Options strat Trading diary -

[kingkrunal]

Please read my previous posts on this with an open, calm, clear mind, I have tried my best, explaining all that I do. BTW you cannot put stop-loss on synthetic option strategies - that will be a live invitation for a disaster because Option prices can move drastically on any direction on slightest of Volatility upbeat - there is no way to measure or forecast it beforehand. So, as a protection on synthetic option strategies, "adjustments" are made which I have already explained in details. Touch wood, I am using this options strategy for past 21 months - not a single loss and 68% up on total capital.

Are you kidding??? Check Oct'18 (not even six months back) - it fell about 25% in 2 days and recovered most of it by month's end - that makes this stock very volatile. We want to target down-trending stocks but not the volatile ones. I have also shared a list of shares which I trade cyclically and it works like a charm.

Greed will always make your position suffer in the long run. There is no room for emotion in this. Only calm, composed well thought pre-planned, clean execution will help your capital grow - nothing else! Idea is to enjoy time decay as expiry approaches by selling strong resistances. In case of IOC, you have violated many rules of this technique.

As Option writers we cannot push the far OTM every time a stock makes a low. If we do that, then the market will easily trap us - we do not want to get trapped, so, we need to always account the fact that the Stock can always bounce back to claim the previous resistance at any given point of time. The motive to increase profitability can successfully be achieved when stock price falls significantly, i.e. in terms of Price action makes a new Swing Lower High.

If this happens:
View attachment 33538
Then please do not do these immediately:
View attachment 33542 or View attachment 33543

because stock has just corrected and trying to find a support, we cannot know beforehand that where a support will be bought and where the next resistance will be. Primarily, our goal is to avoid this:
View attachment 33545
Do you get my point? Had you stayed on the previous far OTM instead of moving downward immediately, you could have now easily moved upward to the very next strike or where the next highest OTM Call OI exists (with less multiple of lots). Like this:
View attachment 33547
OR
View attachment 33548
Monitoring a position in order to safeguard or enhance is one type of mindset but doing "kirkiri" everyday out of emotional euphoria or despair is unacceptable. In case of IOC, you have not mentioned the dates on which you have made the adjustments so as to see what compelled (in terms of price action and moving averages) to deviate from the rules (BTW are you maintaining a spreadsheet registering all your trade dates, net credit/debit, etc...????). My assumption on your IOC mess is that in the desire to increase profits, you dug a pit for this position. You need to have a strong rationale behind taking or adjusting a position.

Also never adjust the initially taken Just ITM / Just OTM Call option pair - it is the heart line which will protect your position in all circumstances.

Hope this helps !!!

Thanks for the detailed info. I can list down my mistakes now:

1. just saw the last quarter and can see i didn't count the downfall % , just upward movement
2. I opened this trades on last Thursday.
So should have gone for next expiry. But I assume that could have ended in same .. I will analyse that.
3. The rationale behind this was - the range bound nature since last 2 months. With the support at 135 and resistance at 120.
4. The adjustment started on Friday itself as the stock moved around 7 percent on that single day. Still not sure where the hell was any news.
5. Plus trade execution mistake which left the whole after the above trade on Friday. I have not shown that in the digram as was trying to find the rules across.
6. IOC massive movements I ignored as I wanted to do get something quick with one week to expiry . Greed


I admit this mess happened as I selected a completely wrong stock and many mistakes from my end .. but ioc is on bull run since lastI4-5 sessions and not a single down day .have you faced anything like 4 adjustments in 5 days ?

Thanks for the details again and yes I do manage excel with price trades credit debit.

Now back to drawing board and I am missing the preparation stuff.
I traded infy and TATAMOTORS before this
So all in all I have to improve my stock selection massively.
.

 

[Loss_Lover]

resistance at 135.

So when price entered 1% below 135 i.e. near about 133.50 we should have moved the Far OTM strike to 145 i.e. 10% or to the next "strong resistance". The logic is, if price is going up and approaching 135, do you think 137.50 will hold as resistance? You will unnecessarily be forced to adjust again and again.

have you faced anything like 4 adjustments in 5 days

No! Max I have done is 6 adjustments in a span of 3 weeks in BHARTIARTL during Jul'18-Aug'18 and came out profitable with the initial credit. If you are doing so many adjustments in matter of days it shows that, you are chasing the market and getting trapped.

