People like me can't understand sir. It could be helpful if you explain.
Firstly please don't address me as 'sir'... I am just a fellow trader here and enjoy trading as well as try to enrich my mind psychologically which helps me to deal with my day to day challenges...
Truly speaking I also not understood much about the positions... I guess SarangSood used these levels to show some examples and help people to initiate some thoughts...
however, as you requested... I am trying to throw some light in whatever written in that post in my capacity...
First action:
25200 pe : 4000 @250 [delta -0.5x(+)100 lots averaged]
25100 pe : -4000 @ 205 [delta -0.4x(-)100 lots averaged]
24300 pe: -4000 @ 27 [delta -0.001x(-)100 lots averaged] (deep OTM option... so current delta is near to 0)
Net debit 18*4000 = 72000.
Delta neutral to positive position [-0.5+0.4+01] (neutrality gets disturbed with volatility and needs adjustment as suggested in the post as per volatility)
Initial position is ratio spread... ATM supposedly 25200... presuming BNF expires above 24300... this position will need adjustment if BNF starts moving down wildly...
2nd Action:
Adjustment done due to 'premium start falling with very less bnf movement'
25200 pe : 3720 @250 [delta -0.5x(+)93 lots]
25200 ce : -280@250 [delta 0.5x(-)7 lots]
25100 pe : -4000 @ 205 [delta -0.4x(-)100 lots]
24300 pe: -4000 @ 27 [delta -0.001x(-)100 lots]
Net credit = -68000
Negative delta position
3rd action
25200PE: 4000 @250 (delta 0.5x100)
25100PE: 4400 @205 (delta 0.4x110)
Somewhat delta neutral to positive position... but riskier than the initial position...
A few notes:
The irony is delta has 2 bed partners... they are gamma and vega... these are very very difficult to manage...and monitor or calculate... monsters during volatility
Volatility indicators like ATR is to be understood to gauge what may come... volume indicators like OBV (my favorite) also forecasts what is going on in the market at any given period of time...
apart from these there are congestions... sideways movement... particularly... the conditions 2nd action (above) is initiated... high volatility comes after congestion only... these situations can catch any trader off guard... it may help or ruin the position calling for immediate and drastic adjustments
please study... research... paper trade... do some low budget real trades (1lot each)... build mental strength and knowledge... know behaviour of options during start... mid sessions and expiry... then use your knowledge to rip benefit of option...
Hope this helps my friend... let me know if I can help any further... of course I will if it falls in my domain