would have been more, if the VIX had not jumped up +3% :)
 

Raj232

Well-Known Member
#10
When selling strangles, do you always maintain Delta neutral by adjusting strangles ?
Currently, only exploring the opportunity, however, re-adjusting the delta would be necessary but I feel it should be done only once a threshold is crossed. So for example if there is a move of 150 - 200 points in Banknifty it is necessary to re-adjust. However, looking for the best threshold, so that it could be put into an excel formula..
 

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