I ignored as I wanted to do get something quick with one week to expiry . Greed

Thank you for reminding! Please fit this statement in your subconscious and never repeat it. Those who fight the market cannot make money consistently but those who escape loss using disciplined strategies will always "win" on a net-net basis. Making 2%-4% out of the market on a monthly basis can be easily achieved with this method and I simply love this.

Now back to drawing board and I am missing the preparation stuff.

Losses (mistakes) will make you more stronger. All the very best !!!

 

[kingkrunal]

So when price entered 1% below 135 i.e. near about 133.50 we should have moved the Far OTM strike to 145 i.e. 10% or to the next "strong resistance". The logic is, if price is going up and approaching 135, do you think 137.50 will hold as resistance? You will unnecessarily be forced to adjust again and again.

No! Max I have done is 6 adjustments in a span of 3 weeks in BHARTIARTL during Jul'18-Aug'18 and came out profitable with the initial credit. If you are doing so many adjustments in matter of days it shows that, you are chasing the market and getting trapped.

Thank you for reminding! Please fit this statement in your subconscious and never repeat it. Those who fight the market cannot make money consistently but those who escape loss using disciplined strategies will always "win" on a net-net basis. Making 2%-4% out of the market on a monthly basis can be easily achieved with this method and I simply love this.

Losses (mistakes) will make you more stronger. All the very best !!!

Thanks for the response.. the main thing which i am missing is discipline... been trying it since long and trying not to deviate from the plan.

So as in the first point as i read the original rules -- the ar OTM strike has to be 10% away from CMP
in this one - when CMP was 129 the far otm i chose was 135 (which is not 10%) is should have gone with 137.5
the adjustment also should have been as 145 rather then 137.5 or 140 after that .. On to my trading diary..

Bhartiairtel - 6 adjustments in 3 weeks must be not gone to 11 lots like this .. as the decay would have helped to reduce number of lots. thats still quite an adjustment.

the above diagrams are really helpful the above diagram.. generally i have not adjusted in infy when it went below the bought call price - i just closed the trade to not give into greed.. but the itch killed me with IOC..

Have to find another stock from the below list as your suggested and sticking to it

BHARTIARTL WIPRO TATASTEEL TATAMOTORS RELINFRA RELCAPITAL ONGC VEDL MARUTI ITC HCLTECH DLF COALINDIA CIPLA BHEL

any addition to it or removal..
i think tatamotors can be removed as it fell 30% this month and again rose back in a months time

 

[kingkrunal]

hi , @Loss_Lover

while you are here .. i have one question regarding the parking of extra fund.

I think you mentioned that extra capital you buy liquidbees ? is there any other instrument you can park and what is the symbol for it please ?

thanks

 

[Loss_Lover]

Safety, liquidity and return wise (although meager) for parking purposes, I haven't tried anything other than LiquidBees. Let me also know if you find a better alternate.

 

[kingkrunal]

Safety, liquidity and return wise (although meager) for parking purposes, I haven't tried anything other than LiquidBees. Let me also know if you find a better alternate.

Thanks... will surely research more on this..
closed the disaster trader with 90k loss .. this is including the error in the order which happened with on day 1 with short call rather then long one.. so stupidity is very costly and greed killed it more

next steps:
1. taking break till monday
2. on radar is BHEL and VEDL with this strat.

total pl - across all strat : (-60k)

 

[Loss_Lover]

Thanks... will surely research more on this..
closed the disaster trader with 90k loss .. this is including the error in the order which happened with on day 1 with short call rather then long one.. so stupidity is very costly and greed killed it more

next steps:
1. taking break till monday
2. on radar is BHEL and VEDL with this strat.

total pl - across all strat : (-60k)

Of course painful! One miscalculated loss can eradicate months of hard toil.

You remind of a trade that I took in 2013 (much earlier before discovering this method). In those days I used to work full time and simultaneously had just started to day trade. For two months I strictly adhered to simple SuperTrend with a strict stoploss and made net 67,000/- on top of my salary. I was pumped up, high on adrenaline and literally on steroids! So, on a fateful Monday I took a position in Reliance with a stop-loss, made about Rs.2000/- in 10 minutes. Then don't know what happened to me (my rational consciousness was not in control of my monkey mind) I sold BankNifty Calls without a stoploss - options were something I was just beginning to learn - I experienced my first freeze - so far had made small calculated losses only - suddenly about Rs.83,000/- vaporized in matter of 30-40 minutes - I only waited and waited with a hope of a reversal until broker closed the MIS position.

