General Trading Chat

[Vipul_84]

Sir, Put ratio spreads is going to make money only if market falls.

As we have bought 1X of 7400 PE at 130 & sold 2X of 7100 PE at 50.

So net cost is : 50*2 -130 = -30

Now if the market rises, our debit will continue at -30 and thats what all we can loose.

If market falls, then

@7300 : 7400 PE at 100 & 7100 PE worthless
@7200 : 7400 PE at 200 & 7100 PE worthless
@7100 : 7400 PE at 300 & 7100 PE worthless
@7000 : 7400 PE at 400 & 7100 PE at 100*2
@6900 : 7400 PE at 500 & 7100 PE at 200*2
@6800 : 7400 PE at 600 & 7100 PE at 300*2 (Break Even)

Below this we will have to have protective hedge. So thats why you wrote that for 100, 200 & 300 points profits, we will have better RR. Is this understanding right?

Ratio spread is one of my most favourite options strategy....there are many ways in which you can manage the trade till its expiry...I trade spreads also...the trade which was mentioned, I have taken in my account.

Smart_trade

 

[Smart_trade]

Sir, ratio spreads is market neutral strategy,so this can be used with both upswing & downswing as well? But looks like profit potential is limited here and its good for regular income type trades. Is this understanding right?

Not a totally market neutral strategy....here I am having mildly bearish view but not too bearish.....profit potential is always limited in any options spread .

Smart_trade

 

[Somatung]

Sir, ratio spreads is market neutral strategy,so this can be used with both upswing & downswing as well? But looks like profit potential is limited here and its good for regular income type trades. Is this understanding right?

No and yes is the answer. No, as you not use puts when you have a slightly more bearish outlook than neutral and yes if you use instead calls the same way like you used the puts for your slightly more bullish outlook than neutral.

Ah I see, I just crossed with ST answers even we do not answer the same way.​

 

[Somatung]

@Vipul_84

Sell three lots or four lots instead two and you will get a credit. As told: Ratio Spreads can be traded in different ways and forms.​

 

[Smart_trade]

@Vipul_84

Sell three lots or four lots instead two and you will get a credit. As told: Ratio Spreads can be traded in different ways and forms.​

I normally dont increase the ratio more than 2:1 because then risk becomes excessive in case the market suddenly breaks down....normal my ratio is less than 2:1 ( 3:2,5:3 etc) In this trade I have chosen strikes 300 points away...if we select 200 points away, we can get a credit...but with current scenarios 300 points gives me more comfort and maneuverablity.


Smart_trade

 

[Somatung]

I normally dont increase the ratio more than 2:1 because then risk becomes excessive in case the market suddenly breaks down....normal my ratio is less than 2:1 ( 3:2,5:3 etc)

Smart_trade

Individual choice and absolute fair, as there are so many ways to play the strategy even with different risk management ideas beside the one you also mentioned in the post where you presented the trade.

Take care / Dan​

 

[eku]

Looks ok.prima facie...but I am managing my daytrade, position trades, options trades so not seen in details.....but in 60 min follow normal pivot....not visual pivots.

ST

Chart pleases Da..so we'll get some clue on 60tf.

 

[lemondew]

deleted post

 

[Trade_Artist]

Sir

It would be very nice to read your trading journey. How you started, what was your learning approach, your learning resources, the major milestones you achieved, the mistakes you made which taught you valuable lessons and anything that you think important during this journey.

Please post it whenever you get time.

Sir, Please oblige us when you get in mood of reminiscing your old learning days...

 

[Smart_trade]

Sir, Please oblige us when you get in mood of reminiscing your old learning days...

I will not be doing that because such writings will bring plenty of negative vibes suck as jealousy,hatred and also undue importance to personality and I feel principles are more important than personalities...

I don't want any such negativity .

Smart_trade