High Profit EOD based option Strategy for Advanced Traders
- Thread starter pannalal
- Start date
- Tags advanced strategy eod nifty options
Anupji,
First thing, I am also a novice. However, I genuinely want to help people.
If you want to deal in options, the minimum capital required is Rs. 1 lakh. Sometime, you need to hedge based on the market movement, then you may require more money. So, it is better to have 1.5 lakh. Anybody, less than this, should not touch options.
You can tell me range where you expect the Nifty to be by 28th Nov 2013 and I shall give you strategy from my software.
There are many members here who are highly knowledgeable. You ask them to design a strategy in option such that it works within 30K.
First thing, I am also a novice. However, I genuinely want to help people.
If you want to deal in options, the minimum capital required is Rs. 1 lakh. Sometime, you need to hedge based on the market movement, then you may require more money. So, it is better to have 1.5 lakh. Anybody, less than this, should not touch options.
You can tell me range where you expect the Nifty to be by 28th Nov 2013 and I shall give you strategy from my software.
There are many members here who are highly knowledgeable. You ask them to design a strategy in option such that it works within 30K.
Your method looks very scientific. Great job. Have you published similar numbers for January expiry? I have never written options; only trade futures but want to try options buying and selling. Thanks a lot for this thread.
Ya you are right. It was working in the past and now they really took it away from the net. Sorry for that. Have no alternative webcast link at hand to that specific topic. I do not know your level in option trading. What I can show you in case you do not know it is the following link with different webcasts and many different articles for beginners, intermediate and advanced option traders. I already recommended that link in the past as it is managed from option pros from OpVue. http://discoveroptions.com/public/pages/education/tradingArticles.html Read just one article per day and that will do.
An other link I highly recommend for lovers of option trading and those who want to understand more about option trading is the one from Tom. Tom Sosnoff was the founder of Thinkorswim. https://www.tastytrade.com/tt/ Tastytrade is closed for the holiday. Take your time to watch daily one show. Understand what is told in that show and the next day watch the next one. In that way you slowly learn more about what option trading can do and what tools and theories make sense. Ten years ago we did not have such tools in the net. So today it is much more easy to get such information for free from any corner of the world.
All of you take care / DanPickUp
@LondonVisitor
If you never traded options, hope you did read Pannalal's risk disclaimer. Selling options is not with out risk. So be careful when trying it the first time. Good luck.
An other link I highly recommend for lovers of option trading and those who want to understand more about option trading is the one from Tom. Tom Sosnoff was the founder of Thinkorswim. https://www.tastytrade.com/tt/ Tastytrade is closed for the holiday. Take your time to watch daily one show. Understand what is told in that show and the next day watch the next one. In that way you slowly learn more about what option trading can do and what tools and theories make sense. Ten years ago we did not have such tools in the net. So today it is much more easy to get such information for free from any corner of the world.
All of you take care / DanPickUp
@LondonVisitor
If you never traded options, hope you did read Pannalal's risk disclaimer. Selling options is not with out risk. So be careful when trying it the first time. Good luck.
Ya you are right. It was working in the past and now they really took it away from the net. Sorry for that. Have no alternative webcast link at hand to that specific topic. I do not know your level in option trading. What I can show you in case you do not know it is the following link with different webcasts and many different articles for beginners, intermediate and advanced option traders. I already recommended that link in the past as it is managed from option pros from OpVue. http://discoveroptions.com/public/pages/education/tradingArticles.html Read just one article per day and that will do.
An other link I highly recommend for lovers of option trading and those who want to understand more about option trading is the one from Tom. Tom Sosnoff was the founder of Thinkorswim. https://www.tastytrade.com/tt/ Tastytrade is closed for the holiday. Take your time to watch daily one show. Understand what is told in that show and the next day watch the next one. In that way you slowly learn more about what option trading can do and what tools and theories make sense. Ten years ago we did not have such tools in the net. So today it is much more easy to get such information for free from any corner of the world.
All of you take care / DanPickUp
@LondonVisitor
If you never traded options, hope you did read Pannalal's risk disclaimer. Selling options is not with out risk. So be careful when trying it the first time. Good luck.
