Delta Neutral Strategy (Long Nifty @ Long Puts)

[chheda]

Hi Harish,

Action taken by you on your first trade i.e., buying back 200 call of SP2480 is just fine with me, as it does not expose us with any additional risk. Whereas in the second trade selling 200 Nifty futures is not a good idea at all, as it exposes us to the unlimited upside risk on our short call option.

You could have bought that call also, if you had the opportunity, if not they will come your way, be patience and keep ready with your bait.

The whole concept of Delta Neutral Trade is not to expose you with risk.

Regards,

Wastej

Hi WasteJ ,

Stoploss move down to 2490 for short trade to Breakeven.
Regards
Harish Chheda

 

[[email protected]]

Hi WasteJ ,

Stoploss move down to 2490 for short trade to Breakeven.
Regards
Harish Chheda

Hi Harish,

I am sorry, I could not understand, please tell me again what are you trying to say here in this posting of yours.

Regards,

Wastej

 

[chheda]

Hi Harish,

I am sorry, I could not understand, please tell me again what are you trying to say here in this posting of yours.

Regards,

Wastej

Hi WasteJ ,
When I sell Nifty Fut . at 2490 on friday I put Stoploss of 2510 . then market go down to 2570 on friday . After reading your post I realize about upward unlimited risk Also friday candle was Doji so I decided to move my stoploss down so that if market move upward we have not loosing anything on short trade.

Regards

Harish Chheda

 

[nautilus]

Hi Wastej:

Here is the summary of trades and p/l for today.

1) My buy-stop on 300 Nifty futures which was placed at 2485 was filled on the opening @2490. This makes us net long 200 Nifty futures

2) My buy-stop on 300 short calls(sp2480)@21.55 which was placed at 32.00 was triggered on the opening and was filled at 34.00. This leaves us with no position in the short call(sp2480) - we have no short calls at all.

Closed out profits on futures: (67200+19000+6000) = 92200

Closed out loss on 300 short puts(sp2500) = - 3000

Closed out loss on 200 short calls(sp2480) = - 2490

Total closed out losses = (-3000-2490) = -5490

Open positions p/l:

1) 200 long Nifty futures@2490 (2559.90-2490)x200 = 13980 (profit)
2) 400 short puts(sp2350)@12.50 = (12.50-1.25)x400 = 4500 (profit)
3) 1000 short puts(sp2400)@11.50 = (11.50-2.45)x1000 = 9050 (profit)
4) 300 short puts(sp2480)@21.50 = (21.50-4.15)x300 = 5205 (profit)
5) 2000 long puts(sp2340)@46 = -92000 (loss)

Total p/l (92200+13980+4500+9050+5205-5490-92000) = 27445 (profit)

I am not working any positions at the moment.

Regards

Nautilus

 

[chheda]

Hi WasteJ ,

Trade 2380 (i.e Trade where we Sold Nifty call option SP 2380 on 12th Sep. )

Trade Today :
Buy 200 Nifty Fut . at 2490

To Day's prices (Name : open - high - low - LTP )
Nifty Fut : 2490,2564,2482.6,2559.9
Nifty Put SP 2340 : No Trade Today (Prev. close 2.15)
Nifty Put SP 2350 : 3,3,1,1.25
Nifty Put SP 2360 : No Trade Today (Prev. close 4.50)
Nifty Put SP 2380 : No Trade Today (Prev. close 7.00)
Nifty Put SP 2400 : 5.75,5.75,1.5,1.85
Nifty Call SP 2380: No Trade Today (Prev. close 50.00)
Nifty Call SP 2480: 34,85,32,82.5
Nifty Call SP 2460: 57,71.5,57,71.5

Profit / Loss calc.

