Low Risk Options Trading Strategy - Option Spreads

Not just watching Level II quote.. but interpreting them and making sense out of those changing numbers.

I know how many traders watch Level II screen but not able to go beyond that orderflow and understand the message coming out from there.

That is a skill which I want to develop. but keep giving myself excuse that it is only for scalper, not for me. Maybe someday I get over my lame excuse and spend time in understanding it.

By the way, do you know where can we get realtime Level II data for NIFTY Futures ?
I depend on orderbook screen of my brokers platform..
In my view, that does not give correct picture. It will not show the market orders that are getting filled at a moment cause they get filled before the screen is refreshed. If I place Trigger + Market order, it will never come on the orderbook but as soon as trigger is hit, it gets executed.
So you end up seeing only the limit orders of semi -professional daytraders.. not actual execution flow at exchange server.

Happy Trading.

Don't know about realtime LevelII quotes.

I read somewhere that ODIN gives you direct market access. There's ECN - Interactive brokers. can they give realtime L2 quotes?

Now with August contract expiry behind us, it is time to look at these two trades and make few observation.

The check the attached picture below that shows the track record of both trades for each day. (appologies if any of the number is not accurate.. but they are fairly close to perfect)

Both the trades turn out positive for us, exactly as planned . Thanks you market for respecting our trades and rewarding us.
As per plan, we would have taken action only when net value had come close to our stop.. which did not happen and we had to just sit and enjoy the ride.

Trade 1 Max Drawdown has been -7% which could have been approximately -20 or -30% for naked 42C/ 44C long position on 19/Aug.

Trade 2 We know that the real value of the spread is just 100 Rs. but due to market inefficiency, Surpisingly this Strategy was fetching 110 Rs on 25/Aug.. i.e. 10% more then its maximum value. I would have preferred to book profit cause market is giving me extra money here.
Worst Drawdown has been -6% which could have been approximately -20 or -40% for nakaed 42C/ 43C long position on 19/Aug.

Fluctuation in the value of these trades have been in the range of - 6% to +13% .. which is quite smooth considering the wild moves , false breakdown etc that we had seen in last 7 days. Certainly that helps in keeping the blood pressure low.

Thats end of these two trades. Profit or Loss, all due to the market. and as a trader, we move on to search next low risk opportunity.
Hope this has given you clear idea about how to plan and analyse an option trade.

Happy low risk option Trading

Hy

I got a telephone today, which means I will go West. I will leave Asia next week and I will go to Switzerland and then Austria. I will have no time to be with you in traderji.

Business is business and I need time to relax beside that.

Maybe some times just jump in and say hello. I will try to keep up the Holy Grail and will post there some little bit.

To you lazytrader : It seems to me, that you really make progress and have the interest to learn the business of option trading. It is a way with a lot of stones to put away. I will post a link in the HG which leads you to Paul Forchione. All my knowledge is mainly build up on his basis. If you can afford to order any learning stuff from, I highly recommend.

In the page from the link, you see on the right side : Weekly Options Trading Report.

Just download it. It gives you a better Idea, what all kind of strategies you can implement in the market under any circumstances. He gives you an Idea, how you can make a business plan for every trade you plan. And you have to make an own plan for every strategy you want to implement in the market.

You also will see, how the analyze picture looks and that is why I also say: Try to get the right analyze software and take a mentor or writer, who explains his strategies with this software.

You have to implement every trade over your chart picture, means, It also would be more than good, that you have a charting software like Metastock or so on.

He lazytrader, I think, that you are on the right road and do not give up. You will have times, you go back in your office and F and F and why did I not make it.

You have to get used to it. It is part of learning. Recover, have a look, that your inside feelings are again ok and make your next trade.

One Idea to the PDFs from P. Forchone. Test, If you can make out of his recommended trade a better one. This was a sport for my old mentor, and I think, that is one reason, why he has so many strategies in his head.

In one of the last posts, we started to talk about the synthetics. Try to find a mentor which is going to teach that stuff. A synt call and synt put are just the basics there. But this will be no more free, because this is the highest level you can get in option strategy trading and no pro will give this away for free .

AW10; What can I say. You are a very friendly and open minded person with a hell of patient. I really hope, that all the members in traderji know, what you give to them. It is not something. It is knowledge from the best.

I wish you a full retirement account, you have my highest respect and like I say, I may sometimes jump in and say hello.

I think, that I gave in my way, what I could give to traderji and to this thread.

Thank you to all the other nice persons, who gave me a lot of thanks. ( terminator123 / pasha / tvrssk / darkstar / Sunn1 / leo_3455 a.s.o )

I will say BY BY with that :

http://www.youtube.com/watch?v=3WJhcEnBM70&feature=channel

Take care

Regards and good trading