Premium Eating Strategy - BankNifty Weekly Options

[mycall]

Thanks for the clarity...i meant you said some adjustments?hope you meant adjustment as exit positions and enter in new positions...

Adjustments can be a new position by closing existing one at the same strike or previous strike or converting spread to a naked by exiting the buy... whatever suits me at that point of time depending upon current market condition.

 

[mycall]

Your expectations are very realistic and your overall strategy is very impressive. Thanks for sharing.



Cheers
AK

Thanks @arunkarthik

We are perfecting our strategies... Once these are perfected... We are going to scale this up to satisfy us financially.

Currently researching on management strategies for stressed spread positions. I find that Spreads are the most logical strategies for current Indian share market... more so due to the ballooning margin requirement policies recently being implemented.

 

[mycall]

Good Morning Friends...

Today morning 27300CE shorted @ 15.10

Sorry for the delay... got some workload this morning

 

[mycall]

Exited naked position @ cost

Taken Credit Spread at 27300CE/27400CE@ 24.25/14.10

 

[mycall]

Good move today...

Taken another CS at 27400CE/27500CE @ 31.20/15.25 = 15.95 credit points

Exited from this CS at 7.55/5.65 = 1.9 credit points

Profit booked: 14.05 pts

Immediately recovered...

Again re-entered 27400CE/27500CE @ 21.20/11.15

 

[mycall]

Exited 27400CE/27500CE @ 7/4.30

Profit booked: 7.8 pts...

Total Profit booked so far: 21.85pts

Holding Credit Spread at 27300CS

 

[mycall]

Exited from CS at 27300CE @ 7/4.50

Profit booked: 7.65

Total Profit booked: 7.65 + 21.85 = 29.5 pts

 

[mycall]

As promised here is the strategy for aggressive traders... THIS IS FOR EDUCATIONAL PURPOSES ONLY... TRADE WITH CAUTION and AT YOUR OWN RISK

Conservative (NON-DIRECTIONAL) Bank Nifty Option Strategy - 2
Delta Neutral Short Strangle

This strategy is a bit risky but it gives good rewards. We have to be too strict with the management rules of this strategy, as the loss potential is unlimited.

Trade Entry

We short 2 next series (weekly) BankNifty (BN) options of combined value 2+% of capital on Thursday (weekly expiry day) and hold through the expiry or until our profit target or S/L is hit. 1 PE and 1 CE of nearly equal value are shorted. This creates a range of minimum 1000-1200+ keeping the BN spot at the center. It is very unlikely for BN to close beyond that range in a weeks time. As these are weekly options, premium erodes on daily basis irrespective of BankNifty's movement.

Trade Exit

We Exit from the trade whenever our desired profit is achieved. That gives us about 1.5% return from the trade per week.

Trade Management

BN being a highly volatile counter, it moves wildly pretty frequently. This poses significant threat to our positions. Though our strategy is based on a simple fact that BN doesn't close beyond and There are 3 managements we do here, never to be overstepped by new inexperienced trader.

i) Once BN starts moving one sided we shift the loss making option to next strike maintaining the original range of 400/500 pts from BN CMP, neutralizing the loss as much as possible. Focus of this action is not to book loss as long as possible. As per our experience generally maximum 2 shifting is possible.

ii) Book profit making option at 70-75% profit and short previous strike option. This will help add to the profit. But do this only when BN moved on sided and loss making option is shifted. Here also maintenance of the range from BN is mandatory. Far is better. Otherwise in case of a reversal there will be a threat to this end also.

iii) Exit from the loosing option when BankNifty crosses 100point to the holding option strike.

NOTE: Experienced traders can modify this strategy by forming complex strategies like different spreads and make it more productive or keep the loss in control. Novice traders if following this strategy, must learn this strategy by paper trading for as long as they don't feel good. Please don't alter any of the management strategies described.

Suggestions or queries are most welcome.

DISCLAIMER: These are our views and people like to use this strategy should use at their own risk.

 

[VJAY]

As promised here is the strategy for aggressive traders... THIS IS FOR EDUCATIONAL PURPOSES ONLY... TRADE WITH CAUTION and AT YOUR OWN RISK

Conservative (NON-DIRECTIONAL) Bank Nifty Option Strategy - 2
Delta Neutral Short Strangle

This strategy is a bit risky but it gives good rewards. We have to be too strict with the management rules of this strategy, as the loss potential is unlimited.

Trade Entry

We short 2 next series (weekly) BankNifty (BN) options of combined value 2+% of capital on Thursday (weekly expiry day) and hold through the expiry or until our profit target or S/L is hit. 1 PE and 1 CE of nearly equal value are shorted. This creates a range of minimum 1000-1200+ keeping the BN spot at the center. It is very unlikely for BN to close beyond that range in a weeks time. As these are weekly options, premium erodes on daily basis irrespective of BankNifty's movement.

Trade Exit

We Exit from the trade whenever our desired profit is achieved. That gives us about 1.5% return from the trade per week.

Trade Management

BN being a highly volatile counter, it moves wildly pretty frequently. This poses significant threat to our positions. Though our strategy is based on a simple fact that BN doesn't close beyond and There are 3 managements we do here, never to be overstepped by new inexperienced trader.

i) Once BN starts moving one sided we shift the loss making option to next strike maintaining the original range of 400/500 pts from BN CMP, neutralizing the loss as much as possible. Focus of this action is not to book loss as long as possible. As per our experience generally maximum 2 shifting is possible.

ii) Book profit making option at 70-75% profit and short previous strike option. This will help add to the profit. But do this only when BN moved on sided and loss making option is shifted. Here also maintenance of the range from BN is mandatory. Far is better. Otherwise in case of a reversal there will be a threat to this end also.

iii) Exit from the loosing option when BankNifty crosses 100point to the holding option strike.

NOTE: Experienced traders can modify this strategy by forming complex strategies like different spreads and make it more productive or keep the loss in control. Novice traders if following this strategy, must learn this strategy by paper trading for as long as they don't feel good. Please don't alter any of the management strategies described.

Suggestions or queries are most welcome.

DISCLAIMER: These are our views and people like to use this strategy should use at their own risk.

Dear mycall,
Thanks for sharing your strategy....:clap:
What you meant by "short 2 next series (weekly) BankNifty (BN) options of combined value 2+% of capital" is it 1k if our cap is 1 lac?
you meant range of 1000-1200 ..it means 500-600 points from spot? am right?

 

[mycall]

Dear mycall,
Thanks for sharing your strategy....:clap:
What you meant by "short 2 next series (weekly) BankNifty (BN) options of combined value 2+% of capital" is it 1k if our cap is 1 lac?
you meant range of 1000-1200 ..it means 500-600 points from spot? am right?

Dear VJAY,

I have clear target for every trade I enter. My investment is about 65-70k per lot (short)... all percentages are of that investment....

Yes... Thursday closing we generally get even 1500 range options at that cost... BN+-700-800 each side.