Which Strategy you mostly use?


  • Total voters
    26

coolbull

Active Member
#1
HI!

This thread is Purely Based on Options(NIfty). No future Hedge.

Call and put sell /Buy or both.

Simple pairs based on Intraday trend and monthly complex option Strategies based on market view.


I most of the time go for neutral strategies. Even if i am biased towards bullish or bearish....I start off the trade as a a neutral strategy and then as per market trend i change it to bullish spread or bearish spread.



** Earlier it was not possible for all to open strategies bcoz of heavy brokerage, Now with the Advent of Advance technology and discount brokerage it is possible to open any kind of strategy, monitor online and change strategy accordingly on time.


few types and examples of strategies

Short Straddle : sell both ATM CE/ PE eg. sell 7700 ce - 7700pe
Short Strangle : sell both OTM PE / CE eg. sell 8000ce - 7400 pe

*** For long : Buy both ce /pe

Butterfly Spreads : Buy OTM CE(1 lot)+ Sell ATM CE(2 lot) +Buy ITM CE (1 lot)
ex : (1 lot) Buy 7900 ce + (2lot) Sell 7800 ce + 1 lot Buy 7700 ce

-------------- for Puts Butterfly spreads - use same strategy instead of calls use puts --------


Calender Spreads : straddle

sell near term(current month ATM call /put pair) + Buy Far month ( ATM call /put pair)

ex sell Aug 7800ce/7800pe + Buy Sep 7800ce /7800 pe

Note : sudden Breakout on any direction can cause loss, additional buy sell of call put recquired.


IRON Butterfly Spreads : used with a view of Narrow range of Expiry (Neutral strategy)

Buy OTM Put + Sell Atm Put + Sell Atm Call + Buy OTm Call
( its a Credit strategy as premium spend is less than premium Earned)

** By sell/Buy of pair if u receive more premium then it is credit spread , if u pay more than the premium received its a Debit spread


** I am experienced equity trader...used to trade Naked futures and option successful at first then you all know what happened Next hence started Nifty hedges and option spreads.
** Inspired by Traders like Aw10,Linkon,entire traderji forum and many more legends like Elder Alexander, Al brooks to name a few...
** Goal of this thread is to minimize risk (loss) and maximize profit in all market conditions **
** Suggestion Are Welcome, New innovative ideas to lower the cost of trade,losses and improving profits are welcome **
** Hope all the Option legendary traders would guide and leave positive criticism along with pointers for the further improvement in strategies ***
 
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coolbull

Active Member
#3
I have Tried successfully straddles, strangles both debit and credit.... was more successful in credit spreads......Successfully traded calender spreads but never kept till expiry( kept till 20- 40 pts prf)
 

gmt900

Well-Known Member
#4
Right now I am trying to study the margin requirements for these strategies.

Unfortunately, most of the managers at brokerages are not knowledgeable about this subject.

For example, if one gets into calendar call/put or double calendar strategy, as long as one does not square off any leg, there is no need to keep any margin since the risk to both the trader as well as broker is nil.

Another issue is about exposure margin. Say, if for selling one lot nifty option, SPAN margin is 30,000 and exposure margin is 20,000, can the broker at his descretion waive exposure margin? Is it necessary to have securities in your Dmat account so that after hair cut broker has enough securities to enable him waive exposure margin?

I feel, if one wants to regularly trade in these strategies, margin requirements
is a very important part to reduce overall cost of the trade.
 

coolbull

Active Member
#5
can anybody please tell me.....How to edit Vote options.....on this voting poll...?
 

coolbull

Active Member
#6
Right now I am trying to study the margin requirements for these strategies.

Unfortunately, most of the managers at brokerages are not knowledgeable about this subject.

For example, if one gets into calendar call/put or double calendar strategy, as long as one does not square off any leg, there is no need to keep any margin since the risk to both the trader as well as broker is nil.

Another issue is about exposure margin. Say, if for selling one lot nifty option, SPAN margin is 30,000 and exposure margin is 20,000, can the broker at his descretion waive exposure margin? Is it necessary to have securities in your Dmat account so that after hair cut broker has enough securities to enable him waive exposure margin?

