The 2% Ledger

[siddhant4u]

BN : Stoploss 20 points doesn't seem much. A single 5 minute bar can be 100 points 3-4 times a day.

If it is 20 points in the option, then I'd recommend fixing the SL in percentage. So, for a 100Rs. option, the SL would be 80 Rs, for 150Rs. option the SL would be 30 Rs. and so on. Trial and error would tell you about fixing the SL.

I use Tradesmartonline (VNS finance) broker. The cost per round trip (using the value plan - 0.007%) is about 1 point (25Rs) for an option upto 150Rs.

View attachment 44421

If I want to buy some option at 100, I would likely place 3 orders - 100, 96 and 92 and SL around 75Rs. Similarly, I would take profit at 110, 118 and then some.

Write options and you might get away with 5 rs stoploss in Nifty. And yes as above pointed by TP bhai, banknifty is more volatile

 

[Raj232]

Write options and you might get away with 5 rs stoploss in Nifty. And yes as above pointed by TP bhai, banknifty is more volatile

Writing options sounds lucrative. Moreover, theoretically one can made steady money.
However, my personal experience as well as other traders, I haven't seen anyone writing options making tons of money except those with huge capital (i.e. 50+ lacs capital)

 

[siddhant4u]

Writing options sounds lucrative. Moreover, theoretically one can made steady money.
However, my personal experience as well as other traders, I haven't seen anyone writing options making tons of money except those with huge capital (i.e. 50+ lacs capital)

Tonns of money is subjective. There is say in hindi “paisa hi paise ko khichata hai”

Those who write options, they target 20-25% max a year which is very good return. In any biz if you want to earn you need to put seed money. Same goes with writing.

 

[travi]

Writing options sounds lucrative. Moreover, theoretically one can made steady money.
However, my personal experience as well as other traders, I haven't seen anyone writing options making tons of money except those with huge capital (i.e. 50+ lacs capital)

Raj bhai, then you must google about the fate of option buyers

 

[siddhant4u]

Raj bhai, then you must google about the fate of option buyers

I read one option writer's view and somewhat agree with him - Option writing is said as 'unlimited risk' but no one says same about option buying as you lose 100% of capital most times , In fact, Option writing has similar risk as Future contract

 

[sridhga]

• Voltas was in the buy mode since 1st June. Some consolidation seems to be taking place now and it can take off in any direction. Wait for the breakout. Direction not yet confirmed.
• DrReddy seemed to have a false breakout on the lower side and has now corrected to the upper side. My earlier reading was only to trade up side and it may move further up today.
• TechM has been on a strong bull run since the beginning of June. However October has been a month of consolidation. It may break out in any direction
• JindalStel has fallen from mid-Aug, but has recovered back some of those losses since mid Sept. It seems to be ready for a new break out. Is this the resumption of the uprun that began in early June? Wait for the breakout.
• Hindalco is similar to JindalStel in pattern formation.
• Glenmark has been sideways since Aug. Look for some breakout from the range
• CadilaHC upswing since Mid-Sept and then a pullback. Now again resumption in the offing? Wait for the breakout
• Biocon has fallen below the lower Bollinger Band. Now will it recover and retrace towards the central band or will it hug the lower band for days?
• BalkrisInd has now come closer to the lower Bollinger Band. Will it bounce up ?
• Lalpathlabs crossed the upside of the band twice. Not likely to be a perfect M, but could be a sideways move? I may not trade any upwards breakout here atleast for now.
• Ipcalabs had a large breakout. Maybe pullback time?
• CholaFin after breakout will it move towards the upperband?

 

[sridhga]

CareRating seems to be breaking out on the upside on daily charts. I think this also confirms with traders who use De Mark method.

Castrol gapped up Could be be ORB trade.

 

[TracerBullet]

In fact, Option writing has similar risk as Future contract

I dont see Future prices going up/down 10+ times, so position sizing and management is completely different.
Tradeoff for regular income is that you have to deal with large black swan events and hope you can 'manage' it. People with seemingly decades of experience have gone down by single event ( ex option selling firm died trading natural gas in recent years and it was big enough atleast to make news in trading circles). That kind of thing is not for me, so i am ok with less consistent returns over short term but more predictable returns over longer term. Tradeoff for very high win rate are large single losses.

Edit - search for OptionSellers.com.

 

[siddhant4u]

I dont see Future prices going up/down 10+ times, so position sizing and management is completely different.
Tradeoff for regular income is that you have to deal with large black swan events and hope you can 'manage' it. People with seemingly decades of experience have gone down by single event ( ex option selling firm died trading natural gas in recent years and it was big enough atleast to make news in trading circles). That kind of thing is not for me, so i am ok with less consistent returns over short term but more predictable returns over longer term. Tradeoff for very high win rate are large single losses.

Edit - search for OptionSellers.com.

they were doing naked selling... even though the owner James cordier has written a book on Option selling (The Complete Guide to Option Selling) which even had section on 'risk management'

Point is, without hedge or stoploss, even future contract has risk to make you poor same as option writing.

Future combined with options (hedge) would be best strategy to mitigate any risk.

 

[sridhga]

https://www.moneycontrol.com/news/b...e-global-generics-business-up-21-6028291.html

The share got hammered after the result. Did not trade today because of the result, although it was on my list.

In general, every share took a beating today.
This morning, I noticed that two shares appeared to be bearish. One is LalpathLab and the other is CESC.

CESC went down, but LalpathLab ended in green.