Options strat Trading diary -

[kingkrunal]

Tata motors.. still running up. .. I may need another adjustment

 

[kingkrunal]

Tata motors.. still running up. .. I may need another adjustment

And closed 185ce 3 lots at 5.7
Sold 190ce 5 lots at 3.65

 

[kingkrunal]

And closed 185ce 3 lots at 5.7
Sold 190ce 5 lots at 3.65

Now above 50 ema too.. and still running up... May need another adjustment if it closes above 187..
@Loss_Lover any suggestions in this kind of scenario..
Can we close the bull call spread and create a new one near the price?
Thanks

 

[SarangSood]

Now above 50 ema too.. and still running up... May need another adjustment if it closes above 187..
@Loss_Lover any suggestions in this kind of scenario..
Can we close the bull call spread and create a new one near the price?
Thanks

Hey @kingkrunal. It's a very risky position now. The 170-175 bull spread will not give much if tm moves upwards and you have 5 naked cals. It can be very very dangerous.

If you still want to hold, at least you should exit from 170-175 and come to 180-185. Still after doing this 5 lots of 190 ce is too much.
The risk is much greater now than the original position when initiated. You should try to come back to it again.

180ce buy *1
185ce sell *1
190ce sell *3

 

[kingkrunal]

Ok cool.. I was planning to do so with bull call spread..
Will open a strAngle too ...to cash in a bit more..

What else we can do in this ? I know I am in chasing mode right now .. can put a sensible stop and move to another trade

Hey @kingkrunal. It's a very risky position now. The 170-175 bull spread will not give much if tm moves upwards and you have 5 naked cals. It can be very very dangerous.

If you still want to hold, at least you should exit from 170-175 and come to 180-185. Still after doing this 5 lots of 190 ce is too much.
The risk is much greater now than the original position when initiated. You should try to come back to it again.

180ce buy *1
185ce sell *1
190ce sell *3

 

[SarangSood]

Ok cool.. I was planning to do so with bull call spread..
Will open a strAngle too ...to cash in a bit more..

What else we can do in this ? I know I am in chasing mode right now .. can put a sensible stop and move to another trade

I would recommend you to calculate your delta through greeks and then neutral it. According to greeks, your position is round about 1.5 tm futures sold. So if tm increases you would incur a loss equal to 1.5 futures.

The strategy when initiated was fine but it needs continuous monitoring of delta on the upside because it is biased for downward movement or nowhere or very limited upward movement.

I personally am an index writer, specially bnf. The problem with stock options is that because of low liquidity, the slippage cost of getting in and out of a position is very high.

 

[SarangSood]

[quote uid=213087 name="kingkrunal" post=1333648]thanks for sharing this.. and was trying to get this straight with a small example :

TATA motors: CMP:171.40 - Jan expiry
1- buy 170 ce- 9.8 and sell 175 ce - 7.45
2 - sell 2 lots of 185ce at 4..05
credit 7.45+4.05+4.05-9.8 = 5.75

scenarios:
1 - price between 175 to 185 do nothing
2- price below 175 or 170 - do nothing
3- if price increases above 185 by 1-2%.. lets say at 187 .. close the 185 ce sold and sell 4 lots of 190 call
4 -repeat step 3 if it increase more

Am i correct in above example ? or something i missed ?

thanks[/QUOTE]

Scenario number 1
1 - price between 175 to 185 do nothing.

The action you are taking if market reaches 185 is very late. You should shift to 190 at around 182. Shifting that late can result in more loss booking in 185ce because as an option reaches near ATM it's delta increases more rapidly.

A lot of people write options with a view or scenario to expire there position. It is also important to be in profit or neutral to reach till expiry.

I tried explaining this in the other thread as well.

 

[kingkrunal]

I would recommend you to calculate your delta through greeks and then neutral it. According to greeks, your position is round about 1.5 tm futures sold. So if tm increases you would incur a loss equal to 1.5 futures.

The strategy when initiated was fine but it needs continuous monitoring of delta on the upside because it is biased for downward movement or nowhere or very limited upward movement.

I personally am an index writer, specially bnf. The problem with stock options is that because of low liquidity, the slippage cost of getting in and out of a position is very high.

Yup doing that in the same way as mentioned by you in another thread I covered the position before the calls went itm...
Is there any tool you recommend for calculating delta neutral thingy ?
I do use optiontracker but it is a bit old ..

 

[SarangSood]

Yup doing that in the same way as mentioned by you in another thread I covered the position before the calls went itm...
Is there any tool you recommend for calculating delta neutral thingy ?
I do use optiontracker but it is a bit old ..

I get live feed in excel so i calculate through it only. I monitor my delta and gamma very closely as bnf or even NF can be very volatile. Sometimes i have to adjust every 30 seconds like today as it was expiry in bnf.

 

[kingkrunal]

I get live feed in excel so i calculate through it only. I monitor my delta and gamma very closely as bnf or even NF can be very volatile. Sometimes i have to adjust every 30 seconds like today as it was expiry in bnf.

Pls point me if that excel is available anywhere around here...