Picking up nickels in front of steamroller!!

[jvblogger]

It gives confidence knowing even jvblogger is holding 5500 CE

btw i have a question.. Say after expiry on last thursday of july 2010. nifty closes on 5540.

what will be my loss on the call that i sold for 5500?

is it 40(5540-5500)*50(lot size) = 2000??

Please advice

Please understand that I have sold my 5500 CE for around Rs.25 and therefore I still have some space to move around.

 

[pradeep24s]

Please understand that I have sold my 5500 CE for around Rs.25 and therefore I still have some space to move around.

I understand that.. i have sold my 5500 CE at 27.. Keeping my fingers crossed.

 

[jvblogger]

I understand that.. i have sold my 5500 CE at 27.. Keeping my fingers crossed.

Sorry Pradeep, I meant that message directed to Cool_kk, who has sold 5500 CE for 17.

Sold Sep'5900 CE @ Rs.22 + Sep'4800 @ Rs.37= Rs.60

 

[Capricorn]

Vow.. we are three now..
I sold @ 17 bit late..
Have you hedge sold any put against it..
I haven't done.. Should have done.. Will take it as a lesson..

IMO hedging a short call with a short put is a recipe for disaster...

 

[MaxX]

IMO hedging a short call with a short put is a recipe for disaster...

The whole strategy on this topic is to sell a call + put.. i.e. a short straddle.

 

[Capricorn]

Yes friend , I've been thru some of the posta but no one seems to have the slightest idea how to manage the trade if things start going wrong, except, pray ,hope, panic and get out at a loss thats what I,ve gathered from some of the posts i've read . Short strangle is what has been done in most of the trades , and as a passive strategy it is a disaster in a dynamic market.Scared money will never never win.

All the best anyway.

 

[jvblogger]

Yes friend , I've been thru some of the posta but no one seems to have the slightest idea how to manage the trade if things start going wrong, except, pray ,hope, panic and get out at a loss thats what I,ve gathered from some of the posts i've read . Short strangle is what has been done in most of the trades , and as a passive strategy it is a disaster in a dynamic market.Scared money will never never win.

All the best anyway.

Thanks for going through 'some of posts'. Please tell me if you have gathered following details form these posts:

• Have you read my trade profile describe in one of these posts?
• Have I talked about RISK MANAGEMENT in any of posts or not ?
• What limit I have set for my stop-loss?
• How to calculate such stop-loss?
• Where I have said what to HOPE, when to PRAY and when to PANIC?

Finally from your expertise of knowledge kindly provide me a strategy where...

1) I dont have to invest cash to trade
2) I can use my equity as collateral
3) I dont have to sit before the computer during trading hours
4) 3-4% consistent monthly return on the equity-collateral used

From the first post , I have never said selling option is not risky, infact I have taken every opportunity to remind to the few who are interested, that it is indeed risky, UNLESS proper risk management is in place.

Capricon, I have respect for your but kindly do not use statement like "no one seems to have the slightest idea how to manage the trade". If you are not able to find my risk management method, I will find the post and show to you!!

Further, I have never recommended this strategy to anyone , and always insisted to understand the risk involved.

 

[cool_kk]

Thanks for going through 'some of posts'. Please tell me if you have gathered following details form these posts:

• Have you read my trade profile describe in one of these posts?
• Have I talked about RISK MANAGEMENT in any of posts or not ?
• What limit I have set for my stop-loss?
• How to calculate such stop-loss?
• Where I have said what to HOPE, when to PRAY and when to PANIC?

Finally from your expertise of knowledge kindly provide me a strategy where...

1) I dont have to invest cash to trade
2) I can use my equity as collateral
3) I dont have to sit before the computer during trading hours
4) 3-4% consistent monthly return on the equity-collateral used

From the first post , I have never said selling option is not risky, infact I have taken every opportunity to remind to the few who are interested, that it is indeed risky, UNLESS proper risk management is in place.

Capricon, I have respect for your but kindly do not use statement like "no one seems to have the slightest idea how to manage the trade". If you are not able to find my risk management method, I will find the post and show to you!!

Further, I have never recommended this strategy to anyone , and always insisted to understand the risk involved.

I totally agree with JV, He never ask anyone or US to trade like him.
It just a strategy with own risk
If someone follow half strategy then that is trader mistake rather then strategy.
Well to panic/not to panic.. most of the newbies including me try to do half trade and get into some undesirable situations
So to get some experts opinion is always good with some advice for future But certainly if someone give advice with taunts/being rude is not worth..
I found this thread helpful in learing so.. post myt queries to get some opinons..

 

[MaxX]

Short strangle is what has been done in most of the trades , and as a passive strategy it is a disaster in a dynamic market.Scared money will never never win.

Risk management has been discussed in this topic. JV has his own style of risk management.. while I have my own based on the chart. I have been following a similar strategy to jv's from a long time now (before this thread was made) and it has been consistently profitable. If someone does any sort of strategy without risk management, he would blow up eventually.

By the way, I have tried many 'active' strategies.. nothing has worked as well for me as selling options. Every person has a different niche they fit best into and there are people whose needs are best met by this.

In addition to what jv said, this strategy also allows larger traders (hundreds of lots+) who can put long term positions and target a fixed return % per month. Anyway I doubt holding a position for months is 'scared money'...

Yes risk can be fixed by using bull/bear spreads.. but with that returns take a dive too. To each their own!

 

[Capricorn]

Thanks for going through 'some of posts'. Please tell me if you have gathered following details form these posts:

• Have you read my trade profile describe in one of these posts?
• Have I talked about RISK MANAGEMENT in any of posts or not ?
• What limit I have set for my stop-loss?
• How to calculate such stop-loss?
• Where I have said what to HOPE, when to PRAY and when to PANIC?

Finally from your expertise of knowledge kindly provide me a strategy where...

1) I dont have to invest cash to trade
2) I can use my equity as collateral
3) I dont have to sit before the computer during trading hours
4) 3-4% consistent monthly return on the equity-collateral used

From the first post , I have never said selling option is not risky, infact I have taken every opportunity to remind to the few who are interested, that it is indeed risky, UNLESS proper risk management is in place.

Capricon, I have respect for your but kindly do not use statement like "no one seems to have the slightest idea how to manage the trade". If you are not able to find my risk management method, I will find the post and show to you!!

Further, I have never recommended this strategy to anyone , and always insisted to understand the risk involved.

Whoa friend, No need to take it personally. I 've never said the posts belonged to you, however i WILL REITERATE a passive short strangle is not a strategy for all market conditions.

I have nothing against selling options but most sellers only understand theta and do not understand the animal called IV, the option buyers secret weapon.

For your second query 3 out of 4 is possible, look around, if u want a consistent income go for a F.D.

Cheers..