Simple way to make 100 Nifty points a month (low risk)

#41
Agreed....but, problem with everyone is....not even wait for 10 minutes to market react...where is the question of waiting for years...to multiply money..

Hence, i told, patience only multiply your money...

Imagine, if anyone is going short as per this strategy..i am telling you, no one will wait even 2 or 3 days...they are ready to lose or book minimum profit...but, don't want eat the entire profit......because, everybody wants to trade each and every moment...otherwise, they feel they are missing the opportunity...

Less trade always fruitful...but, i feel nobody accepts...

I accept......people running for secret this is real secret........of success...:thumb:
 

lemondew

Well-Known Member
#42
Yes if I understood you correctly it is safe to plan to make money in some years than make it in a few months. It is always better to gradually increase capital from the profits made.

Agreed....but, problem with everyone is....not even wait for 10 minutes to market react...where is the question of waiting for years...to multiply money..

Hence, i told, patience only multiply your money...

Imagine, if anyone is going short as per this strategy..i am telling you, no one will wait even 2 or 3 days...they are ready to lose or book minimum profit...but, don't want eat the entire profit......because, everybody wants to trade each and every moment...otherwise, they feel they are missing the opportunity...

Less trade always fruitful...but, i feel nobody accepts...
 
#44
@Rish, @lemondew and @serious_trader

Thanks for bringing out a pertinent point.

Now I will describe two situations:

Situ 1: A trader is engaged is job/business full time and spends only 2 hrs per month in front of screen (may be mobile ph screen) ... 1 hr for taking short positions and another 1 hr for covering those. Rest of the days he tracks movement of Nifty and its options on EoD basis (this way he can get out in loss, if need be, on a certain day).

Situ 2: A full time trader spends 9.15 am to 3.30 pm in front of screen daily and is ACTIVELY tracking (i.e. during trading hours) the movement of Nifty and its options. This trader cannot keep patience and thus covers his short position with a relatively small profit. But when loss is booked it is much larger in value. So ... overall he finds it diffucult to make profit. And there is no other income.

COMMENTS: Human mind is an entity which is always thinking something... good or bad / relevant or irrelevant / past or future. So, (and this is very imp) when trader's mind is engaged somewhere away from Stock market, he can watch patiently his own position in Nifty options as an 'outsider', ocassionally 'stepping in' when needed.

Conclusion: A trader who is having full time job or business, has a steady and riskfree income from it, and is much more likely to make net profit from SHORT GUT strategy over a block of 12 months.

Hope u readers appreciate this...

take care,

pos_trader
 

marimuthu13

Well-Known Member
#46
@Rish, @lemondew and @serious_trader

Conclusion: A trader who is having full time job or business, has a steady and riskfree income from it, and is much more likely to make net profit from SHORT GUT strategy over a block of 12 months.

Hope u readers appreciate this...

take care,

pos_trader
very true..atleast for traders who trades only SHORT GUT
 
#47
Hi,

The SHORT GUT strategy did make me give it a thought. here are my points /views towards it.

As i see the greeks, this is a delta neutral / Long TV and Short vega position with ITM strikes. The trader enters to this strategy with the target of Index being range bound and purely earn on the TV and the short Vega.

Lets consider July series for 7500/8700 range with +/-600 movement on spot of 8100, which is possible at the levels we are in, considering Grexit uncertainity, Fed hike in Sep, Mansoon undertainities on the negative side... yet I see a strong support at 8k or 7800 levels with india being a favourate on EM region after china. and rate cut still possible for another 25-50Bps...so purely a macro view for 1.5 Months, giving me the rnage of 7600-8700

1 lot of SHORT GUT giving premium info of +55K ( Rs570 for 7600 strike & Rs536 for 8700 striek) at a margin req. of ~50K. THe levels are ITM, hence the BE levels are 8124

few concerns, that I want to be addressed:
1. with more uncertain scenario globally and domensically, likely nifty will fall... if it calls, Vega and gamma will go against this move and one leg might be exposed. How do you plan to hedge that exposure
2. Theta triggers only towards the last week fo expiry, when this strategy is most effective on TV. else its just purely on the spot movement. How its better than Short straddle in that regard.
3. since both the short positions are ITM, so at expiry, we need to pay huge delivery charges, if held till maturity unlike straddles.

Thanks for sharing your diea. pls clarifty your view on the above.
 

jamit_05

Well-Known Member
#48
Short Gut is Selling :

ITM CE and ITM PE.

Therefore, it is all about taking benefit of the Time Decay, which is around 300 points for two months. For 300 points ITM options.

Risk associated with this spread :

We have to start with a Delta Neutral Spread. This is important in any time decay based strategy.

So, we have pocketed premium on both sides, therefore we have that much cushioning + the time decay cushion.
Therefore, as long there is a 600 point move IN TWO MONTHS in either direction, we are at breakeven.

But when this 600 point range breaks, we start to lose money. And 600 points range breaks at least once or twice each year in two consecutive months.

As a solution.
Whenever the total premium starts getting higher than the shorted premium, you get out of the old spread, and get into the new one at current market levels. And hope that the volatility will be subdued.

Trying to sell more CEs or PEs, could only aggravate the situation. Taking more risk to attend to an earlier risk gone bad, is the worst solution.
 

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