Paper trading options

[bajajdipesh]

Update at the closing of 05 Jan 2010

Nifty spot - 5277.90

Nifty 5000PE Jan series - 31.55 (1 lot)
Nifty 4700PE Jan series - 7.05 (2 lot)
Nifty 4600PE Jan series - 4.65 (1 lot)

Strategy 1:
Net position - 50*31.55 - 100*7.05 + 50*4.65 = 1105.0
Profit = 1105.0 - 4700 = -3595 Rs

Nifty spot - 4952.60

Bought Nifty 5000PE Jan series - 185 (1 lot)
Short Nifty 4700PE Jan series - 75 (2 lot)
Bought Nifty 4600PE Jan series - 55 (1 lot)

Brokerage - Rs 50 per lot = 200 Rs for 4 lots
Margin requirement for 1 lot of nifty short = Rs. 25000
Total Investment - Rs. 12000 - Rs. 7500 + Margin requirement for 2 lots of nifty shorts + brokerage for 4 lots = 54700
Total risk - Rs. 4500 + Rs 200 = Rs. 4700
Breakeven - 4906

WARNING: The above strategy is only for learning purpose. Please don't initiate any real trade based on this thread. I am a novice and try to learn through paper trade.

 

[AW10]

Appreciate you are tracking this strategy everyday.
Why not create one more trade and track that as well..
You can use the same series to learn more stuff, rather then trying something new in Feb.

Just my thoughts. Take action based on what ur own workload, plan, priorities etc.

 

[bajajdipesh]

Hi AW10,

Thanks for the encouragement. I was also thinking on the similar lines. Also, since last time I initiated trade at the support, this time assuming 5300 as resistance should start another trade and see how it goes.

One more thing I want to mention here. I observed that making same spread with call is not that lucrative because out of money call options premium are not that much and hence overall risk increases while with put spread the risk reward ratio seems to be quite attractive. Therefore, I prefer to have a put spread initiated at the resistance.

Appreciate you are tracking this strategy everyday.
Why not create one more trade and track that as well..
You can use the same series to learn more stuff, rather then trying something new in Feb.

Just my thoughts. Take action based on what ur own workload, plan, priorities etc.

 

[bajajdipesh]

Update at the closing of 06 Jan 2010

Nifty spot - 5281.80

Nifty 5000PE Jan series - 26.50 (1 lot)
Nifty 4700PE Jan series - 6.00 (2 lot)
Nifty 4600PE Jan series - 4.00 (1 lot)

Strategy 1:
Net position - 50*26.50 - 100*6.00 + 50*4.00 = 925.0
Profit = 925.0 - 4700 = -3775 Rs

Assuming 5300 as resistance for nifty lets try to initiate one more trade

Nifty 5300PE Jan series - 108.00 (1 lot)
Nifty 5000PE Jan series - 26.50 (2 lot)
Nifty 4900PE Jan series - 16.90 (1 lot)

Brokerage - Rs 50 per lot = 200 Rs for 4 lots
Margin requirement for 1 lot of nifty short = Rs. 25000
Total Investment - Rs. 6245 - Rs. 2650 + Margin requirement for 2 lots of nifty shorts + brokerage for 4 lots = 53795
Total risk - Rs. 3595 + Rs 200 = Rs. 3795
Breakeven - 5224.1

Strategy 2:
Net position - 50*106.9 - 100*27.00 + 50*16.45 = 3467.5
Profit = 3467.5 - 3795 = -327.5 Rs

From the above, it is clear that since out of money put option are not at much premium trade risk reward ratio is somewhat less lucrative as compared to the time strategy 1 initiated. Lets see how it goes.

Nifty spot - 4952.60

Bought Nifty 5000PE Jan series - 185 (1 lot)
Short Nifty 4700PE Jan series - 75 (2 lot)
Bought Nifty 4600PE Jan series - 55 (1 lot)

Brokerage - Rs 50 per lot = 200 Rs for 4 lots
Margin requirement for 1 lot of nifty short = Rs. 25000
Total Investment - Rs. 12000 - Rs. 7500 + Margin requirement for 2 lots of nifty shorts + brokerage for 4 lots = 54700
Total risk - Rs. 4500 + Rs 200 = Rs. 4700
Breakeven - 4906

WARNING: The above strategy is only for learning purpose. Please don't initiate any real trade based on this thread. I am a novice and try to learn through paper trade.

 

[bajajdipesh]

Update at the closing of 07 Jan 2010

Nifty spot - 5263.10

Strategy 1:

Nifty 5000PE Jan series - 31.35 (1 lot)
Nifty 4700PE Jan series - 6.10 (2 lot)
Nifty 4600PE Jan series - 3.35 (1 lot)

Net position - 50*31.35 - 100*6.10 + 50*3.35 = 1125.0
Profit = 1125.0 - 4700 = -3575 Rs

Strategy 2:

Nifty 5300PE Jan series - 125.00 (1 lot)
Nifty 5000PE Jan series - 31.50 (2 lot)
Nifty 4900PE Jan series - 18.10 (1 lot)

Net position - 50*125.0 - 100*31.50 + 50*18.10 = 4005.0
Profit = 4005 - 3795 = 210 Rs

I am starting this thread for doing paper trade in nifty options and see how my strategy goes on.

