I keep changing the way i trade ORB. the latest style is what is mentioned in these posts.
For today, I have gone long April OTM Calls, ORB style. There is a Buy Stop open for April OTM Puts if the market reverses. And BTW, yesterday would have been a rocking day for ORB, since only Puts would have triggered.
Not much updates from my side. been busy and so trading slower.
was trading ORB with options the last few days.
what i did was -
1. place buy stops for both March Call and Put. position size decided based on option delta.
2. no SL orders, since the buy stop for Put would act as the limit loss in Call, and vice versa.
3. if both orders executed, then square-off positions EOD.
4. if only one side executed, once in a while check whether the other order is still open, and not cancelled by broker due to "system problems". square=off position EOD
hope is to get a day where only 1 side is executed. this is where the money comes in - if price continues to move in the same direction, and does not reverse much. I did not trail SL to lock in profit. Was lucky to get one such profitable day.
on the other days, when both sides are executed, aim is to get profit when NF closes away from open, and the days candle has a large body.
on most days, i lost, but I lost negligibly compared to the potential profits. on a couple of days, i got profit even though the price did not move much - due to change in premium (puts underpriced in the morning, but overpriced by EOD, etc), and to some extent volatility (vega).
but yesterday, i learnt my lesson - that theta is an enemy. both the orders executed and the price swung both sides, but my mtm was positive only at the extremes, and EOD I squared-off at a loss
Moral of the story: Best not to trade both side style as expiry gets nearer. or trade far month...
was trading ORB with options the last few days.
what i did was -
1. place buy stops for both March Call and Put. position size decided based on option delta.
2. no SL orders, since the buy stop for Put would act as the limit loss in Call, and vice versa.
3. if both orders executed, then square-off positions EOD.
4. if only one side executed, once in a while check whether the other order is still open, and not cancelled by broker due to "system problems". square=off position EOD
hope is to get a day where only 1 side is executed. this is where the money comes in - if price continues to move in the same direction, and does not reverse much. I did not trail SL to lock in profit. Was lucky to get one such profitable day.
on the other days, when both sides are executed, aim is to get profit when NF closes away from open, and the days candle has a large body.
on most days, i lost, but I lost negligibly compared to the potential profits. on a couple of days, i got profit even though the price did not move much - due to change in premium (puts underpriced in the morning, but overpriced by EOD, etc), and to some extent volatility (vega).
but yesterday, i learnt my lesson - that theta is an enemy. both the orders executed and the price swung both sides, but my mtm was positive only at the extremes, and EOD I squared-off at a loss
Moral of the story: Best not to trade both side style as expiry gets nearer. or trade far month...
