Option Writing - Derivatives - Indices

[Raj232]

Total premium collected : Rs 230 @ 9:30 AM

Current value of the intraday postion:
31800 CE => Rs 68.25
31400 PE => Rs 75.05
Total premium at square off : Rs 143.30

Net profit : Rs 86+ intraday..

 

[Raj232]

If one had to sell one PE and 1 CE in the morning and just wait... one would make Rs 86+
So 2 lots intraday = Rs 80K margin
Intraday Profit = 86 X 20 = Rs 1.72 K
Return on capital = 2.15% intraday before taxes etc

Only issue that I see with the above is when the market starts moving in 1 direction non-stop.
Where do we place a stop loss or what should be the next leg of the trade ?

 

[manny.here]

If one had to sell one PE and 1 CE in the morning and just wait... one would make Rs 86+
So 2 lots intraday = Rs 80K margin
Intraday Profit = 86 X 20 = Rs 1.72 K
Return on capital = 2.15% intraday before taxes etc

Only issue that I see with the above is when the market starts moving in 1 direction non-stop.
Where do we place a stop loss or what should be the next leg of the trade ?

I could never understand the adjustment part and thats why stay away from option writing.
You can ask Amrutham, sarangsood or Jamit_05 . They are option writer experts here.

 

[soft_trader]

Sold USDINR 69.25PE @ 0.0650 this week expiry.
Reason for taking the trade: USDINR might not breach this level by this expiry.

What a move by USDINR. Need to make adjustments tomorrow.

Adjustments not done today because of lack of liquidity in the contracts of next week expiry. Holding it.

 

[Raj232]

Adjustments not done today because of lack of liquidity in the contracts of next week expiry. Holding it.

lets try to learn related to this .. .

 

[TraderRavi]

Adjustments not done today because of lack of liquidity in the contracts of next week expiry. Holding it.

USDINR made one sided upmove today.

 

[Raj232]

Adjustments not done today because of lack of liquidity in the contracts of next week expiry. Holding it.

@soft_trader, can you explain at what level will you adjust, and/or how you will adjust ?

 

[soft_trader]

lets try to learn related to this .. .

@soft_trader, can you explain at what level will you adjust, and/or how you will adjust ?

I am not good at explaining things so please bear with me.
I don't use much technical analysis or indicators except support/resistance. Every week on Monday I start a position with the intention of closing it at the end of the week.
Some of my rules are:
1. Identify support and resistance zone.
2. Wait to price to move at least 25 paise or more towards the zone on Monday before initiating a position. (though I myself violate this rule out of impatience )
3. Write option contracts at least 30-40 points away. 50 paise away is better.
4. Deploy half the capital at once and rest on the EOD or Tuesday morning.
5. If position goes against you on Monday or Tuesday by a move of ~1% do not panic. Next day square off your position and write options of next week expiry with similar premium but far away strike. This will provide headroom for the market to move.

Feel free to ask and discuss any questions. Seniors are most welcome to share their valuable insights and suggestions in this strategy.

 

[soft_trader]

Sold USDINR 69.25PE @ 0.0650 this week expiry.
Reason for taking the trade: USDINR might not breach this level by this expiry.

squared off at 0.0025

 

[TraderRavi]

squared off at 0.0025

that is 62.50 Rs profit per lot , is it ?