Hi Friends!
It was long I haven't posted anything here...
Due to scarcity of time I am often not able to sit at the terminal... So mainly focusing on cash using SIP guided system... market was down so it was good opportunity to buy some quality stocks at lucrative price... anyway... up and down it doesn't matter much when you are following a trend system in stock.... so I am continuing with it...
During this time I traded ratio spreads at put side which gave me some return... also took a put calendar in NF above 10500 which gave me good profit...
We currently researching on two specific strategies... one is short strangle in monthly option... weekly option strangle is too critical for me due to uncertainty of time and also it is too strenuous on my health to do so much adjustments so fast... but yes... if one can handle pressure it is most lucrative... our friend SarangSood is the master of this...
As per my opinion monthly option strangle is highly manageable due to higher time frame... however, I must say here that friends want to do strangle in option must have sufficient margin to handle pressure... management needs margin for selling multiple lots to cover difference in premium due to volatile move in BNF... the job here is sell additional options at far distance from ATM and wait it out for the market to settle down... which will trigger a drop in option premium... until profit target is reached... additional option selling is more desirable than rolling up initially as it helps keep the strikes farthest from the ATM... safe in case BNF retrace... one important thing is we must restrict max 2x (max holding 2 PE against 1 CE or vice versa)... if the trend continues then profit making options can be rolled up periodically to adjust premium as much as possible while being as far as possible from ATM... if price reaches within 200pts of the loss making option strike... then it needs some special treatment... I have a few different managements in the system... but these managements are all depend upon the risk profile of the person and current market perception... it is solely trader's call... 1) if the loss in the position is lower then we can exit the loss making option and wait for the market to settle down... reenter the position if market retrace back; 2) if the loss in the position is lower then roll up to a strike which covers the and wait... if that also get threatened then exit from it; 3) If the loss in the position is higher and it is getting difficult to manage by opposite options... form a Debit spread of 200-300 strike difference at the next strike of the loss making option strike... and service the debit by shorting additional PE of the same value... trader's mindset and present market perception and the premium position will determine which step should be taken... an experience trader can consider VIX, PCR, Delivery based OI of index stocks and option OI before taking appropriate decision...
Another strategy we are working on is put and call calendar... these are sideways or directional strategies... I will write about this at a later post...
I like my peers and friends here to throw their opinion and remarks on whatever strategy we have developed...
Thank you... happy trading journey to all my TJ friends