An other link I highly recommend for lovers of option trading and those who want to understand more about option trading is the one from Tom. Tom Sosnoff was the founder of Thinkorswim. https://www.tastytrade.com/tt/ Tastytrade is closed for the holiday. Take your time to watch daily one show. Understand what is told in that show and the next day watch the next one. In that way you slowly learn more about what option trading can do and what tools and theories make sense. Ten years ago we did not have such tools in the net. So today it is much more easy to get such information for free from any corner of the world.
All of you take care / DanPickUp
@LondonVisitor
If you never traded options, hope you did read Pannalal's risk disclaimer. Selling options is not with out risk. So be careful when trying it the first time. Good luck.
Most of materials available on net are more focused on profit or loss or probability on expiry date...
is there any material available on options trading system???
I searched could not get enough material
For Example
most of trend following trading systems are designed based the logic
"Cut your losses let you profit run"
Based on this logic
I am holding short Positions on following legs
6100 CE Jan Short
6100 PE Jan Short
6500 CE Jan Short
6500 PE Jan Short
the Purpose of holding short Positions is to get maximum time value
today my stop loss for 6100 pair would 335
that means if Total Premium of 6100 call and 6100 Put exceeds 335 at todays Close I will close my 6100 legs and hold 6500 Leg (currently both legs are in Profit)
I have similar Stop loss for 6500 leg also
I don't know the exact option Strategy name of these trade setups..
I don't know whether it is Option Repair Strategy or not ( Option Repair means adjusting option legs when one have negative Return??)
Dan..... Can you explain or give any link where I can learn similar trading methods ( Such Trailing Stop loss method)??
Last edited:
I got this Article
http://discoveroptions.com/mixed/content/education/articles/movingaverages.html?useHistory=1
Thank you Dan very use full links
:clap:
http://discoveroptions.com/mixed/content/education/articles/movingaverages.html?useHistory=1
Thank you Dan very use full links
:clap:
Hi to every body and to you SaravananKS
I will expand my comment about your above post, so others also can sort out some of there thoughts and maybe questions or diffusions they have about option and option strategy trading.
You have to short strangles on different strikes. That is what you have and how you call that. Acquiring more and more knowledge about option strategies can make sense under certain circumstances. But option trading is not all about option strategies. Option strategies are just a part of it like oil is part of cooking. Get the book " The bible of option strategies" from Guy Cohen. So you have a book at hand you always can use and that will do for quit a while when want to get a bit deeper into option strategies. No need for any other books to get an overview and understanding about that topic. All what is written there is done in a way every one can understand. All the strategies presented there are pure vanilla strategies and not expanded or mixed up with other legs and tools.
Now you ask for some sort of "Option trading system". Simple told: Use a future trading system and instead of futures you trade options with the signals which occur in that future trading system. If the underlying has enough volume on the option strikes and the filled you get are on a high level, you can do that with atm or even itm options. You may are surprised by that answer and if so. what is in your mind about what an option trading system is? To me that is a mechanical system and for that you need TA which is done through/with indicators and math. If you want you even can bring in some common sense to any go or not go in such mechanical systems.
Now let me spot a bit to the next point: What is option trading the way you do it now? It is not based on any TA, isn't it? Can you make profit with it, can't you? You know that answer by your self. So by what you do now, you use other facts and tools instead by what you would do when using a mechanical trading system. By what you do now you use math, you use the option Greeks, you use common sense, you use FA, you have to know the market calendar and so on.
So why this guy is posting so much instead of just giving some simple answers? Here we go:
By what I just posted it should be clear to anybody that we can trade options in different ways. Now the question comes up: Which way do we want to trade those options? Do we want the mechanical way or do we want the non mechanical way. Sort that out and you will know how much more you will need on information to trade options. If you trade them mechanical with atm and itm options, you will not need to learn about option strategies. If you want to do it the other way round, you will need some more time to understand the strategy you want to trade and implement and then concentrate more on such kind of knowledge. Here the above mentioned book will show you between what you can choose. It would go behind the scope to explain all that now here in this place, as I already made an expanded post here.
I am happy to see that SaravananKS has already start using my presented link. Request others which have open questions to use them intensively as the knowledge presented there is of high quality. Take care / DanPickUp
By the way: Here the sun came up, snow outside, so will be a great day.