I feel, if one wants to regularly trade in these strategies, margin requirements
is a very important part to reduce overall cost of the trade.
I wont to able to comment much on this as i trade for some other person but i never suggest to use equity pledge, its not advisable. One wrong move can wipe out your equity holdings....The account is highly funded, i generally prefer 4-5 lakh for one 4 leg spread to be on safer side. Although once all the legs are established margin will not be more than 50-60 thousand for entire trade, just check with broker.(many brokers offer many possible solution based on your trading turnover)

This strategies was not fruitfull earlier coz of heavy brokerages on options. Now you have many brokers who offer monthly quaterly brokerage one time( if u trade actively go for such brokers)

I like to keep more funds coz of hedge i generally use futures(intraday).

** please use good trading software **
 

coolbull

Active Member
#7
---------- Open trade for this month is on 11-12 aug--------

calender Spread
: sold Aug 7700 ce/pe pair / Bought Sep 7700 ce/pe Pair


Sell Aug 7700ce @57.65 sold Aug 7700 Pe @ 116.3
Buy Sep 7700 [email protected] B Sep 7700 pe @ 152.85

@ present 22.05 .... This is a neutral Debit Spread
 

comm4300

Well-Known Member
#8
---------- Open trade for this month is on 11-12 aug--------

calender Spread
: sold Aug 7700 ce/pe pair / Bought Sep 7700 ce/pe Pair


Sell Aug 7700ce @57.65 sold Aug 7700 Pe @ 116.3
Buy Sep 7700 [email protected] B Sep 7700 pe @ 152.85

@ present 22.05 .... This is a neutral Debit Spread
thank you coolbull for this initiative.

few questions:
when does this strategy make money - range, range breakout or volatility spike?
with hardly 8 days left for the Aug expiry,could this have been moved to sep/oct?
was low volatility one of the reasons for entering debit spread ?
 

coolbull

Active Member
#9
@comm4300

Huge volatility or Breakouts hurts this strategy but minor breakouts or volatility doesn't hurt...it works good in stagnant market( n this case time decay is the Key)..

I personally like calender strangles (otms), in this case i was expecting market to run up a bit but was equally afraid hence did short straddle then bought straddle of next month now it is calender straddle. I had bought futures as well but for this thread i wont use futures....only options as it attracts less brokerage compared to futures.... i even use Banknifty Futures as hedge..

I take my trade as combination of multiple pairs. Sometimes i sell pairs for intraday and keep my neutral strategy pairs for some time.At this moment I also have iron Condor and Iron Butterfly spread Active since some time both are in profit...Both are Credit Spreads

Any strategy which involves writing of call or put profits more in stagnant market as it allows us to eat premiums at the same time volatility hurts but when we buy strangles or straddles of same or other month bought pair earns....

If we want to keep both pair, short pair is earning and long pair is also earning then no issues else we can hedge it with futures.....

I do scalping with pairs as well.....

Such spreads needs additional leggings most of the time...loss is limited and can be transformed to any other strategy based on market conditions....sometimes expiry week is stagnant helps u earn more as one leg expires worthless....

I would move to sep- oct series on mid of this week.... my goes was one entire premium of put leg (within range) or 20,30,40 points ....Hope i was able to answer a bit......hope seniors and other legendary traders would give some input.

Thanks
 

gmt900

Well-Known Member
#10
@comm4300

Huge volatility or Breakouts hurts this strategy but minor breakouts or volatility doesn't hurt...it works good in stagnant market( n this case time decay is the Key)..

I personally like calender strangles (otms), in this case i was expecting market to run up a bit but was equally afraid hence did short straddle then bought straddle of next month now it is calender straddle. I had bought futures as well but for this thread i wont use futures....only options as it attracts less brokerage compared to futures.... i even use Banknifty Futures as hedge..

I take my trade as combination of multiple pairs. Sometimes i sell pairs for intraday and keep my neutral strategy pairs for some time.At this moment I also have iron Condor and Iron Butterfly spread Active since some time both are in profit...Both are Credit Spreads

Any strategy which involves writing of call or put profits more in stagnant market as it allows us to eat premiums at the same time volatility hurts but when we buy strangles or straddles of same or other month bought pair earns....
If we want to keep both pair, short pair is earning and long pair is also earning then no issues else we can hedge it with futures.....

I do scalping with pairs as well.....

Such spreads needs additional leggings most of the time...loss is limited and can be transformed to any other strategy based on market conditions....sometimes expiry week is stagnant helps u earn more as one leg expires worthless....

I would move to sep- oct series on mid of this week.... my goes was one entire premium of put leg (within range) or 20,30,40 points ....Hope i was able to answer a bit......hope seniors and other legendary traders would give some input.

Thanks
Currently, nifty VIX is at multiyear low levels. Since we are buying as well as selling options, increase in volatility will not affect the position adversely.

Is that right?
 
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