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[amrutham]

With the short 25200CE opened, it was very clear as Delta -ve trade given the opening price action.

By adding the 24800PE shorts, are you trying to gain from theta going forward till EoD and more importantly gain from the IV's collapsing on both positions or is it just a hedge trade bcos currently you are delta neutral and short on the above two greeks?

Edit: I've tried that few times, when sudden mkt moves are opp. to expected nature, huge spikes in IV occur that you can short and benefit from.
but I prefer on very large IVs, when its +30 on BN for eg.

Short 24800 PE is taken as a hedge to Short 25200 CE position. My idea is to keep the total premium. Total combined premium is around 100 and I am safe in the range 24700 - 25300.

Will keep the positions open until BN is in range 24800 - 25200 . If it breaks this range, will adjust accordingly.

 

[newmanin]

With the short 25200CE opened, it was very clear as Delta -ve trade given the opening price action.

By adding the 24800PE shorts, are you trying to gain from theta going forward till EoD and more importantly gain from the IV's collapsing on both positions or is it just a hedge trade bcos currently you are delta neutral and short on the above two greeks?

Edit: I've tried that few times, when sudden mkt moves are opp. to expected nature, huge spikes in IV occur that you can short and benefit from.
but I prefer on very large IVs, when its +30 on BN for eg.

travi- love you for this technical analysis with your feedback. 1000 thumbs up..

 

[amrutham]

Short 24800 PE is taken as a hedge to Short 25200 CE position. My idea is to keep the total premium. Total combined premium is around 100 and I am safe in the range 24700 - 25300.

Will keep the positions open until BN is in range 24800 - 25200 . If it breaks this range, will adjust accordingly.

Bought back both the positions 24800 PE @18 and 25200 CE@11

 

[optionwriter]

why u square off your position earlier ? any intuition reason?

 

[amrutham]

Below is the expiry day trade taken.

Buy 25000 CE 600 Qty @64
Sell 25100 CE 1200 Qty @27

Trying to buy 25200 CE 600 Qty, but Zerodha is not allowing me.
NFO LIMIT ORDER failure Status:rejected Rejection Reason: RMS:Rule: Option Strike price based on Ltp percentage

Now this position does not have any protection on upper side.

 

[amrutham]

Below is the expiry day trade taken.

Buy 25000 CE 600 Qty @64
Sell 25100 CE 1200 Qty @27

Trying to buy 25200 CE 600 Qty, but Zerodha is not allowing me.
NFO LIMIT ORDER failure Status:rejected Rejection Reason: RMS:Rule: Option Strike price based on Ltp percentage

Now this position does not have any protection on upper side.

Closed both the positions since unable to buy protection.

 

[amrutham]

why u square off your position earlier ? any intuition reason?

No specific reason. These options have decayed so much and do not want to take risk for the small remaining premium.

 

[travi]

No specific reason. These options have decayed so much and do not want to take risk for the small remaining premium.

This is key that all option traders should have at the top of their minds. In most cases, especially in stocks where vola is higher, ppl tend to gain around 60-70% of erosion and book.
Average booking of 40-50% (theta) prem. erosion is considered very neat, given that you have caught the meat of the sideways pattern on the charts.

Why leave room for unwanted vola on expiries

 

[newmanin]

hi amrutham & ravi(@amrutham @travi

if now take trade- short 25000c & 25200c - X QTY each & buy 25100c - X QTY each

pls advice your expert opinion for this trade. looking to do it now and close before 2:30 whatever the market position.

 

[amrutham]

hi amrutham & ravi(@amrutham @travi

if now take trade- short 25000c & 25200c - X QTY each & buy 25100c - X QTY each

pls advice your expert opinion for this trade. looking to do it now and close before 2:30 whatever the market position.

In this case, your net credit premium is around 50 points. You can take this trade if you think BN expires below or around 25000.

Your max loss also around 50 points.