I will expand my comment about your above post, so others also can sort out some of there thoughts and maybe questions or diffusions they have about option and option strategy trading.
You have to short strangles on different strikes. That is what you have and how you call that. Acquiring more and more knowledge about option strategies can make sense under certain circumstances. But option trading is not all about option strategies. Option strategies are just a part of it like oil is part of cooking. Get the book " The bible of option strategies" from Guy Cohen. So you have a book at hand you always can use and that will do for quit a while when want to get a bit deeper into option strategies. No need for any other books to get an overview and understanding about that topic. All what is written there is done in a way every one can understand. All the strategies presented there are pure vanilla strategies and not expanded or mixed up with other legs and tools.
Now you ask for some sort of "Option trading system". Simple told: Use a future trading system and instead of futures you trade options with the signals which occur in that future trading system. If the underlying has enough volume on the option strikes and the filled you get are on a high level, you can do that with atm or even itm options. You may are surprised by that answer and if so. what is in your mind about what an option trading system is? To me that is a mechanical system and for that you need TA which is done through/with indicators and math. If you want you even can bring in some common sense to any go or not go in such mechanical systems.
Now let me spot a bit to the next point: What is option trading the way you do it now? It is not based on any TA, isn't it? Can you make profit with it, can't you? You know that answer by your self. So by what you do now, you use other facts and tools instead by what you would do when using a mechanical trading system. By what you do now you use math, you use the option Greeks, you use common sense, you use FA, you have to know the market calendar and so on.
So why this guy is posting so much instead of just giving some simple answers? Here we go:
By what I just posted it should be clear to anybody that we can trade options in different ways. Now the question comes up: Which way do we want to trade those options? Do we want the mechanical way or do we want the non mechanical way. Sort that out and you will know how much more you will need on information to trade options. If you trade them mechanical with atm and itm options, you will not need to learn about option strategies. If you want to do it the other way round, you will need some more time to understand the strategy you want to trade and implement and then concentrate more on such kind of knowledge. Here the above mentioned book will show you between what you can choose. It would go behind the scope to explain all that now here in this place, as I already made an expanded post here.
I am happy to see that SaravananKS has already start using my presented link. Request others which have open questions to use them intensively as the knowledge presented there is of high quality. Take care / DanPickUp
By the way: Here the sun came up, snow outside, so will be a great day.
Danji,
You have provided links for very good tools. I have bookmarked these. I verify my calculation from these from time to time just to check that I did not make any serious mistakes in my programs.
There are two questions:
(1) So far, I traded in options expiring in the forthcoming month. For example, I have taken a position for options expiring in Jan 2014. What are your views on options expiring in 2,3 or 6 months. Theortically speaking, the risk is more but I want to know about your practical experience in this regard.
(2) My software has given some peculiar strategies. One example is:
Transaction to be done on 30 Dec 2013 for Base Index at 6316.10
Buy 6300 CE at Price 146
Sell 6500 CE at Price 52.08
Buy 6500 PE at Price 178.25
Sell 6300 PE at Price 77.95
Net Points Received: 194.22
Delta: -0.00449
Gamma: 0.00005
Theta: 0.13947
Vega: -0.05581
Rho: -0.18903
Profit is 5.78 irrespective of index at any value. What is margin requirement and what is the gain in percentage. I know it is difficult to execute (as price keep changing every second) but using automated system we can execute such trades. However, I want to know the net result before executing such strategies.
Many thanks in advance. We are all greatly benefiting from your experience and the way you are explaining options trading. You are also sharing lot of links where lot of useful information is available.
You have provided links for very good tools. I have bookmarked these. I verify my calculation from these from time to time just to check that I did not make any serious mistakes in my programs.
There are two questions:
(1) So far, I traded in options expiring in the forthcoming month. For example, I have taken a position for options expiring in Jan 2014. What are your views on options expiring in 2,3 or 6 months. Theortically speaking, the risk is more but I want to know about your practical experience in this regard.