Nifty spot - 4952.60

Bought Nifty 5000PE Jan series - 185 (1 lot)
Short Nifty 4700PE Jan series - 75 (2 lot)
Bought Nifty 4600PE Jan series - 55 (1 lot)

Brokerage - Rs 50 per lot = 200 Rs for 4 lots
Margin requirement for 1 lot of nifty short = Rs. 25000
Total Investment - Rs. 12000 - Rs. 7500 + Margin requirement for 2 lots of nifty shorts + brokerage for 4 lots = 54700
Total risk - Rs. 4500 + Rs 200 = Rs. 4700
Breakeven - 4906

WARNING: The above strategy is only for learning purpose. Please don't initiate any real trade based on this thread. I am a novice and try to learn through paper trade.

 

[bajajdipesh]

Update at the closing of 08 Jan 2010

Nifty spot - 5244.75

Strategy 1:

Nifty 5000PE Jan series - 29.25 (1 lot)
Nifty 4700PE Jan series - 6.60 (2 lot)
Nifty 4600PE Jan series - 4.25 (1 lot)

Net position - 50*29.25 - 100*6.60 + 50*4.25 = 1015.0
Profit = 1015.0 - 4700 = -3685 Rs

Strategy 2:

Nifty 5300PE Jan series - 122.00 (1 lot)
Nifty 5000PE Jan series - 29.30 (2 lot)
Nifty 4900PE Jan series - 17.05 (1 lot)

Net position - 50*122.0 - 100*29.30 + 50*17.05 = 4022.50
Profit = 4022.50 - 3795 = 227.5 Rs

I am starting this thread for doing paper trade in nifty options and see how my strategy goes on.

Nifty spot - 4952.60

Bought Nifty 5000PE Jan series - 185 (1 lot)
Short Nifty 4700PE Jan series - 75 (2 lot)
Bought Nifty 4600PE Jan series - 55 (1 lot)

Brokerage - Rs 50 per lot = 200 Rs for 4 lots
Margin requirement for 1 lot of nifty short = Rs. 25000
Total Investment - Rs. 12000 - Rs. 7500 + Margin requirement for 2 lots of nifty shorts + brokerage for 4 lots = 54700
Total risk - Rs. 4500 + Rs 200 = Rs. 4700
Breakeven - 4906

WARNING: The above strategy is only for learning purpose. Please don't initiate any real trade based on this thread. I am a novice and try to learn through paper trade.

 

[rudra]

Hi AW10,

Thanks a ton for your comment.

1)Yes, 4910 is the break even and the strategy will be in profit only if nifty is below 4910 on expiry.
2) I am novice and trying to learn and I don't know how to calculate the net delta for the position. Can you please help me in calculating the same?
3) I am presuming market to be range bound and therefore not having stop loss. But after 100 points upmove I will cover 1 lot of short position and will try to again short when it comes down by 100 points. This is the part of strategy.
4) Regarding brokerage, I am having rkglobal account so it is around 45Rs per option lot but yes that should also be taken into account. I will modify the post to take that into account.
5) I have already burnt my finger in real trading. Therefore, I am thinking to first paper trade the strategy and get enough confidence then only will again start real trading.

Once again thanks a lot for your comment. I hope you and other seniors at traderji will guide me to fine tune my strategy.

hi i am new to option trading, I was using HDFC sec for option trading . But the brokerage is very high i.e 100 rs per lot (100 in buy and 100 in sell) + extra charges. U have mentioned about rkglobal which is charging 9 rs per lot (as i know from the web site). But u have mentioned 45 rs per lot . Can u explain in detail . that 45 rs only for buy side or both . Also explain instead of 9 rs how it become 45 rs.

 

[bajajdipesh]

Hi Rudra,

I am also having hdfcsec account and due to there high brokerage, I have opened up rkglobal account. Regarding brokerage for rkglobal for a nifty option it will be
9 Rs in buy side + 9 Rs in sell side + taxes which will be approximately around 30 Rs.
I am having extra margin of 15 Rs in my 45 Rs calculations.

hi i am new to option trading, I was using HDFC sec for option trading . But the brokerage is very high i.e 100 rs per lot (100 in buy and 100 in sell) + extra charges. U have mentioned about rkglobal which is charging 9 rs per lot (as i know from the web site). But u have mentioned 45 rs per lot . Can u explain in detail . that 45 rs only for buy side or both . Also explain instead of 9 rs how it become 45 rs.

 

[rudra]

Hi Rudra,

I am also having hdfcsec account and due to there high brokerage, I have opened up rkglobal account. Regarding brokerage for rkglobal for a nifty option it will be
9 Rs in buy side + 9 Rs in sell side + taxes which will be approximately around 30 Rs.
I am having extra margin of 15 Rs in my 45 Rs calculations.

Thanks for the reply. Actually i am gng to open account in RK global and i am interested in option. Thanks again

 

[msri]

NIFTY SPOT5252.10
BULL CALL SPREAD
CE5300 @71.40
[email protected]
COST1890
BE 5337.80
MAX PR. 3110.
kINDLY ANALYSE AND COMMENT