The only thing to note out of this, is the state of mind which I think someway or other is common to all of us - it is the cycle from "supreme Euphoria" to "utter Despair" and the constant repetition of it. Look at any individual's life, society, human civilization, any stock chart, whatever, retrospectively you will evidently find this cyclical state of mind being projected from an individual at a micro-level to a bigger swarm at a macro-level. Can we escape it? IMO no. There are people who claim that they trade without emotions and ask others to keep emotions away but I strongly disagree. If we remove (which we cannot) these emotional aspects from our life, we will no longer be a human. No matter how much one hides from others, losses hurt and they hurt badly. So, if we cannot escape, what should we do? My friend, let us learn to "tame" our emotions with pure-discipline by using any proven-method that suits us best. It is guaranteed that any loss can be recovered if we stick to the rules (any rules) of any winning strategy.

This might sound bit harsh to you, better be!!! Read your own post of 1st Jan that depicts your "state of mind" at that point in time:

credit : 4.55+4.55+6.3-8.85 = 6.55
Plan : if tm reaches around 176 will close 180 and sell 185 double lots..
I know a bit too close on the call sell but have got a bit of cash margin

Today is 28th Feb, how do you feel???

You are the self creator of yourself - please find the disciplined being within and create yourself!!!
Thank you

 

[kingkrunal]

Of course painful! One miscalculated loss can eradicate months of hard toil.

You remind of a trade that I took in 2013 (much earlier before discovering this method). In those days I used to work full time and simultaneously had just started to day trade. For two months I strictly adhered to simple SuperTrend with a strict stoploss and made net 67,000/- on top of my salary. I was pumped up, high on adrenaline and literally on steroids! So, on a fateful Monday I took a position in Reliance with a stop-loss, made about Rs.2000/- in 10 minutes. Then don't know what happened to me (my rational consciousness was not in control of my monkey mind) I sold BankNifty Calls without a stoploss - options were something I was just beginning to learn - I experienced my first freeze - so far had made small calculated losses only - suddenly about Rs.83,000/- vaporized in matter of 30-40 minutes - I only waited and waited with a hope of a reversal until broker closed the MIS position.

The only thing to note out of this, is the state of mind which I think someway or other is common to all of us - it is the cycle from "supreme Euphoria" to "utter Despair" and the constant repetition of it. Look at any individual's life, society, human civilization, any stock chart, whatever, retrospectively you will evidently find this cyclical state of mind being projected from an individual at a micro-level to a bigger swarm at a macro-level. Can we escape it? IMO no. There are people who claim that they trade without emotions and ask others to keep emotions away but I strongly disagree. If we remove (which we cannot) these emotional aspects from our life, we will no longer be a human. No matter how much one hides from others, losses hurt and they hurt badly. So, if we cannot escape, what should we do? My friend, let us learn to "tame" our emotions with pure-discipline by using any proven-method that suits us best. It is guaranteed that any loss can be recovered if we stick to the rules (any rules) of any winning strategy.

This might sound bit harsh to you, better be!!! Read your own post of 1st Jan that depicts your "state of mind" at that point in time:

Today is 28th Feb, how do you feel???

You are the self creator of yourself - please find the disciplined being within and create yourself!!!
Thank you

Exactly... the cycle really repeats across the life time for trading... i had similar experience back in 2008 and imagine the despair at that time .. it was initial days and lost big amount... then left the market completely for 4 years... came back studying research and stuff.. . started small... recovered all .. and good earning on top too.. but the cycle came again ..
the state of mind is something we cannot control and yes correct about the emotions thing..

It is said the market is about, discipline , discipline , discipline !!!

Thanks a lot for this ..

 

[kingkrunal]

Traded nifty weekly with the short strangle:
1 lot only - current profit - 1k and into expiry for tomorrow.

opened a short strangle in IOC with 165ce and 140pe..

planning to keep above adjusting to keep it delta neutral

 

[kingkrunal]

opened a short strangle in IOC with 165ce and 140pe..

still this trade is on..

entered another short strangle in nifty yesterday for 14 march expiry.. in loss of 2k as of now due to bull run in 2 days... have adjusted to keep the delta neutral..