Originally Posted by munde_77
Sold 300 BNF JAN 11300 PE at 247 and 200 BNF JAN 11600 CE at 272
Sold 300 BNF JAN 11100 PE at 178
Bought 600 BNF JAN 10900 PE at 105
If market closes above 11600 , I will write 11700 or 11800 pe after covering and booking profit in 11300. If market closes below 11300 , i will write 11100 or 11000 ce after coveriing and booking profit in 11600. So likewise i will keep on covering lower strike pe and writing higher strike pe if market rises and if market falls i will keep on covering higher ce and keep on writing lower strike ce
The downside is protected from any unknow crash by ratio backspread. There is difference between Theoritical and real movement of backspread.
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I always keep roughly 300 points in my hand for adjustment on upperside. Also the ratio is sell 1 lot call otm , sell 2 lot put otm again sell 2 lot far otm put and buy 4 lot far far otm put. i.e by ratio backspread downside is protected from unexpected crash. I always keep 1.5 or 2 times more position in put than call andl alway keep distance of 300 points for adjustment.call 250 + put 250 + 250 = 750/2 = 375 so 11300 - 375 is breakeven downside. Meanwhile I will cover calls and keep on writing lower strike price. by covering upper strike price. I dont know how to express or convince as my english is not good
Trading Futures: Indices Vs Individual Stocks