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[jamit_05]

Have another agenda in mind.

To introduce the reverse.

Premise

The market often makes a strong move followed by few days of sideways. After this spike we SELL the pair.


From the face of it, this is a SAR type method. As soon as we exit one, we enter in the other. Interesting.

Lets see how things unfold.

 

[jamit_05]

Just entered new position.

June Month 5000CE bought at 101.55
4800PE at 85.25

Cost: 186.80

target: 20% gain. Or a massive move... SL 50% of the value...

 

[jamit_05]

Earlier plan was for Thursday.
However, the market went majorly sideways. A very narrow range since this morning. ATR has fallen to near lowest. Looks like an impending BO.

 

[jamit_05]

within a few minutes of the earlier post... voila there was a breakout....

(but.... ego is bad)

 

[jamit_05]

Looks like another 50 points down and we will be ready to exit at 20% gain...

Best profit comes when either of the leg it ATM or better ITM.

 

[vssoma]

dear jamit,
how if we sell instead of buy...

 

[jamit_05]

dear jamit,
how if we sell instead of buy...

That too is under consideration. Like I mentioned a few post back.

In that, our aim is to have nifty confined in a range and to earn from devaluation. That is tricky. The only approach that seems somewhat profitable is this:

After a strong move, sell 100 OTM pair and look to get out in just a couple of days after you bag 15%;
Here we will keep a RR of 1:1;
So either we get 10% or we lose 10% we are out.

Premise:

Market seldom makes strong moves back to back. It usually gives a breather for two days at least. So, the pair devalues from time decay and reduction of volatility after strong move.

The best setup is selling on Friday 3.15 p.m. and squaring off on Tuesday morning 11.00 am;

The time decay is pronounced in last 15 days.

 

[jamit_05]

Difference in the two concepts.

For going longs, our winning angle is to have any one leg become ATM or tad bit ITM. This should easily give a 20% profit. Since, nifty comfortably moves 100 points in a week our method stands a chance. We have set a wide stop of 50%. And RR of 2:1; I wish to make it 1:1 by reducing the stop. Once we have some data we will refine.


For going short, our winning angle is to capture the
a) cooling off after a strong move (what is the greek for it?)
b) time-decay of 4 days (selling on friday, covering on Tues morning).

This is a quick 10 to 15%;

The above is the difference we plan to play out.... lets see what market has to teach us.

 

[vssoma]

jamit,
it means...we need to trade after 2nd week only...????

 

[jamit_05]

jamit,
it means...we need to trade after 2nd week only...????

I think you are referring to buys.

Not really. We will be looking for a leg to become atm or a little itm.

ty.