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amrutham

Well-Known Member
You didn't take any action when market fell to 28800?

The 29100 butterfly which i bought at 14 points fell to 8. But the 29300 butterfly which i sold at 6 three times fell to 1. So i could hold my position in profit. But i wasn't able to make more than 12 points when market bounced back because i had changed my position to a safer one to play the last hours volatility.
No. Since my max loss was predefined, i thought i could wait till 2:30.
 

amrutham

Well-Known Member
Price is out if range
Generally I encounter this 'Out of range' error frequently on expiry days in Zerodha. This is when I try to buy OTM options as part of butterfly strategy.

My understanding is this error comes when broker level limit is reached for a particular contract. Atleast this is what i heard from Zerodha customer care. They said, I can close my existing positions, but cannot open new positions when this limit is reached.
 

amrutham

Well-Known Member
Dear amrutham/option traders,
Which strategy is good for intraday play...as bf strategy not make money intraday...
Because of the increased volatility due to trade tensions, premium prices are very high and hence dangerous to take any naked options trade, either buy or sell.

I think its better to try credit or debit spreads based on your inclination towards direction.

Since market has fallen continuously for the last one week, I feel a bounce back is due. Hence i have taken a debit spread with BN CEs. In this case, risk is limited to the initial debit.
 

amrutham

Well-Known Member
Sir What is the meaning of "bounce back is due"?
Bounce back is saying that BN can go up from here.

Debit spread with CE means, buying a lower strike CE and selling a higher strike CE of same quantity.

For example, Since BN is taking support near 28900 levels, below debit spread can give profit if BN goes up.

Buy BN 29000 CE @ 330
Sell BN 29100 CE @ 280

Your initial debit is 50 points and your maximum risk is 50 points irrespective of how much BN falls from here. If BN closes above 29100 CE by this expiry, then your total profit is 50 points.

Hence, the risk reward ratio in this trade is 1:1
 
Bounce back is saying that BN can go up from here.

Debit spread with CE means, buying a lower strike CE and selling a higher strike CE of same quantity.

For example, Since BN is taking support near 28900 levels, below debit spread can give profit if BN goes up.

Buy BN 29000 CE @ 330
Sell BN 29100 CE @ 280

Your initial debit is 50 points and your maximum risk is 50 points irrespective of how much BN falls from here. If BN closes above 29100 CE by this expiry, then your total profit is 50 points.

Hence, the risk reward ratio in this trade is 1:1
Hi
I have a doubt in spreads...when we take spreads near to expiry we cannot able to get gud risk to reward.is there any way to get better risk to reward using spreads
 

sridhga

Well-Known Member
Monthly charts and weekly charts suggest downward trend. Daily charts suggest sideways for this week's expiry. I took BNF bearish Put spread. Let us see.

Though, guessing a future price is a fool's errand, I still would like to predict that BNF is closing below 28800 this Thursday. I may be wrong as well.

I hope, I am not hijacking this thread (I hope I am not deviating from its original flow). Please feel free to let me know.
 
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