Hi AW10,
1) Thanks for the encouragement. I have learnt few things and will summarize them in future post when time permits. Also, I will be eagerly waiting for your comments.
2) Also, regarding ST method, I noticed that it is somewhat risky since he has shorted 2 lot @5100 and long 1 lot @5300. If nifty tanks then it can give us sleepless night. Offcourse the probability of that is very small but the whole point is that still there is some fear in your heart and you have to monitor the market continuously.
3) If you notice in the above strategy (strategy 2) if I dont have initiated 4900 put then it will also give 300 point reward potential with 35 point risk and we dont need to worry till nifty falls below 4700
4) The whole point of my strategy was not to worry about the market, if you are ready to loose the risk amount then you dont need to monitor the trade once you initiate it.
5) I thought about another strategy to bring down the risk further. Below is the BID ASK rate for FEB series.
Suppose now if I make following spread
Strategy 1:
5300 PE long @ 177.75 (1 lot)
5000 PE short @ 65.45 (2 lot)
4900 PE long @ 45.8 (1 lot)
4800 PE short @29.25 (1 lot)
Breakeven - 5231.6
Risk - 63.4 + 5 (brokerage) = 68.4
Max Reward - 231.6 (Nifty @5000)
No worry till nifty is above 4667 @ expiry i.e. approx. 550 point downside protection
Strategy 2:
5200 PE long @ 127.85 (1 lot)
4900 PE short @ 45 (2 lot)
4800 PE long @ 30 (1 lot)
4700 PE short @19.4(1 lot)
Breakeven - 5146.55
Risk - 48.45 + 5 (brokerage) = 53.45
Max Reward - 246.55(Nifty @4900)
No worry till nifty is above 4551 @ expiry i.e. approx. 700 point downside protection
Strategy 3 (ST strategy):
5300 PE long @ 177.75 (1 lot)
5100 PE short @ 91.05 (2 lot)
Breakeven - 0
Risk - 0
Max Reward - 200 (Nifty @5100)
No worry till nifty is above 4900 @ expiry i.e. approx. 400 point downside protection
Can you tell me your view about the above strategies?
1) Thanks for the encouragement. I have learnt few things and will summarize them in future post when time permits. Also, I will be eagerly waiting for your comments.
2) Also, regarding ST method, I noticed that it is somewhat risky since he has shorted 2 lot @5100 and long 1 lot @5300. If nifty tanks then it can give us sleepless night. Offcourse the probability of that is very small but the whole point is that still there is some fear in your heart and you have to monitor the market continuously.
3) If you notice in the above strategy (strategy 2) if I dont have initiated 4900 put then it will also give 300 point reward potential with 35 point risk and we dont need to worry till nifty falls below 4700
4) The whole point of my strategy was not to worry about the market, if you are ready to loose the risk amount then you dont need to monitor the trade once you initiate it.
5) I thought about another strategy to bring down the risk further. Below is the BID ASK rate for FEB series.
Code:
PE (25 FEB 2010 Expiry series)
BID ASK
5300 175.2 177.75
5200 127 127.85
5100 91.05 91.5
5000 65.45 68
4900 45 45.8
4800 29.25 30
4700 19.4 21.6
4600 14 14.35Strategy 1:
5300 PE long @ 177.75 (1 lot)
5000 PE short @ 65.45 (2 lot)
4900 PE long @ 45.8 (1 lot)
4800 PE short @29.25 (1 lot)
Breakeven - 5231.6
Risk - 63.4 + 5 (brokerage) = 68.4
Max Reward - 231.6 (Nifty @5000)
No worry till nifty is above 4667 @ expiry i.e. approx. 550 point downside protection
Strategy 2:
5200 PE long @ 127.85 (1 lot)
4900 PE short @ 45 (2 lot)
4800 PE long @ 30 (1 lot)
4700 PE short @19.4(1 lot)
Breakeven - 5146.55
Risk - 48.45 + 5 (brokerage) = 53.45
Max Reward - 246.55(Nifty @4900)
No worry till nifty is above 4551 @ expiry i.e. approx. 700 point downside protection
Strategy 3 (ST strategy):
5300 PE long @ 177.75 (1 lot)
5100 PE short @ 91.05 (2 lot)
Breakeven - 0
Risk - 0
Max Reward - 200 (Nifty @5100)
No worry till nifty is above 4900 @ expiry i.e. approx. 400 point downside protection
Can you tell me your view about the above strategies?
