Hi MyCall,
I also trade Nifty and BankNifty using Short Strangles and Credit Spreads.
My short strangles strategy is similar to yours - have used both adjustments - shifting the winning side and the losing side. In credit spreads, the difference is that you trade strikes which are very close, say 27500/27400. But I go for bigger difference, for example 27500/27100 and rather far from current spot price.
You have noted that you got "busted" two or three times. Can you please share those experiences in detail - the numbers, types f move, and the loss it gave? Traders can get busted but don't know how much is the loss, how it could have been avoided looking back.
No hurry. Hope to see you back and to learn your experience.
Regards
Rajeev
I don't recollect the date and time... but I remember the level... it was 25000 and I was holding position targeting that level... next level was 24800... when price was hitting 25000 I adjusted my position to get even at 24800... but that got broken... my associate wanted to keep it holding... he held his when I exited with 150pts loss on 2 naked lots... BNF kept following the trend and reached near 24600... where my associate exited... surprisingly price bounced back and closed above 25000 that same day...
there were other a couple of occasions where we got greedy and hung on... and got our butt kicked...
for me an option trader has many 'options' at hand at any point of time in the market... what matters are trader's mindset, risk appetite, money strength... whether to play it big or small... what I learned is it always wise to play it small... safe... it is always best to go for realistic ROI targets and plan a strategy according to that to participate in the game...
regarding close or wide spreads (strike based)... it is your risk appetite... Credit spread has very bad risk reward ratio... 100strike credit spread with a 10 pts credit can give you max loss of 40pts if S/L or adjustment set at buy strike hit... which is common practice... with 400strike wide credit spread with 50pts credit can give you considerable loss and I believe much difficult to manage when under stress...
If you are taking entry based on chart then the that is another issue... the S/L is set to the chart...
This is my thought and experience... I don't know if I could explain my views properly or answer your queries correctly... please let me know if you need any further information.
Thank you.