Advanced Nifty Option Strategies

[SexyTrader]

My 2 cents Isn't it much better....not to hold options over the weekend ?

I mean holding options causes considerable erosion with time! Why would people take that risk, when one can book-profits before the weekend and then buy it immediately after the weekend when it gets cheap again ?

 

[DanPickUp]

Hi

What is Delta Neutral Option trading and how and why do we delta neutral trade? A question many times asked, as delta trading is a bit tricky. Many aspects to understand and to combine.

https://rapidshare.com/#!download|5p7|734897675|Delta.pdf|10747|0|0

I posted that PDF ** in the other thread (Option trading with DanPickUp http://www.traderji.com/options/66266-option-trading-danpickup-5.html#post647575). The PDF explains "The road less traveled" and should clear some questions and thoughts about delta neutral trading.

I also explained in the other thread why to sell options when volatility is high. The trade in this thread was not done with high vola. An other thing nobody ever asked or mentioned, not even the thread starter.

Now to the point mentioned from dear SexyTrader: Holding positions over the weekend.

Taking profit is always good. There is no rule to keep a trade over the weekend as we never are married with any trade. If I keep a trade over the weekend or even over night, I hedge it. This is a fixed rule for me as I am a risk adverse trader.

How you hedge is your choice as there are so many ways to do so. Depending on your way of hedging, time decay can be neutralized. How? The hedged positions should be near each other. Short the Nov 5600 put and long just the next strike level. If done like that, then what the long loses on time decay, the short is winning on time decay. This is just a very simple explanation, as depending on other ways of hedging, we would have to look differently at it (Going long far out of the month options, going long more itm options and so on).

Good trading

DanPickUp

** The writer from that pages is Paul Forchione http://www.oahucapital.com/index.php/paul-forchione

 

[Smart_trade]

My 2 cents Isn't it much better....not to hold options over the weekend ?

I mean holding options causes considerable erosion with time! Why would people take that risk, when one can book-profits before the weekend and then buy it immediately after the weekend when it gets cheap again ?

We were holding a short strangle position. We want the time decay over the weekends as it works in our favour.

Smart_trade

 

[timepass]

Is Delta Neutral a nice way to park your money for a few days ? Here in India, the financial year ends on 31st March. Suppose I wanted to park some money on 29th March and take it back on 2nd of April, just for juggling funds... How's that ? Selling options does block up a large amount of capital, thus showing reduced profits in the Balance sheet .

How's that ?

 

[DanPickUp]

Guess to discuss here any thing more about any delta neutral trading is lost time as you have to much margin and any way not can trade options sophisticated as the exchange not offers it.

 

[summasumma]

Guess to discuss here any thing more about any delta neutral trading is lost time as you have to much margin and any way not can trade options sophisticated as the exchange not offers it.

Exactly the point for indian market...!

But can be discussed for educational purpose or for people trading in US markets from India...

 

[timepass]

Guess to discuss here any thing more about any delta neutral trading is lost time as you have to much margin and any way not can trade options sophisticated as the exchange not offers it.

Nope. The effort is to make the best of the available opportunities and the strategies to use them.

 

[knarendra]

How much Margin is reqd. to sell the option? Which broker bought minimum Margin?
If we write ATM option and OTM option how much we paid as margin?

 

[DanPickUp]

Nope. The effort is to make the best of the available opportunities and the strategies to use them.

Ok.

http://i47.tinypic.com/vfkvfm.png

Next you could do is to buy back the short Nov 5900 call and with the win of 15.35 Rp you buy the Nov 5400 put for 14.90 Rp. In that way you will have a put credit spread, in case the market really drops.

An other way is to roll down your call leg by buying the call back and selling the Nov 5800 call. Now you are almost again delta neutral.

Or you do both and you have an insurance for free.

Good trading

DanPickUp

 

[muinali]

timepass sir,danpickup sir,summasum sir and other online options trader
is there any alternative of "optionoracle" .help me ? wtching you people are minting money from option trading .keep on going..........