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[VJAY]

Entered into below BN position for 14th June expiry.

BN Spot @ 26700

Buy BN 26600 CE 200 Qty @ 172
Sell BN 26700 CE 200 Qty @ 122
Sell BN 27000 CE 200 Qty @ 30

Net Debit =4K

This position is safe until BN 27080

Dear amrutham,
You said earlier that select strickes for BF looking options OI ...how you came these SP selection? are only creteria is total debit is under 20 points?Please share some thought process to selecting SP in this trade

 

[amrutham]

Dear amrutham,
You said earlier that select strickes for BF looking options OI ...how you came these SP selection? are only creteria is total debit is under 20 points?Please share some thought process to selecting SP in this trade

View attachment 25978

Since this is not a long butterfly or short strangle, I am only worried about upside risk. There is no downside risk to this trade.

Even if BN starts going down, I can easily get back the initial debit of 4K.

On upside, max OI is concentrated at 27K. Hence shorted that strike.

 

[anildnr]

Hi team..i have a doubt..how far we can depend on open interest to take our option strategies..as oi is not fixed and can be changed depending on the news and conditions.

 

[amrutham]

Hi team..i have a doubt..how far we can depend on open interest to take our option strategies..as oi is not fixed and can be changed depending on the news and conditions.

You can rely on the OI levels to initiate your trades, but you should be ready to adjust your trades if it is moving out of range.

In the case of BN weekly options, you can get some idea about the range by Tuesday. But if it is any news based movement, then these OI levels will not matter much.

 

[VJAY]

Since this is not a long butterfly or short strangle, I am only worried about upside risk. There is no downside risk to this trade.

Even if BN starts going down, I can easily get back the initial debit of 4K.

On upside, max OI is concentrated at 27K. Hence shorted that strike.

Thanks amrutham.....
SO if this position moves above 26800(as trend is still UT) need to rollup 27000 CE to 27200/27300 am right?In gap up scenerio whats are the plan to adjust this position?one more Q you not looking any chart to follow your trade postions?only option chain do it for you all

 

[amrutham]

Thanks amrutham.....
SO if this position moves above 26800(as trend is still UT) need to rollup 27000 CE to 27200/27300 am right?In gap up scenerio whats are the plan to adjust this position?one more Q you not looking any chart to follow your trade postions?only option chain do it for you all

That depends on the number of days remaining for the expiry.

In this case, since only one day remaining, I think I can afford keeping this leg open until BN reaches 27K.The premium on this will not increase much.

In the case of gap ups in overnight positions, I will book losses if any. Thats why position size is important and currently I am not going above 5-7 lots of naked shorts.

I look at long term charts (1-5 years) to check the support levels in case of stock option trades. But for index options, only the price action, OI levels and RR.

 

[govindheg]

Thank you Sri Amrutham & Anildnr, for your response. It is worth trying but presently I can only do butterfly on mis basis as carrying over position overnight, I am short of capital. Nonetheless I will try and test my luck.
Many thanks and regards
Govind

 

[anildnr]

You can rely on the OI levels to initiate your trades, but you should be ready to adjust your trades if it is moving out of range.

In the case of BN weekly options, you can get some idea about the range by Tuesday. But if it is any news based movement, then these OI levels will not matter

Thank you Sri Amrutham & Anildnr, for your response. It is worth trying but presently I can only do butterfly on mis basis as carrying over position overnight, I am short of capital. Nonetheless I will try and test my luck.
Many thanks and regards
Govind

..you are welcome govind..not sure how much capital you have. But you can try short ce n pe also in mis..if you see the position that i have written above..it is trading at 295 now where as it was at 325 plus in morning.but of course risk wise butterfly is the safe

 

[govindheg]

Thank you Anil ji. Let me try your strategy as well.
Regards

 

[anildnr]

Any reason why the bn premiums are too high for tomorrow expiry? Any news ? Of course premiums are erasing but still at high price