High Profit EOD based option Strategy for Advanced Traders
- Thread starter pannalal
- Start date
- Tags advanced strategy eod nifty options
None of us are experts. Just we are trying to find some strategies so that all of us can be benefited. I shall give different strategies so that traders can choose according to their style. To keep the spread in the range between bid and ask prices, the key things are:
(1) Take strike price multiple of 100. The volumes in 6150, 6250 etc. are very less
(2) The premium price should be less. If premium price is 700 or 800, there will be always gap between bid and ask.
Though, above constraints will reduce the profit, it is important to give strategies that are practical and can be traded.
(1) Take strike price multiple of 100. The volumes in 6150, 6250 etc. are very less
(2) The premium price should be less. If premium price is 700 or 800, there will be always gap between bid and ask.
Though, above constraints will reduce the profit, it is important to give strategies that are practical and can be traded.
I have given the following trade to be done on 5th Nov 2013 at the beginning of the thread:
Transaction to be done on 05.11.2013 for Base Index at 6317.35:
Buy 6600 CE at Price 24.40
Sell 6400 CE at Price 87.25
Sell 6500 CE at Price 49.50
Net Points Received: 112.35
Today (19 Nov 2013), I checked the price around 1:22 PM, and the prices were as follows:
Sell 6600 CE at +0.65
Buy 6400 CE at -9.10
Buy 6500 CE at -1.90
Net Points Paid: 10.35
So, the net points gained in 14 days are around 102 points.
14 days Rs. 5,000 profits on investment of approx Rs. 44,000/=.
Transaction to be done on 05.11.2013 for Base Index at 6317.35:
Buy 6600 CE at Price 24.40
Sell 6400 CE at Price 87.25
Sell 6500 CE at Price 49.50
Net Points Received: 112.35
Today (19 Nov 2013), I checked the price around 1:22 PM, and the prices were as follows:
Sell 6600 CE at +0.65
Buy 6400 CE at -9.10
Buy 6500 CE at -1.90
Net Points Paid: 10.35
So, the net points gained in 14 days are around 102 points.
14 days Rs. 5,000 profits on investment of approx Rs. 44,000/=.
Transaction to be done on 29 Nov 2013 for Base Index at 6106.30
(Nifty closed at 6091.85 but Option Chain is based on index 6106.30)
Buy 6600 CE at Price 13.23
Sell 6300 CE at Price 73.97
Sell 6400 CE at Price 44.55
Net Points Received: 105.29
Delta: -0.48821
Gamma: -0.00152
Theta: 3.97090
Vega: -8.50396
Rho: -2.12734
Profit for Index less than or equal to 6300 on 26 Dec 2013 is 105.29
Profit for Index equal to 6350 on 26 Dec 2013 is 55.29
Profit for Index equal to 6400 on 26 Dec 2013 is 5.29
Loss for Index equal to 6450 on 26 Dec 2013 is -94.71
Loss for Index equal to 6500 on 26 Dec 2013 is -194.71
The actual profit depends on the premium paid and received.
Very Important:
Either do not enter into trade, if enter, be sure to make all the three trades at one go. If you do two trades and miss one trade, then this strategy might result into huge losses. So, this is not for novice but only for Advanced Traders.
Disclaimer:
I shall not be responsible if anybody does any trade based on the above guidance. The above strategy is only for advanced traders (and not for novice). I do not share your profit so not ready to share the loss.
(Nifty closed at 6091.85 but Option Chain is based on index 6106.30)
Buy 6600 CE at Price 13.23
Sell 6300 CE at Price 73.97
Sell 6400 CE at Price 44.55
Net Points Received: 105.29
Delta: -0.48821
Gamma: -0.00152
Theta: 3.97090
Vega: -8.50396
Rho: -2.12734
Profit for Index less than or equal to 6300 on 26 Dec 2013 is 105.29
Profit for Index equal to 6350 on 26 Dec 2013 is 55.29
Profit for Index equal to 6400 on 26 Dec 2013 is 5.29
Loss for Index equal to 6450 on 26 Dec 2013 is -94.71
Loss for Index equal to 6500 on 26 Dec 2013 is -194.71
The actual profit depends on the premium paid and received.
Very Important:
Either do not enter into trade, if enter, be sure to make all the three trades at one go. If you do two trades and miss one trade, then this strategy might result into huge losses. So, this is not for novice but only for Advanced Traders.
Disclaimer:
I shall not be responsible if anybody does any trade based on the above guidance. The above strategy is only for advanced traders (and not for novice). I do not share your profit so not ready to share the loss.
Transaction to be done on 29 Nov 2013 for Base Index at 6106.30
(Nifty closed at 6091.85 but Option Chain is based on index 6106.30)
Buy 6600 CE at Price 13.23
Sell 6300 CE at Price 73.97
Sell 6400 CE at Price 44.55
Net Points Received: 105.29
Delta: -0.48821
Gamma: -0.00152
Theta: 3.97090
Vega: -8.50396
Rho: -2.12734
Profit for Index less than or equal to 6300 on 26 Dec 2013 is 105.29
Profit for Index equal to 6350 on 26 Dec 2013 is 55.29
Profit for Index equal to 6400 on 26 Dec 2013 is 5.29
Loss for Index equal to 6450 on 26 Dec 2013 is -94.71
Loss for Index equal to 6500 on 26 Dec 2013 is -194.71
The actual profit depends on the premium paid and received.
