Trading for Living -- Successfully Completed one year as Full Time Trader

[anildnr]

I am into paper trading this weekly strategy. What i observed that my profit making trade went into loss today. So apart from the observation u posted yo close the trade at 30-40 pts credit.
Is there any other study u performed like closing a trade @ the percentage of max profit for consistent performance.

Hi ..we need to book either small profit or at least we should be having capital to adjust positions and to minimise the losses

 

[amrutham]

Entered into below BN position for May expiry.

BN spot @ 26150

Buy BN 26200 CE 600 Qty @ 131
Sell BN 26300 CE 1200 Qty @ 96
Buy BN 26400 CE 600 Qty @ 67

Net Debit = 131+67 - 192 = 6*600 = 3.6K

Max Loss = 3.6K

 

[Subhadip]

Thanks VJAY.

At present our both trading accounts are with Zerodha only. We have investment account with ICICIDIRECT , but options trading with these many lots, they will kill you with the brokerage. We only use this account for single lot (stock options) trades.

In Zerodha ,some days we face problems while entering the trades. The orders are rejected with some strange messages. For example in Long butterfly, the first two legs go successfully and the third one gives issue. In this case we do not have any other option other than closing all the legs of the strategy. To be on safe side, we wanted to move one of the accounts to some other discount broker.

Regarding margin requirements, I believe its more or less same with all the brokers. I am okay with that. I am not expecting any margin reduction. The only thing is I do not like surprises without any reasoning.

IIFL was used to give only span margin, but they have stopped to give it from June onwards, so option selling was very much profitable there, as half of the margin required by zerodha was needed there..

Now i will also shift to Z or other broker...as margin benefit is not there ..no point of giving more brokergae..i was getting 5 rs per lot in IIFL, later reduced to 2.5 rs per lot

 

[Subhadip]

Entered into below BN position for May expiry.

BN spot @ 26150

Buy BN 26200 CE 600 Qty @ 131
Sell BN 26300 CE 1200 Qty @ 96
Buy BN 26400 CE 600 Qty @ 67

Net Debit = 131+67 - 192 = 6*600 = 3.6K

Max Loss = 3.6K


View attachment 25603

Excellent job my dear friend...

Another interesting point is u r trading with your WIFE....Kas yey hota mere bhi sath.....

 

[sangram1705]

Entered into below BN position for May expiry.

BN spot @ 26150

Buy BN 26200 CE 600 Qty @ 131
Sell BN 26300 CE 1200 Qty @ 96
Buy BN 26400 CE 600 Qty @ 67

Net Debit = 131+67 - 192 = 6*600 = 3.6K

Max Loss = 3.6K


View attachment 25603

When do u prefer entry into expiry trade. Earlier i think you used to enter 2-3 days before expiry.
Do u watch iv before entering or do u think iv is not so important as u have protection legs.
What if the ATM leg is sold? Will we not pocket more premium?
How to choose between call & put? Should we enter call or put based on iv or have u ever tried entering both.
I asked so many questions coz i couldnot figure out how to backtest historical data as i am not from programming background

 

[travi]

When do u prefer entry into expiry trade. Earlier i think you used to enter 2-3 days before expiry.
Do u watch iv before entering or do u think iv is not so important as u have protection legs.
What if the ATM leg is sold? Will we not pocket more premium?
How to choose between call & put? Should we enter call or put based on iv or have u ever tried entering both.
I asked so many questions coz i couldnot figure out how to backtest historical data as i am not from programming background

I'd wait for @amrutham to give a detailed reply although you have to understand the foundation of his trades before hand.

It is simple to explain but executing requires his skill, so let this part be clear.
Referring to his butterfly spreads, they are indeed entered on a directional perspective so if you cant do this properly you'll hit the wall more times than you want.
I assume most of his trades are be based on the highest OI on either side ( ie. Bullish & Bearish) then find a middle ground what can also be called Max Pain and try to center the expiry there and that would also be the center spot of the butterfly.

In spreads like butterfly etc, IV doesn't play much role with the bottom line, it is the Theta and underlying that's more important.

With bullish expiries he may prefer Call spreads and use Put spreads for Bearish expiries. Theta effect is highest on Mon-Tue for weekly BNO and that's where most of his trades originate.

Hope this explains a bit.

 

[gmt900]

There is one more point which may be explained by Amrutham. How to adjust the position when the trade goes against you.

 

[pannet1]

I'd wait for @amrutham to give a detailed reply although you have to understand the foundation of his trades before hand.

It is simple to explain but executing requires his skill, so let this part be clear.
Referring to his butterfly spreads, they are indeed entered on a directional perspective so if you cant do this properly you'll hit the wall more times than you want.
I assume most of his trades are be based on the highest OI on either side ( ie. Bullish & Bearish) then find a middle ground what can also be called Max Pain and try to center the expiry there and that would also be the center spot of the butterfly.

In spreads like butterfly etc, IV doesn't play much role with the bottom line, it is the Theta and underlying that's more important.

With bullish expiries he may prefer Call spreads and use Put spreads for Bearish expiries. Theta effect is highest on Mon-Tue for weekly BNO and that's where most of his trades originate.

Hope this explains a bit.

Brilliant stuff as usual. If only i have the clarity like you .... on things i speak ..... i would have spoken louder.

 

[vijaykumar]

View attachment 24526 creen shot from one of my accounts is attached for your reference.

I would like to learn from you. Regards vijay

 

[sangram1705]

I'd wait for @amrutham to give a detailed reply although you have to understand the foundation of his trades before hand.

It is simple to explain but executing requires his skill, so let this part be clear.
Referring to his butterfly spreads, they are indeed entered on a directional perspective so if you cant do this properly you'll hit the wall more times than you want.
I assume most of his trades are be based on the highest OI on either side ( ie. Bullish & Bearish) then find a middle ground what can also be called Max Pain and try to center the expiry there and that would also be the center spot of the butterfly.

In spreads like butterfly etc, IV doesn't play much role with the bottom line, it is the Theta and underlying that's more important.

With bullish expiries he may prefer Call spreads and use Put spreads for Bearish expiries. Theta effect is highest on Mon-Tue for weekly BNO and that's where most of his trades originate.

Hope this explains a bit.

Thanks a ton for giving precious insights. Completely agree with you that skill is the essence, but with my very little experience i find that there is very little room for adjustments in this debit strategy more important i feel is correct selection of the sold strike.