Thoughts and Trades on Options

[munde_77]

Re: Day trading Nifty Futures

Mundeji, your strategy is very interesting. But why only BNF and not NF . Somebody had already requested for a similar strategy on NF. Seems you have missed it. Please look into it in your free time.

The IV is alway high in bnf than nifty so more premium for options I will reply more tomorrow

 

[munde_77]

Re: Day trading Nifty Futures

St Sirji

I prefer the following strategy

Buy ITM Call which have delta almost 1

Buy ATM Put This month

Sell ATM/Otm Call Next month


Even there strategies of adjustment for these type of trades here to bring our trade to bring from loss to negligible/small loss.
We need not wait till expiry.

Theory will show different picture. We can exit if market moves around 200 or 300 points on upside. If it goes down , the trade can be further adusted by bear spread etc
There manys ways to adjust. I dont know how to explain it properly

 

[munde_77]

Re: Day trading Nifty Futures

Agreed Nifty does not go up/down 500 points in 1 day. But it can do that in one month .But with large swings up/down it becomes difficult to manage.

I am looking at options for trading with a large quantity so the risk and reward has to well defined.

But will see if I can modify the strategy to suit my risk tolerance.

ST

COSTLESS COLLAR, SOUNDS INTERESTING

One can try this one. It works in USA markets. I think it is difficult to work in our market as there is no liquidity for leap calls/puts



http://www.theoptionsguide.com/costless-collar.aspx

 

[munde_77]

Re: Day trading Nifty Futures

Mundeji, your strategy is very interesting. But why only BNF and not NF . Somebody had already requested for a similar strategy on NF. Seems you have missed it. Please look into it in your free time.

This is just an example.


Sell 1 lot Jan Calll 6500 at................

Sell 2 lot Jan Put 6200 at .............

Sell 2 lot Jan Put 6100 at ....................

Buy 4 lot Jan Put 6000 at ..............

 

[Smart_trade]

Re: Day trading Nifty Futures

Based on Friday prices, the trades will look as under :All Jan Expiry

1) Sell 50 Ban CE 6500 @ 52...............2600

2) Sell 100 PE 6200 @48.....................4800

3) Sell 100 PE 6100 PE @29 ................ 2900

4) Buy 200 PE 6000 @ 17 .................(-) 3400

Total Premium received 6900

Munde ji, please tell us what action to take when Nifty becomes 6500...6600...6700

and also in case it becomes 6200,6100,6000 etc

Trying to learn the way to manage it in actual trade.

Smart_trade

 

[munde_77]

Re: Day trading Nifty Futures

Based on Friday prices, the trades will look as under :All Jan Expiry

1) Sell 50 Ban CE 6500 @ 52...............2600

2) Sell 100 PE 6200 @48.....................4800

3) Sell 100 PE 6100 PE @29 ................ 2900

4) Buy 200 PE 6000 @ 17 .................(-) 3400

Total Premium received 6900

Munde ji, please tell us what action to take when Nifty becomes 6500...6600...6700

and also in case it becomes 6200,6100,6000 etc

Trying to learn the way to manage it in actual trade.

Smart_trade

We can cover the Lower PE 6200 and bookprofit if nifty closes above 6500 and write 6600 pe. The pe will lose more value than ce if nifty moves up 100 or 150. If more , we will have to do more adjustment.

And we can cover the higher CE of 6500 and book profit if nifty closes below 6200 and write 6100CE. There is nothing to worry much as downside is protected by put back spread ratio. We can keep on doing like that covering lower and writing higher pe if market rises and keep on covering higher ce and writing lower ce.
In more details i will try to explain what i know on Monday.

 

[vssoma]

Re: Day trading Nifty Futures

This is just an example.


Sell 1 lot Jan Calll 6500 at................

Sell 2 lot Jan Put 6200 at .............

Sell 2 lot Jan Put 6100 at ....................

Buy 4 lot Jan Put 6000 at ..............

We can cover the Lower PE 6200 and bookprofit if nifty closes above 6500 and write 6600 pe. The pe will lose more value than ce if nifty moves up 100 or 150. If more , we will have to do more adjustment.

And we can cover the higher CE of 6500 and book profit if nifty closes below 6200 and write 6100CE. There is nothing to worry much as downside is protected by put back spread ratio. We can keep on doing like that covering lower and writing higher pe if market rises and keep on covering higher ce and writing lower ce.
In more details i will try to explain what i know on Monday.

just to track the post...and thank you munde ji...for your strategy and further adjustment suggestions...expecting more explanation from you as you said....

 

[munde_77]

Re: Day trading Nifty Futures

just to track the post...and thank you munde ji...for your strategy and further adjustment suggestions...expecting more explanation from you as you said....

There is vast difference in theory than real time trading In between till expiry Theory will show only the probability how if it expires . We need to do adjustment just like we change gears , apply brakes while driving according to the situation of the speed , place, good road, bad road, raining, mud road , small road etc.

In real time we can do many adjustments before expiry. We need not wait for expiry. Some hold postions for 5 to 10 days, some 10 to 15 day. some hold till expiry. Some do adjustments . I cover current month postion before 10 to 15 days and write next month. It becomes very difficult to adjust if time period is less than 10. days The delta, thetha etc everythng changes very fast in the last 10 to 5-1 days till expiry. Last 10 days is s just like driving car at very high speed and want to control which is difficult. Next Month is just like driving at medium speed and we can control it.

Bye the way can you tell me which software is this.

Actually I have calculation in my mind always. I do it with calculator. But here calculation does not work. It shows probalility at expiry which is quite different from real trading and holding position

 

[munde_77]

Re: Day trading Nifty Futures

So lets have some discussion on next years event:

1.The first will be the tapering news, I think market had already factored in and we may not get huge moves..

2.The General election... Very important factor for Indian market.The investors are expecting Namo to come to power...Can AAP be the spoiler on the national front too??... There will be heavy volatility and the VIX will go high.. In order to catch the big moves and high VIX how to play during election is my question..

Will straddle /Strangle can make profit or will the option writers will win the race...All the expert can comment..

Plz comment karo yaar, Ek tho post serious le itna bada story likha hun...Suggest your views...

Nifty is in sideways for the last three month

31/10/13 ---6295
30/11/13 --- 6225
31/12/13 --- 6355

So Expecting volatility in the coming month
Pre election volatility will be there as lot of news is expected before election
Premium will be high. So it is better to buy when market stays in range 4 to 6 day and when IV index drops. If trading futures and holding overnight trade with covered call or covered put always. Always hedge positions if holding overnight.

For selling options it will be very difficult to control delta. It is very risky if one is not experienced. Also Selling options should be hedged . Try to Move with the trend.

 

[munde_77]

Re: Day trading Nifty Futures

Made around 65% profit Net on capital this year . Hope to make atleast 100 % next year

Lot of margin is required for selling options. In India After selling options margin is required for Hedging and Adjusting also

After much convincing about my trading style

My broker has excluded me from exposure margin after verifying my trades

So need 35 to 40 % less margin :thumb: