Options trading to beat the returns of traditional investment methods

[anildnr]

Remember seeing you on Amrutham's thread on Butterflies.

The easiest to make money in Options for me were covered calls.

Next are Short Strangles. The cautions when trading Short Strangles are: Avoid months/weeks when volatility becomes high (=high ATR), which means don't trade in these months/weeks. Trade only Nifty or Bank Nifty Options. Trade only Far OTM Options. Learn to adjust positions for which keep extra capital. Must have a stop loss.

Vertical spreads are also good, but I do not have enough experience in them. Could not try out Butterflies because I am using a bank as my broker.

Good CHANCE to make money if you try the above.

Thank you rajeev for inputs. I do trade in short strangles in banknifty main.
So for covered calls, do u use future or deep itm calls to buy?wat is the downside protection u r using? Is it buying a put?
So covered calls for weekly expiries work well? Will look into it. Thank you once again.

 

[anildnr]

Thinking to short puts of far otm banknifty once NIFTY moves down more than 100 points

 

[anildnr]

Shorted 27400pe..400 quantity at 44 and slided into losses ...slowly adjusted that position with buying 200 quantity 27700pe ..100 quantity 27500pe.

Closed all positions as of now.

 

[anildnr]

from 2010 means almost 8 to 9 years now ..
good u jumped to selling options .. and happy to see u r getting reasonable returns in past 4/5 months .
so basically one should wish to keep this success to go for ever . try to find out where it will collapse so that we can avoid . to my knowledge
1. when a day like Nirmala ji appointed on as FM / or a day like surgical strike or march 11 tsuanmi in Japan are those days we will get in to trouble . be sure a day like that will come say in next two years. so money management only protect us .
2. out of bore or greed we start again buying options .
all the best

Yes..greed and emotions plays main role in most of the cases. When other person says he got jackpot by buying options we will get tempted and break our rules...

 

[SarangSood]

Shorted 27400pe..400 quantity at 44 and slided into losses ...slowly adjusted that position with buying 200 quantity 27700pe ..100 quantity 27500pe.

Closed all positions as of now.

I also had 27200&27300 pe short. But it was in a ratio strategy. My bought put were 27400&27500. So basically It was a bearish delta neutral strategy and it gave decent return in the last hour. I had similar position in cals though which turned out to be in some loss. I was hoping to catch a direction and go overboard in the respective leg. Overall was a good day but the amount of adjustment required was a lot and fast to maintain delta.

 

[anildnr]

I also had 27200&27300 pe short. But it was in a ratio strategy. My bought put were 27400&27500. So basically It was a bearish delta neutral strategy and it gave decent return in the last hour. I had similar position in cals though which turned out to be in some loss. I was hoping to catch a direction and go overboard in the respective leg. Overall was a good day but the amount of adjustment required was a lot and fast to maintain delta.

Yeah..I did not expect this much downfall. Of course I am not familiar with any technicals. Just took position with my own judgement and adjusting If anything happens.

I squared off my positions early feeling that if it reverse my deep itm puts which I bought will give My loss.
But overall even though more trades adjustments are less for me as it's a directional move.

Overall it's good day with 3% returns on my capital.

Thank you sarang as I mentioned you and amrutham inspired lot of people here by proving people among us also can do miracles with discipline.

 

[SarangSood]

Yeah..I did not expect this much downfall. Of course I am not familiar with any technicals. Just took position with my own judgement and adjusting If anything happens.

I squared off my positions early feeling that if it reverse my deep itm puts which I bought will give My loss.
But overall even though more trades adjustments are less for me as it's a directional move.

Overall it's good day with 3% returns on my capital.

Thank you sarang as I mentioned you and amrutham inspired lot of people here by proving people among us also can do miracles with discipline.

Your welcome anil and i appreciate you starting a new thread. You could have bought only 27500 pe instead of going for 27700. That way you could have easily hold your position with minimum risk upwards and good gains downwards.

I also don't follow any technicals. Just closely follow volatility and price action. Today was not the day for short strangle as the premiums were not falling consistently. So i initiated an iron condor which then was converted to a put ratio spread. The key is to adjust quickly without a thought and seeing the cost.

 

[anildnr]

Your welcome anil and i appreciate you starting a new thread. You could have bought only 27500 pe instead of going for 27700. That way you could have easily hold your position with minimum risk upwards and good gains downwards.

I also don't follow any technicals. Just closely follow volatility and price action. Today was not the day for short strangle as the premiums were not falling consistently. So i initiated an iron condor which then was converted to a put ratio spread. The key is to adjust quickly without a thought and seeing the cost.

Great..watever the may be the position we started with ..it can be either short strangle or covered call...when it goes into losses need to adjust it spontaneously atleast to come out with minimal loss or breakeven.

 

[anildnr]

Depending on the premiums and volatility...today we can buy both ce and pe if we premiums are not decreasing..nowadays this is occuring on the week start I mean on Friday.

Or else selling far otm is also fine I feel

 

[SarangSood]

Depending on the premiums and volatility...today we can buy both ce and pe if we premiums are not decreasing..nowadays this is occuring on the week start I mean on Friday.

Or else selling far otm is also fine I feel

Far otm is just a concept now at least in banknifty. It takes one session these days to wipe out any naked far otm. So selling them would require good knowledge. Simple theta decay doesn't work anymore. Also it's been many weeks now since i have taken trades on Friday and Monday just like you stated. The real action starts in the afternoon session of Tuesday's when the tone of a week has been established.