Regular Income From Markets. Risk Free. Takes no Time

[jamit_05]

I don't feel a need to buy double quantity of OTMs / wings as its for rare event when we have a move of more than 200/300 points, we also need to keep the cost low.

Last year we have 5 months with more than 300 points diff out of which 2 have a diff of 500 or more, taking all this into consideration you can come up with a better strategy and plan to generate regular income from markets by trading option

Best :thumb:

So far, what seems logical is using NF to cover the side that is progressing. There will be a few NF SL hits along the way. Will cover them too by shorting options, judiciously though. Will try level best to keep delta neutral.

Hence, there is scope to retain the entire premium and in case of reversal gain from NF as well.

Will keep the thread updated.

Thanks.

 

[aditya.pathak]

Hi Amit, Really nice thread, I had been following this thread from quite a long time now. It has helped a lot in learning option trading strategy.
wanted to check your view on this pair?
5300.00 Call@ 31.8
5100.00 Put@ 88.3
it's trading as cheapest pair for contract expiring on 34th day since 01-01-2011. would you suggest it as a buy?

 

[sivaskv]

Hi Amit,

Market is going sideways. both CE/PE is are goind down. Is this right time to position size or wait.

Plz suggest.

Yesterday bought
CE5200 - 100 units
PE5100 - 100 units

Rate of 72/87.25

Siva

 

[jamit_05]

Hi Amit, Really nice thread, I had been following this thread from quite a long time now. It has helped a lot in learning option trading strategy.
wanted to check your view on this pair?
5300.00 Call@ 31.8
5100.00 Put@ 88.3
it's trading as cheapest pair for contract expiring on 34th day since 01-01-2011. would you suggest it as a buy?

Hi Amit,

Market is going sideways. both CE/PE is are goind down. Is this right time to position size or wait.

Plz suggest.

Yesterday bought
CE5200 - 100 units
PE5100 - 100 units

Rate of 72/87.25

Siva

It is difficult to make any clear suggestion in such low volatility. But if you must buy... then purchasing 5200 CE and 5000 PE at current cost and selling at 5% plus profit or loss tomorrow seems fair.

 

[jamit_05]

In buying, profit starts building (and fast) after one leg goes ITM. But due to such poor volatility for the past few weeks... a 100 point move in a day has become very rare.

Therefore, one has to consider holding position beyond a day or two. Hence, he has to face time-decay... to beat the decay some juggling is required... hence the concept of delta neutral...

 

[jamit_05]

Current Portfolio

Current portfolio:

Short Positions:

5100 PE units:100
5200 CE units:100
----------------------------
Total @ 150
Premium Rcvd: Rs.175

Long Positions:

NF units:100 @ 5164
SL 5112.25
Total Risk = 52 points * 100 = Rs.5200/=
----------------------------

Took a loss of Rs.2200 on NF. Need to recover that.

Pending action
----------
By adding two NF Longs, the delta is partial towards the upside. Now, looking to Short 100 OTM Call Options to increase delta on the downside.... (and recover the Rs.2200 lost and the risk amount for the current 2 long NFs); Will carry out this order, if and when NF gives intraday down signal.

 

[PartTime_Trader]

Re: Current Portfolio

Pending action
----------
By adding two NF Longs, the delta is partial towards the upside. Now, looking to Short 100 OTM Call Options to increase delta on the downside.... (and recover the Rs.2200 lost and the risk amount for the current 2 long NFs); Will carry out this order, if and when NF gives intraday down signal.

What TF you are using for intra-day decisions?

 

[jamit_05]

NF 5300 seems to be a good resistance. While the uptick lasts will short 5300 CE 100 units near EOD.

Only a major intraday reversal could muck this plan.... in which case god help NF... 4800 won't be distant.

 

[jamit_05]

Re: Current Portfolio

What TF you are using for intra-day decisions?

For major trend changing decisions: 120 min...
for profit booking: 30 min or 15 min... depending on the strength of the pattern.

 

[PartTime_Trader]

i stick to the standard hourly & 15 mins charts, never tried 120

anyway, 120 minutes seems to be fair enough to be used for trading with options,