Advanced Nifty Option Strategies

[Tradr103]

Hi sexy trader! i have a/c in etoro.i have fund in it.will there be any problem if i transfer this fund in to my bank a/c as I have deposited via bank a/c.can you please help me out??

 

[abhi.]

I feel the markets are going down :thumb: I think a heavy Bear crash is around the corner...the world over!

:rofl::rofl:

 

[DanPickUp]

Hi

Every body is free to have his own mind about the market. I hope that the thread now not get's in a: "Where is market maybe heading to" mode. Enough such threads around in the forum, so no need of any more of it.

As the situation is not to clear, you could spend some of the profit made until now to profit from a down or up jump by buying the Nov 5500 put and buy buying the Nov 6000 call. That would be a long, quit delta neutral strangle laid over the short delta neutral strangle. We than have an iron condor.

If the market makes any jump in either direction, one of our long option will make probably 100% and the other one will lose 50%. Not a bad RR and after that probable move is over, we have to analyze the iron condor and decide the next step.

To be there when the move may happen, place sell orders by your broker with limit prices for the long options. This is just for the case when market may only spikes in either direction and then comes back to normal.

http://i48.tinypic.com/9u1bmd.png

Good trading

DanPickUp

 

[singlap]

Good move Dan.
Also , i think its better to square off the original 5600-5900 strangle and long 5500-6000 strangle as suggested by Dan. This will lock and protect the profit from original position against any big jump or fall in the market due to elections and also will put us in a position to make money from new position.

bye

 

[DanPickUp]

Hi

Obama made it and now back to normality. If we made the decision to hedge over night because of the voting, as some expected huge moves of 100 points and more in either direction, we now could sell both long leg with a small loss.

Small loss, as not much happen as there was no big move on either side and so no big add on value on any side.

We also could keep both long legs and look at them as our free insurance or we sell one of them depending on our personal market outlook. If bullish, keep the call and if bearish keep the put.

I by myself would keep the iron condor and would let it expire as it is. Means: No more watching it and implement an other trade.

My job is done in that thread. Hope you got a bit a deeper idea how to trade a short strangle. The one shown here is a winner and you also can implement such trades and be a winner.

Good trading

DanPickUp

 

[DanPickUp]

Hi

http://i48.tinypic.com/282qrkz.png

Did not expect such a drop in the market. Never mind as the iron condor was the right choice to keep and I thought I have not to comment again on it. But as nothing is perfect in trading, I will watch it to the end and you have to do a bit of work by also doing it.

But the situation has very much changed through an other stupid war, started through stupid politicians on one side and stupid hardliners on the other side. Both are not interested to listen to each other and so non of them is in a situation to call him: I have right. Both are wrong and not worth to listen too, but we have to watch it clearly as this could get out of control. :annoyed:

Why can't people talk to each other, forget religions and just act as human beings and friends which just want to live and enjoy there families, friends and make some money to live with? Why is this not possible in today's world? Why?

Now what to do under such circumstances?

First and a muss: We would have to buy back the Nov 5900 call for 1.65. That is more or less 100% profit on that leg. The long Nov 6000 call has to be kept. Our trade then would look some how like the following analyzing picture:

http://i50.tinypic.com/2eyuln9.png

Short Nov 5600 put, long Nov 5500 put and long Nov 6000 call. This are the legs we have after buying back the short Nov 5900 call.

The above graph gives a bit an impression where we are. The vertical line we call Nifty now and if Nifty further moves to the left side, we will get in trouble. If it moves to the right side, we have no loss and would even get in good profit.

The dotted horizontal line is our break even line. On the left side we will tank and on the right side we will get fresh air.

Now what to do not to tank? There is a way to not tank, but it would be once on your side to find the solution. No miracle, just pure option trading and even option oracle should give that possibility to find out that little move (in case OpOracle works now).

Good trading

DanPickUp

By the way: I even just found out a way to be in profit even if market moves further down. But you have to buy back the Nov 5900 call, that is a must. The rest is playing around on the matrix with the actual prices and strategy possibilities you have and you will find the solution.

http://i48.tinypic.com/33my9op.png

My mentor told me once: If you search for trades on the matrix, you will find ways I never showed you. I was absolutely complex the day he told me and I not understood if for a very long time. Today I proudly can say: He told the absolute true.

