GOOD PROFIT: Hedged nifty positions with straddle...

[lazytrader]

For Rel money its not more than Rs. 25 for a nifty lot for buy and sell....!
I think is the best one...
Pls comment.... if I am wrong..

RKG Rs.9/lot

 

[vinpiper]

Thanks for the reply.

I was getting charged Rs 100/- per lot at infoline
I am now opening an account at R K Global where charges are Rs 9/- per lot.:thumb:

Will be using the web interface , so that is Rs 110/- pm extra. I am choosing the F&O option only.

Anybody care to comment whether taking the ODIN will be a better option.

Thanks,
Vinpiper

 

[linkon7]

Thanks for the reply.

I was getting charged Rs 100/- per lot at infoline
I am now opening an account at R K Global where charges are Rs 9/- per lot.:thumb:

Will be using the web interface , so that is Rs 110/- pm extra. I am choosing the F&O option only.

Anybody care to comment whether taking the ODIN will be a better option.

Thanks,
Vinpiper

Never trade web based interface... 1 system fault is enough to wipe out a sizable profit...
go for Odin... they'll charge u 330 extra... but execution is faster...

 

[skgarg]

Hello Linkon

I am planning to go ahead with this strategy of yours. What I have planned is this :

1) I will sell a straddle which is nearest to the current NF Price.

2) Now I will go long and short on Nifty with a 10 point stoploss which I would move up(in case of long) or down(incase of short) with every 10 point move in my favour.

3) When Stopped out, I will place a buy and sell order 5 points above and below that stopped price and would enter the market again either long or short depending upon which price gets hit and wud place SL again according to point 2.

4) I will carry overnight positions. If the next day, market gaps in my favour, well and good but if it gaps against me, I will wait for a 5 point move further against me.(For eg: I am holding longs at 4750 and next day market opens at 4730, so I put a SL at 4725. If market rises to 4740, I bring up the SL to 4740 and keep a 10 point gap like step 2).

I look for ur comments especially something on point 4(handling gaps). Also if u can tell me about the broker and other services that u are using and some other things u feel like telling

Looking forward to ur reply
Saurabh

 

[linkon7]

Hello Linkon

I am planning to go ahead with this strategy of yours. What I have planned is this :

1) I will sell a straddle which is nearest to the current NF Price.

2) Now I will go long and short on Nifty with a 10 point stoploss which I would move up(in case of long) or down(incase of short) with every 10 point move in my favour.

3) When Stopped out, I will place a buy and sell order 5 points above and below that stopped price and would enter the market again either long or short depending upon which price gets hit and wud place SL again according to point 2.

4) I will carry overnight positions. If the next day, market gaps in my favour, well and good but if it gaps against me, I will wait for a 5 point move further against me.(For eg: I am holding longs at 4750 and next day market opens at 4730, so I put a SL at 4725. If market rises to 4740, I bring up the SL to 4740 and keep a 10 point gap like step 2).

I look for ur comments especially something on point 4(handling gaps). Also if u can tell me about the broker and other services that u are using and some other things u feel like telling

Looking forward to ur reply
Saurabh

Now, from what i have experienced so far, the biggest problem is doubt. whether to hold on or exit. Plus fear of exit. what if i exit and market moves without me...


The best method is to use trend lines and multiple ema which also act as support / resistance points.

Say, u r long and once the trendline is broken, exit and incase it was a small dip and market moved ahead... buy it back without worry.,....

Right now the volatility is very low, so avoid options shorting now.... might backfire badly...

 

[skgarg]

Hi

Thanks for the reply.

How about if I trade with buy/sell orders all the time and always keep a position open for overnight ? I think that shud cover the risk of being outside of the market movement.

Even if markets move far from the straddle point that I have shorted, wont it still be in my favour only as long as I ride the trend with futures.

Say I short 4800, and Nifty goes for a free fall to say 4200 and I am able to ride it with NF, then wont I still be making profit ?

Yes the key thing is always in the position with NF or else if markets makes a big move without me, the short options wud hurt badly.

 

[sibumajumdar]

Dear Linkon, Gd Morn. Iam seriously thinking to enter in opt field with short of STRADLE/STRADLE of the next month of course with recourse to hedging with NF short/long whenever bep arises to protect prem already recd. I wish 2 know which is better straddle or strangle. My novice knowledge says strangle Bcz we get wider range. Plz guide me when 2 enter & for what prem. Pardon me if my submission is too silly.Thanks in adv & happy trade & good wishes 2 ALL...SMuncle

 

[linkon7]

Dear Linkon, Gd Morn. Iam seriously thinking to enter in opt field with short of STRADLE/STRADLE of the next month of course with recourse to hedging with NF short/long whenever bep arises to protect prem already recd. I wish 2 know which is better straddle or strangle. My novice knowledge says strangle Bcz we get wider range. Plz guide me when 2 enter & for what prem. Pardon me if my submission is too silly.Thanks in adv & happy trade & good wishes 2 ALL...SMuncle

straddle and strangle are essentially the same thing....
the objective is to see how far they are giving protection...

e.g.
today, nifty closed at 4900

4900 call of the next month is at 200
while put is at 195.
Thats a total premium of 395,

offering a protection range of 4505 to 5295.


4800 put is at 157
while 5000 call is at 151.
That a total premium of 308.

safety range is 4492 to 5308

Both the cases, you get protection for the same range but straddle pays you more...

 

[lazytrader]

straddle and strangle are essentially the same thing....
the objective is to see how far they are giving protection...

e.g.
today, nifty closed at 4900

4900 call of the next month is at 200
while put is at 195.
Thats a total premium of 395,

offering a protection range of 4505 to 5295.


4800 put is at 157
while 5000 call is at 151.
That a total premium of 308.

safety range is 4492 to 5308

Both the cases, you get protection for the same range but straddle pays you more...

But straddle will always have one leg expire ITM so you will have to give back some. If you are not sure about the expiry range and want take less risk then strangle will help since it has a wider range but at the end it's a pay-off between Risk and Reward.

At the moment it looks like 5000 straddle is good for oct but in a month anything can happen so in that case you might have to shift to a higher strike to avoid losing money on the straddle. If you go for a 5000-5200 strangle then you'll get more room. It's pretty much the same thing.

 

[linkon7]

But straddle will always have one leg expire ITM so you will have to give back some. If you are not sure about the expiry range and want take less risk then strangle will help since it has a wider range but at the end it's a pay-off between Risk and Reward.

At the moment it looks like 5000 straddle is good for oct but in a month anything can happen so in that case you might have to shift to a higher strike to avoid losing money on the straddle. If you go for a 5000-5200 strangle then you'll get more room. It's pretty much the same thing.

with this strategy...the intention is not to give back anything.

You get paid less for a short strangle than a short straddle. And if the protective range remains the same then i prefer straddle over strangle anytime. I dont mind losing back some premium i received as extra.