Long Nifty Fut
Closed out profit of 32000.00
Plus 200 * (2490 - 2490 ) = 0.00
Plus open profit 400 * (2559.9 - 2347) = 85160.00
Total Profit (closed) 32000.00 + (open) 85160.00 = 117160.00

Long Nifty Put SP 2340
2000 * (2.15 - 46.00) = (Loss) 87700.00

Short Nifty Put SP 2350
200 * (6.50 - 1.25) = 1050.00

Short Nifty Put SP 2360
200 * (26 - 4.50) = 4300.00

Short Nifty Put SP 2380
300 * (21 - 7) = 4200.00

Short Nifty Put SP 2400
1300 * (4.65 - 1.85) = 3640.00

Short Nifty call SP 2380
200 * (104 - 50) = 10800.00

Short Nifty call SP 2460
200 * (29 - 71.50) = (Loss) 8500.00

Total Profit = 117160.00 - 87700.00 + 1050.00 + 4300.00 + 4200.00 + 3640.00 + 10800.00 - 8500.00 = 44950.00

Open Positions :
Long Nifty Future : 400
Long Put SP 2340 : 2000
Short Put SP 2350 : 200
Short Put SP 2360 : 200
Short Put SP 2380 : 300
Short Put SP 2400 : 1300
Short Call SP 2380: 200
Short Call SP 2460: 200

Paid / Collected Primium in options

Long Put SP 2340 : 2000@ 46 : - 92000
Short Put SP 2350 : 200 @ 6.50: + 1300
Short Put SP 2360 : 200 @ 26 : + 5200
Short Put SP 2380 : 300 @ 21 : + 6300
Short Put SP 2400 : 1300 @ 4.65 : +6045
Short Call SP 2380 : 200 @104 : + 20800
Short Call sp 2460 : 200 @29 : + 5800
Total : - 46555.00

The calculation of profit/loss ( i.e. if fut and options expired today )

Long Nifty Fut
Closed out profit of 32000.00
Plus open profit 400 * (2559.9 - 2347) = 85160.00
Total Profit (closed) 32000.00 + (open) 85160.00 = 117160.00
minus
Long Nifty Put 2000 SP 2340 at 46 = loss (92000.00)
plus
Short Nifty put 200 SP 2350 at 6.50 = 1300.00
plus
Short Nifty put 200 SP 2360 at 26.00 = 5200.00
plus
Short Nifty put 300 SP 2380 at 21.00 = 6300.00
plus
Short Nifty put 1300 SP 2400 at 4.65 = 6045.00
plus
Short Nifty call 200 sp 2380 at 104.00 = 200 * (2380+104-2559.9) = (loss) 15180.00
plus
Short Nifty call 200 sp 2460 at 29.00 = 200 * (2460+29-2559.9) = (loss)14180.00

Total Profit = 117160 - 92000 + 1300 + 5200 + 6300 + 6045 -15180 - 14180 = 14645.00


Thanks & Regards

Harish Chheda

 

[chheda]

Hi WasteJ ,

Trade 2480 (i.e Trade where we Sold Nifty call option SP 2480 on 12th Sep. )

No Trade Today :


To Day's prices (Name : open - high - low - LTP )
Nifty Fut : 2490,2564,2482.6,2559.9
Nifty Put SP 2340 : No Trade Today (Prev. close 2.15)
Nifty Put SP 2350 : 3,3,1,1.25
Nifty Put SP 2360 : No Trade Today (Prev. close 4.50)
Nifty Put SP 2380 : No Trade Today (Prev. close 7.00)
Nifty Put SP 2400 : 5.75,5.75,1.5,1.85
Nifty Call SP 2380: No Trade Today (Prev. close 50.00)
Nifty Call SP 2480: 34,85,32,82.5
Nifty Call SP 2460: 57,71.5,57,71.5
Profit / Loss calc.

Long Nifty Fut
Closed out profit of 32000.00
Plus open profit 400 * (2559.9 - 2347) = 85160.00
Total Profit (closed) 32000.00 + (open) 85160.00 = 117160.00

Long Nifty Put SP 2340
2000 * (2.15 - 46.00) = (Loss) 87700.00

Short Nifty Put SP 2350
200 * (6.50 - 1.25) = 1050.00

Short Nifty Put SP 2360
200 * (26 - 4.50) = 4300.00

Short Nifty Put SP 2380
300 * (21 - 7) = 4200.00

Short Nifty Put SP 2400
700 * (4.65 - 1.85) = 1960.00

Short Nifty Put SP 2400
600 * (4.80 - 1.85) = 1770.00

Short Nifty call SP 2480
200 * (33.85 - 18) = 3170.00 (trade closed out)

Short Nifty call SP 2460
200 * (29 - 71.50) = (Loss) 8500.00

Total Profit = 117160.00 - 87700.00 + 1050.00 + 4300.00 + 4200.00 + 1960.00 + 1770.00 + 3170.00 - 8500.00 = 37410.00