(2) My software has given some peculiar strategies. One example is:
Transaction to be done on 30 Dec 2013 for Base Index at 6316.10
Buy 6300 CE at Price 146
Sell 6500 CE at Price 52.08
Buy 6500 PE at Price 178.25
Sell 6300 PE at Price 77.95
Net Points Received: 194.22
Delta: -0.00449
Gamma: 0.00005
Theta: 0.13947
Vega: -0.05581
Rho: -0.18903
Profit is 5.78 irrespective of index at any value. What is margin requirement and what is the gain in percentage. I know it is difficult to execute (as price keep changing every second) but using automated system we can execute such trades. However, I want to know the net result before executing such strategies.
Many thanks in advance. We are all greatly benefiting from your experience and the way you are explaining options trading. You are also sharing lot of links where lot of useful information is available.
Danji,
You have provided links for very good tools. I have bookmarked these. I verify my calculation from these from time to time just to check that I did not make any serious mistakes in my programs.
There are two questions:
(1) So far, I traded in options expiring in the forthcoming month. For example, I have taken a position for options expiring in Jan 2014. What are your views on options expiring in 2,3 or 6 months. Theortically speaking, the risk is more but I want to know about your practical experience in this regard.
(2) My software has given some peculiar strategies. One example is:
Transaction to be done on 30 Dec 2013 for Base Index at 6316.10
Buy 6300 CE at Price 146
Sell 6500 CE at Price 52.08
Buy 6500 PE at Price 178.25
Sell 6300 PE at Price 77.95
Net Points Received: 194.22
Delta: -0.00449
Gamma: 0.00005
Theta: 0.13947
Vega: -0.05581
Rho: -0.18903
Profit is 5.78 irrespective of index at any value. What is margin requirement and what is the gain in percentage. I know it is difficult to execute (as price keep changing every second) but using automated system we can execute such trades. However, I want to know the net result before executing such strategies.
Many thanks in advance. We are all greatly benefiting from your experience and the way you are explaining options trading. You are also sharing lot of links where lot of useful information is available.
You have provided links for very good tools. I have bookmarked these. I verify my calculation from these from time to time just to check that I did not make any serious mistakes in my programs.
There are two questions:
(1) So far, I traded in options expiring in the forthcoming month. For example, I have taken a position for options expiring in Jan 2014. What are your views on options expiring in 2,3 or 6 months. Theortically speaking, the risk is more but I want to know about your practical experience in this regard.
(2) My software has given some peculiar strategies. One example is:
Transaction to be done on 30 Dec 2013 for Base Index at 6316.10
Buy 6300 CE at Price 146
Sell 6500 CE at Price 52.08
Buy 6500 PE at Price 178.25
Sell 6300 PE at Price 77.95
Net Points Received: 194.22
Delta: -0.00449
Gamma: 0.00005
Theta: 0.13947
Vega: -0.05581
Rho: -0.18903
Profit is 5.78 irrespective of index at any value. What is margin requirement and what is the gain in percentage. I know it is difficult to execute (as price keep changing every second) but using automated system we can execute such trades. However, I want to know the net result before executing such strategies.
Many thanks in advance. We are all greatly benefiting from your experience and the way you are explaining options trading. You are also sharing lot of links where lot of useful information is available.
Hi,
How did you arrive at those premiums for a future date?
When I used your values in my calculation, the result is a net loss of 466 rupees irrespective of index value considering brokerage.
These premiums are based on today EOD. If index opens on 30th December at the same level, these should be same. There may be minor differences. Anyway, you cannot trade today. So, the date given is 30th Dec 2013.
Different brokers charge different commission. For example, my broker charge Rs. 10 per lot plus transaction charges and stamp duty. So, the total charges will be around Rs. 80. For 5.78 points, I get Rs. 289. So, net profit is still Rs. 200/=. The problem is margin money. If margin money required is Rs. 25,000/=, then you do not get even interest. I think, it is a useless strategy but before discarding it as useless, I wanted an expert opinion of Danji. Sometime, what you feel useless might be useful, so why discard without having expert opinion.
Different brokers charge different commission. For example, my broker charge Rs. 10 per lot plus transaction charges and stamp duty. So, the total charges will be around Rs. 80. For 5.78 points, I get Rs. 289. So, net profit is still Rs. 200/=. The problem is margin money. If margin money required is Rs. 25,000/=, then you do not get even interest. I think, it is a useless strategy but before discarding it as useless, I wanted an expert opinion of Danji. Sometime, what you feel useless might be useful, so why discard without having expert opinion.
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