A Bird's eye view to a Bull's eye

[jagankris]

Bingo, great going Enygma, I knew it was coming and that too from you, other still could have given it a try.

Ok now how about the second trade.

Regards,

Dear Friends,

How does the below sound:

- How to convert your losers into winners
- Capital guaranteed trading
- Remember someone is watching your trades - how to fool them
- Whatever your expectation - I have a model
- Whatever your risk - I have a mitigation tool

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keep watching...as we go on further...

Regarding the second trade Short 5500 Call and 5600 Put it was profitable till 2.30 I guess.i.e when Nifty was trading around 5480 to 5510 range.
A profit of 10 points in the spread.
Then due to the weekly close the markets tumbled to the bearish pressure and the put premium went up resulting in a loss.

 

[sumeetsj]

Cool stuff from you TNSN2345.
I have always believed (and told people who have mocked me), using various types of instruments one can earn steadily from the markets.
Looking forward for more..

 

[enygma]

If I do 2 + 2,

Your daily TF trade with a bearish bias was expecting 5500 to be broken, since it really does not have much significance on the dailies.
Your intraday TF trade was trying to mitigate for the possibility that it (5500 being broken) will not happen today and if does not happen, to milk the time decays.

Or am I reading too much into it?

E.

 

[vibhunair]

Since I do not trade stock intra day or for short TF, I could not give you trades for stock hence had to given examples on Options, to check participation and preparedness of readers would want someone to comment on my previous post on the trades shown.

Somethings which I am yet to disclose will not only be new (and feel good) but also practical, ready to be implemented with just little homework. Can be used with your existing trading method, system. And all for free. Ok, so need participation.

Regards,

I have absolutely no idea about options and frankly speaking am giving it little time trying to stabilise myself in equity and then move on to derivatives. So at this point of time sorry cant comment on the trades, but neverthless am full ears afterall no harm in trying to learn.
Will participate in the discussion as and when I can..

 

[tnsn2345]

Ok, friends good attempt for the second trade, infact, the second was more easier to analyse than the first (atleast I feel). But good work by Enygma to analyse the first trade almost very accurately.

Yes, the first trade was profitable (but not from the beginning), infact at the day open till 1 hour it was negative to almost 26 points, but since the holding time for this trade was till Tuesday EOD and review time was EOD today this much volalitliy has to be figured in. But in the end the trade was much positive with 46 points. But is this the point....NO....

Ok, the second trade, was quite simple and though you have tried analysing it for holding peirod till expiry, if you relook I had mentioned that it was an intraday trade with closing by EOD today are review period of 1300, 1400 hrs and EOD. This trade focused only on time decay which would have been of max. around 9-10 points at the EOD, had the IV remained constant.

This trade as correctly mentioned was almost in the positive territory since beginning and maginally negative occasionally, ranging from -2 points to + 7 points. Then we had a downside post 1330 hrs and if the trade was held till EOD would have resulted in loss. But is this the point... NO ...

So what is it that I want to demonstrate here. Even for non-options traders this applies. Once I explain the motive to demonstrate these two trades, need be I will demonstarte live equity/stock trade next week, so it may be clear for non-options traders.

Ok, more later tonight.

Regards,

 

[jagankris]

Dear Tnsn,

Most of us here have very little or no knowledge about option geeks and option pricing.

This is some 2 weeks back.

I stopped option scalping as per your advice that one shouldn't trade options with out a proper option S/W.

Once I went long Nifty 5700 call at 30.50 when Nifty was trading at 5450.
Nifty went up to 5467 then came back to 5436 and then went back to 5467.

I was shocked to see Nifty call trading at the same 30.50 Rs@5467.

Then once Nifty crossed 5467 the premium started moving up and when Nifty touched 5484 the Call premium showed 33 Rs.

Why there is no proportionate increase in the Call premium according to the Nifty price ?

How to decide that the option premium is cheap at a particular instance ?

Request to deal about options in detail as you take it forward.

TIA.

 

[enygma]

Intraday option trades, especially "neutral" strategies continue to be my weak point - would wait for the tools part to learn new things here ...

One question I would still have on the intraday trade is this

Given that you initiated the trade at 11, wouldnt it be fair to expect some more amount of gain due to time decay, given that we are close to expiry and on the Friday? I mean shouldnt the expected reward be more than 12 pts or so. If answering this digresses from your flow, you can ignore this one question.

E.

 

[tnsn2345]

Intraday option trades, especially "neutral" strategies continue to be my weak point - would wait for the tools part to learn new things here ...

One question I would still have on the intraday trade is this

Given that you initiated the trade at 11, wouldnt it be fair to expect some more amount of gain due to time decay, given that we are close to expiry and on the Friday? I mean shouldnt the expected reward be more than 12 pts or so. If answering this digresses from your flow, you can ignore this one question.

E.

Sorry friends, was tied up with some work.

Ok, now back to the classroom, my friend 'Enygma' (though his Id suggest he is a puzzle) makes things simpler for me and a big thanks to him for the above post.

He just mentioned about neutral strategies, didn't he. Well it may look like that initially but they are not, infact both are not. Why because when I initiated a setup I had some 'idea' about to movement of the UL (let us say bearish in the first case) as per my decision making system, but I could be wrong, could I be. Yes, we all do make wrong entry decisions, but then how do I ensure that my decision (say bearish) in this case is correct and I am not caught in a wrong move upside. What is an upside move happens, 1) Immediately 2) In the interim period of my holding period??????????

How do than I cut my loss making trade? How? How? How much loss should I take? etc etc (We will talk about portfolio mangement and RM later), so I thought why not take only the correct trades (you think I am insane to make such statement) Well I also thought so initially, but then I thought that I need to develop something which will help me always to get into a right trade..what is it I am talking about? No I am not talking about my decision making system, that is my system, yours could be different. I may, if I think appropriate, may write on it maybe later, or maybe not.

How to then convert your loss making trade at initiation into profit???

.....

 

[tnsn2345]

....

What do you think, do I have any such method to take just the right trades or convert a loss making trade into a winning trade, what is your opinion....
if it is difficult for you to guess, then kindly refer to my earlier two example trades, which appeared to be market Neutral at initiation with my view also mentioning something like that, but I had very specific view on the direction of the market, which was not disclosed...now you would say both the position were good the first resulted in a good profit at the end of the day and the second was good till half time of the day...

In both the cases, what do you think would I have done with the entire setup, would I have kept my longs/ short (of respecitve trades) open through out....????

I have already given some hints, and now if someone could either point out what I want to disclose further would really earn brownie points. I repeat I had a specific view (but maybe since I could be wrong in my view) I had.....and then mid way I .... so ended in substaintail gains at the end of the day more than the respective setups could have given because.........


I eagerly await resposnse from you.

Regards,

 

[tnsn2345]

A couple of you have asked me on Options trading, but unfortunately I will not be able to discuss it here on this thread. Though it is my core area of my short TF trades and also for hedging purpose for long TF stock trades, I had given the above example to drive some point since I couldn't find any thing else and at the same time, wanted to show it live so the eagerness to learn and participate is there.

Options trading (covered, open, writing, options strategies) is itself a vast subject and I guess it may not practically be possible to teach A to Z on this subject on such forums or atleast I am not capable of expressing myself in this forum as there are a lot of things you keep checking different numbers, graphs and not just the graph / price of the UL. It is like flying an jet watching all those funny meters, which can't be done on paper.

Also not many may be interested in Options trading at this point of time as the basic prerequiste for trading them IMO is to have a consistently successful or large stock trading background.

Regards,