Open Positions :
Long Nifty Future : 400
Long Put SP 2340 : 2000
Short Put SP 2350 : 200
Short Put SP 2360 : 200
Short Put SP 2380 : 300
Short Put SP 2400 : 1300
Short Call SP 2480: 200
Long Call SP 2480: 200
Short Call SP 2460: 200

Paid / Collected Premium in options

Long Put SP 2340 : 2000 @ 46 : - 92000
Short Put SP 2350 : 200 @ 6.50 : + 1300
Short Put SP 2360 : 200 @ 26 : + 5200
Short Put SP 2380 : 300 @ 21 : + 6300
Short Put SP 2400 : 700 @ 4.65 : +3255
Short Put SP 2400 : 600 @ 4.80 : +2880
Short Call SP 2480: 200 @ 33.85 : + 6770
Long Call SP 2480: 200 @18.00 : -3600
Short Call SP 2460: 200 @ 29 : + 5800
Total : - 64095

The calculation of profit/loss ( i.e. if fut and options expired today )

Closed out profit of 32000.00
Plus open profit 400 * (2559.9 - 2347) = 85160.00
Total Profit (closed) 32000.00 + (open) 85160.00 = 117160.00
minus
Long Nifty Put 2000 SP 2340 at 46 = loss (92000.00)
plus
Short Nifty put 200 SP 2350 at 6.50 = 1300.00
plus
Short Nifty put 200 SP 2360 at 26.00 = 5200.00
plus
Short Nifty put 300 SP 2380 at 21.00 = 6300.00
Plus
Short Nifty Put 700 SP 2400 at 4.65 = 3255.00
Plus
Short Nifty Put 600 SP 2400 at 4.80 = 2880.00
plus
Short Nifty call 200 sp 2460 at 29.00 = 200 * (2460+29-2559.90) = (loss) 14180.00
plus
Short Nifty call 200 sp 2480 at 33.85 +Long Nifty Call SP 2480 at 18= 200 * (33.85 - 18) = 3170.00

Total Profit = 117160 - 92000 + 1300 + 5200 + 6300 + 3255 +2880 - 14180 + 3170 = 33085.00

Thanks & Regards

Harish Chheda

 

[[email protected]]

Hi Nautilus,

You have done a commendable job by turning your losses into decent profits. I hope in the process you have learned few things. Your profit should increase further by the end of expiry day. This will be close to Rs.37,000.00. Not bad for one month of work despite the fact that market behaved like a roller coaster and we were wrong not only once, but have been wrong constantly.

Now you believe, that to a good trader the market is nothing but a regular source of income. In such strategies the candles, TA, rumors, hot tips have no room and all. More over one should not have any bias at all. One should go into the trade with the open mind.

One comment I would like to offer here that the profitability would have at least four times more, if Nifty had orderly move, up, pause, correction and than up, pause and correction etc., --in this fashion.

For the time being we are happy with what ever the market gives us.

I would like you to let all the readers no the total outlay on this trade and the percentage of profit you were able to make. Use 10% margin requirement figure while calculating return percentage, please.

Thank you

Regards,


Wastej

 

[[email protected]]

Hi Harish,

You are dong just fine. Keep it up. Once the trade end on the expiry day of the options, the question and answer session will start. Please make notes of all the questions you would like to be answered.

Keep in mind that market is going to be highly volatile before the expiry of the options, thus giving the trades ample opportunities to make money. So be ready with your bait and go for bigger money. Once you have stacked up decent profits, you can assume little risk in order to have more profits. So go for it.

Regards,

Wastej

 

[[email protected]]

Hi Nautilus,

You can sell ATM nifty future call (200) and collection some extra money. If there is still premium at 2570 or 2580 than you can go at higher strikes. By doing this you are not going to loose the profit your futures have already made. On the down side you will be protected to the extent of premium collected.

So go for it.

Happy Trading,

Wastej

 

[[email protected]]

OPTION STRATEGY FOR TODAY

Call Option: A contract between the buyer and the seller whereby the buyer has the right, but not the obligation, to purchase a specified stock, commodity, futures contract or cash index at a fixed price on or before a specified date.

Wastej