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[jamit_05]

Cost has come down drastically.... as expected.

5000 CE 53.80
4800 PE 96.60

The pair now costs... 150;

15 to 20 points more correction needed.

 

[jamit_05]

Our desired level of cost will mostly come today since prices are at a resistance. Be cash ready...

 

[gurmy.]

Observations

We noticed how one day was enough to meet 10% target on the short. Hence, it is evident that losing 10% value in a day is not only possible but commonplace. It also happened once last week too.

So it just might be possible that we form a trading method from the perspective of a pendulum's swing. Go long when at one extreme... square off near middle.... then short when at the other extreme.... and square off at target.

It is better said than done. It will take quite a bit of experience to pull it off. In this arena, to start out with things are not as simple as they look.

Day about to start...

nicely put

 

[jamit_05]

On the second trading day of the short, the cost fell to 145.

Another point to note:

Our target was swiftly achieved. Primarily because the prices went anti-trend. Hence, put prices which are at a good premium (when compared to equi-distant call prices) faced reduction. Had this move been with trend, then profits would be none to minimum.

With this experience we can adjust the target. In similar scenario, if prices move against anti-trend then target 15%, else only 8%; Proper understanding of forces at work will increases strike rate. Soon, the method will cross the threshold of success.

Open to comments.

Thank you.

 

[soft_trader]

How are you choosing the strike prices?

Profit % is based on your capital?

 

[jamit_05]

How are you choosing the strike prices?

Profit % is based on your capital?

As spot come to round figures or near about.

Yes. Capital or the cost of the pair sold or bought.

 

[soft_trader]

As spot come to round figures or near about.

Say Nifty in in an Uptrend and is currently at 4934 (Spot), which strike prices will you choose for your trading. You are basically selecting ATM, ITM or OTM option contracts?

 

[jamit_05]

Say Nifty in in an Uptrend and is currently at 4934 (Spot), which strike prices will you choose for your trading. You are basically selecting ATM, ITM or OTM option contracts?

at spot 4834, i'd probably take 4900 CE, 4700 PE.... if cost at base. So, yes... buying OTMs;

 

[jamit_05]

One more advantage for Shorting.

Wednesdays are almost always sideways. So, to reach our target we can extend our wait.

 

[jamit_05]

cost is comfortably bobbing about last weeks low. We need 20 points lower.