 

[gmt900]

Dear DanPickUp,
When I try to use OptionOracle,I get this message :
Preferred server not available. Using PlugIn server US (CBOE ) Instead.
I am facing this problem since last ten days or so. In the absence of this software it becomes difficult to analyse advanced option srategies. Could you tell me if this is a universal problem or specific to the NSE server?
Thanks and regards,
gmt 900

 

[DanPickUp]

Dear DanPickUp,
When I try to use OptionOracle,I get this message :
Preferred server not available. Using PlugIn server US (CBOE ) Instead.
I am facing this problem since last ten days or so. In the absence of this software it becomes difficult to analyse advanced option srategies. Could you tell me if this is a universal problem or specific to the NSE server?
Thanks and regards,
gmt 900

Dear Gmt900

As I use OptionVue, I am not able to help you in this case. I checked the thread: "OptionsOracle Data Import Issue" and also there is a member which faces the same problem like you. http://www.traderji.com/options/72474-optionsoracle-data-import-issue.html#post736244

I do not have data input in OpVue from India, instead of CME. When I check option strategies for the India market, I use the option price matrix from your exchange, check the different prices on the different strike levels and put them by hand in to the Opvue matrix. In that way I get the idea how the analyzing picture is looking.

I mean, I can see the problem you face by not seeing these analyzing pictures, on the other hand I can say that it is not 100% needed to trade such strategies.

It surely helps to see this analyzing picture and that specially when the understanding of how options work when being long or short and the understanding in dept of different strategies are not up today or of very little. As it is at the end just a simple math calculation, you also can do the following:

Compare the actual value of all existing options on the put side (Include the loss or profit in it) with the actual value of all the options on the call side. The different you get as a result, is what you are in profit or what you are in loss. What ever position you now add or take out from what ever strike level, you just add or take away this actual option price from that result and that will be your end result at expiry when market conditions stay as they are at the moment you made that calculation.

In the follow up action, you level your losses or profits by just calculating the way explained above. That is why some of option traders not even have a clue where market goes and still make money (Top option trades some times only work with the option greeks, as also every change in the option prices is shown in any of the option greeks)..

Good trading

DanPickUp

 

[gmt900]

Dear Gmt900

As I use OptionVue, I am not able to help you in this case. I checked the thread: "OptionsOracle Data Import Issue" and also there is a member which faces the same problem like you. http://www.traderji.com/options/72474-optionsoracle-data-import-issue.html#post736244

I do not have data input in OpVue from India, instead of CME. When I check option strategies for the India market, I use the option price matrix from your exchange, check the different prices on the different strike levels and put them by hand in to the Opvue matrix. In that way I get the idea how the analyzing picture is looking.

I mean, I can see the problem you face by not seeing these analyzing pictures, on the other hand I can say that it is not 100% needed to trade such strategies.

It surely helps to see this analyzing picture and that specially when the understanding of how options work when being long or short and the understanding in dept of different strategies are not up today or of very little. As it is at the end just a simple math calculation, you also can do the following:

Compare the actual value of all existing options on the put side (Include the loss or profit in it) with the actual value of all the options on the call side. The different you get as a result, is what you are in profit or what you are in loss. What ever position you now add or take out from what ever strike level, you just add or take away this actual option price from that result and that will be your end result at expiry when market conditions stay as they are at the moment you made that calculation.

In the follow up action, you level your losses or profits by just calculating the way explained above. That is why some of option traders not even have a clue where market goes and still make money (Top option trades some times only work with the option greeks, as also every change in the option prices is shown in any of the option greeks)..

Good trading

DanPickUp

Thank you DanPickUp !
I am doing the arithmetic as suggested by you. It's just that the pictorial view gives you more (psychological) comfort.
gmt 900

 

[DanPickUp]

Thank you DanPickUp !
I am doing the arithmetic as suggested by you. It's just that the pictorial view gives you more (psychological) comfort.
gmt 900

Fine. As you now bought back the sold Nov 5900 call for Rs. 1.70, you watch the long Nov 5500 put. At the moment market moves up for a while, which is likely possible at any time now or in the very near future, you sell that long put as we also have around 100% profit on it.

If market moves up to the next strike level of 5600 or even a bit above, you use the profit from that sold put as stop loss money for the short Nov 5600 put.

Let's see how it is going on and then we have a look again to the follow up steps if needed.

Good trading

DanPickUp