Advanced Nifty Option Strategies

[godmktguru]

I am kiran from bangalore.
t would be better to meet and share the knowledge.I dont know wether i can give contact details in this forum or not. still i am taking chance. my mobile number is 97 41 41 35 71.
Note:Sir since we both belong to same city we would like to meet so only i have posted mobile number.is not for any personal gains or advertisement
Thank you

 

[DanPickUp]

Dear Raknahs

You short strangles and you adjust them by doing it delta neutral. Why delta neutral? Any special reason for that? Not that I say is wrong; I just wonder why you choose to do it in that way.

An other question comes up when reading your post: What makes you thinking or what is the reason you want to monitor this strategy minute by minute? Do you trade an other derivate beside that strategy in the same market at the same time or why this minute monitoring?

Short or long strangles are implemented to not have to monitor the market all the times. As you do it in expiry months, I am clear that you take a higher risk. Why not choose strikes far out of the month, like two or three months and buy them back four or three weeks before expiry. The money could be the same and you really not would have to monitor the way you tell us you do. Buying it back four or three weeks before expiry takes out the oscillation you have with these options in the last few weeks of there live.

Good trading

DanPickUp

 

[DanPickUp]

Nifty Spot 5715.15

Sell Nov 5600 put with: 42.45 and sell Nov 5900 call with: 42.00 =

Short strangle delta neutral.

http://i47.tinypic.com/21bneo6.png

What are you going to do next as you want to stay delta neutral?

 

[DanPickUp]

http://i45.tinypic.com/2urrqso.png

Nifty Spot 5691.40

Nov 5600 put at 48.00
Nov 5900 call at 35.75

We have a profit of Rp 6.25 on the call and we have a loss of Rp. 5.45 on the put.

We not had to watch every minute today Checking the market some times during the day was more than enough.

Question now: We are no more delta neutral. So what do you recommend to do? Should we buy the Nov 5200 put with the profit you made on the call side. As that put would cost around Rp 5.10, we not would need any money for that or should we maybe sell the 6100 call with 7.80 to recover the loss from the put side?

Good trading

DanPickUp

 

[Option.Trader]

http://i45.tinypic.com/2urrqso.png

Nifty Spot 5691.40

Nov 5600 put at 48.00
Nov 5900 call at 35.75

We have a profit of Rp 6.25 on the call and we have a loss of Rp. 5.45 on the put.

We not had to watch every minute today Checking the market some times during the day was more than enough.

Question now: We are no more delta neutral. So what do you recommend to do? Should we buy the Nov 5200 put with the profit you made on the call side. As that put would cost around Rp 5.10, we not would need any money for that or should we maybe sell the 6100 call with 7.80 to recover the loss from the put side?

Good trading

DanPickUp

I really dont get this trade of going on adding to positions. Ultimately you are limiting your profits isnt it? Need to see a payoff chart to visualize where this is heading

 

[DanPickUp]

I really dont get this trade of going on adding to positions. Ultimately you are limiting your profits isnt it? Need to see a payoff chart to visualize where this is heading

Dear Option.Trader

The thread starter has made this post: http://www.traderji.com/options/74905-advanced-nifty-option-strategies.html#post733503.

He told that we have to monitor a minute chart to trade this strategy and he told that he adjust that strangle all the time to stay delta neutral.

I now showed a delta neutral strangle (as he not did) and now it would be his work to say some thing to what is going on.

He has to show his strength of knowledge about this strategy and answering some confusing question with a blink of an eye would prove such knowledge.

But until now, it is only you which made some comments about my what ever questions.

Good trading

DanPickUp

 

[gaurav.agnihot]

hi everyone i want to know about long strangle in nifty is it profitable for every 3 to 4 days ...

 

[DanPickUp]

No adjustment done, as time worked for us over the holiday!!

http://i48.tinypic.com/33c2g4j.png

Nov 5600 put at 40.35 ( 42.45 )
Nov 5900 call at 36.35 ( 42.00 )

Both legs are in profit. Just controlled the position once this day and never adjusted delta neutral.

Good trading

DanPickUp

By the way: This is a paper trade in Indian Market from my side, as the thread owners doe's nothing. I am clear that you say: Ah, only a paper trade, but did you ever test and follow such a strategy for a while?

Guess most never did. Never mind. The follow up here may helps others to test it by them self and then start to trade it live in India. Even it is a paper trade, you will see how time decay nags on the options and that may helps to understand that we not always have to adjust delta neutral. Maybe the moment will come, but until then let us wait.

 

[DanPickUp]

http://i46.tinypic.com/f9nq4z.png

At the moment we are still in profit. Just check the 5600 put and the 5900 call, add the value from both together and discount the entry price and you will have the actual profit.

Until now, the trade was easy to handle. But it will not be all the times like that. It will be like that as long as market stays between our break even points. They are around 5600 and 5900. Check it with your option Oracle software.

At the moment one options get's itm, we have to act. If market moves further down, the 5600 put could get in the money and then we are in danger.

Over the weekend, time decay will be again in our favor.

As there was never any comment about any stop loss in this trade in this thread: How would you set any stop loss (put side and call side) for this strategy. I do not ask for the exact levels, just for ideas how you would do it?

Good trading

DanPickUp

 

[Smart_trade]

http://i46.tinypic.com/f9nq4z.png

At the moment we are still in profit. Just check the 5600 put and the 5900 call, add the value from both together and discount the entry price and you will have the actual profit.

Until now, the trade was easy to handle. But it will not be all the times like that. It will be like that as long as market stays between our break even points. They are around 5600 and 5900. Check it with your option Oracle software.

At the moment one options get's itm, we have to act. If market moves further down, the 5600 put could get in the money and then we are in danger.

Over the weekend, time decay will be again in our favor.

As there was never any comment about any stop loss in this trade in this thread: How would you set any stop loss (put side and call side) for this strategy. I do not ask for the exact levels, just for ideas how you would do it?

Good trading

DanPickUp

Dan,

regarding stoploss on this short strangle trade , I suggest the following :

We have collected 42.45 + 42.00 = 82.45 points as premium. The moment the market trends and the premium of any one leg goes to 82.45, that is our stoploss. So suppose the market goes down and at some point 5600 put starts quoting 82.45 or say 83 , we liquidate both the legs and 5900 call that time may be quoting 20 points...that plus brokerage and taxes is our loss.

This of course is a layman's thinking...would like to know where would you keep the stoploss and how you would handle the trade when it starts going against us...

Happy Trading,

Smart_trade