Very Important:
Either do not enter into trade, if enter, be sure to make all the three trades at one go. If you do two trades and miss one trade, then this strategy might result into huge losses. So, this is not for novice but only for Advanced Traders.
Disclaimer:
I shall not be responsible if anybody does any trade based on the above guidance. The above strategy is only for advanced traders (and not for novice). I do not share your profit so not ready to share the loss.
(Nifty closed at 6091.85 but Option Chain is based on index 6106.30)
Buy 6600 CE at Price 13.23
Sell 6300 CE at Price 73.97
Sell 6400 CE at Price 44.55
Net Points Received: 105.29
Delta: -0.48821
Gamma: -0.00152
Theta: 3.97090
Vega: -8.50396
Rho: -2.12734
Profit for Index less than or equal to 6300 on 26 Dec 2013 is 105.29
Profit for Index equal to 6350 on 26 Dec 2013 is 55.29
Profit for Index equal to 6400 on 26 Dec 2013 is 5.29
Loss for Index equal to 6450 on 26 Dec 2013 is -94.71
Loss for Index equal to 6500 on 26 Dec 2013 is -194.71
The actual profit depends on the premium paid and received.
Very Important:
Either do not enter into trade, if enter, be sure to make all the three trades at one go. If you do two trades and miss one trade, then this strategy might result into huge losses. So, this is not for novice but only for Advanced Traders.
Disclaimer:
I shall not be responsible if anybody does any trade based on the above guidance. The above strategy is only for advanced traders (and not for novice). I do not share your profit so not ready to share the loss.
Could you indicate possible adjustments to the trade, if required to be done,
like you had done last month?
Thanks,
gmt
The options are expiring on 26 Dec 2013. If by that date, Nifty remains within 6300, you get full premium. Even at 6400, you are not losing much, you are gaining 5 points whereas brokerage, STT may comes to say 10-15 points.
Suppose, Nifty goes below 6100 and remain around that level (or below this level), you keep gaining around 4 points each day. So, if you want to avoid risk, you can close any time after gaining 50 to 60 points or you may wait till 26 Dec 2013.
The main concern is Nifty touches 6300 within a day or two. In that case, theta is not used at all and Delta comes into full swing. So, you may likely to lose around 100 points. However, the simple option is to hedge this by purchasing Future. If Nifty has to move to 6300 or above in a day or two, it has to move at great pace. Whenever, it is making upward move with a great pace, just buy Nifty Future and whatever you are losing in options, you can cover in Future. However, it has to be understood that you can buy Future only if Nifty is moving at a great pace. In any other case, if Nifty starts coming down, you may lose on Future also. So, you have to be careful while hedging with Nifty Future and with proper stop loss. It is very important that if you hedge options with Future, as soon as you cover points through Future, close the options trade and you are either left with little loss or little profit.
If you do not want to take additional risk of Nifty Future, then you can simple close the trade and take the loss. After all, losses are part of trading. The key thing is we need to do 10 winning trades and 1-2 losing trades.
Note: Till date, the highest value of Nifty has gone on the following days:
Highest of High 6357.10 on 8 Jan 2008
Highest of Open 6335.25 on 8 Nov 2010
Highest of Close 6317.35 on 3 Nov 2013.
If you see historical data, Nifty never crossed 6357.10 till date. In any case, you are safe if Nifty reaches 6400 on 26 Dec 2013. But, in stock market, you never know what will happen and when. So, you need to be ready with all the alternatives.
Suppose, Nifty goes below 6100 and remain around that level (or below this level), you keep gaining around 4 points each day. So, if you want to avoid risk, you can close any time after gaining 50 to 60 points or you may wait till 26 Dec 2013.
The main concern is Nifty touches 6300 within a day or two. In that case, theta is not used at all and Delta comes into full swing. So, you may likely to lose around 100 points. However, the simple option is to hedge this by purchasing Future. If Nifty has to move to 6300 or above in a day or two, it has to move at great pace. Whenever, it is making upward move with a great pace, just buy Nifty Future and whatever you are losing in options, you can cover in Future. However, it has to be understood that you can buy Future only if Nifty is moving at a great pace. In any other case, if Nifty starts coming down, you may lose on Future also. So, you have to be careful while hedging with Nifty Future and with proper stop loss. It is very important that if you hedge options with Future, as soon as you cover points through Future, close the options trade and you are either left with little loss or little profit.
If you do not want to take additional risk of Nifty Future, then you can simple close the trade and take the loss. After all, losses are part of trading. The key thing is we need to do 10 winning trades and 1-2 losing trades.
Note: Till date, the highest value of Nifty has gone on the following days:
Highest of High 6357.10 on 8 Jan 2008
Highest of Open 6335.25 on 8 Nov 2010
Highest of Close 6317.35 on 3 Nov 2013.
If you see historical data, Nifty never crossed 6357.10 till date. In any case, you are safe if Nifty reaches 6400 on 26 Dec 2013. But, in stock market, you never know what will happen and when. So, you need to be ready with all the alternatives.
The options are expiring on 26 Dec 2013. If by that date, Nifty remains within 6300, you get full premium. Even at 6400, you are not losing much, you are gaining 5 points whereas brokerage, STT may comes to say 10-15 points.
Suppose, Nifty goes below 6100 and remain around that level (or below this level), you keep gaining around 4 points each day. So, if you want to avoid risk, you can close any time after gaining 50 to 60 points or you may wait till 26 Dec 2013.
The main concern is Nifty touches 6300 within a day or two. In that case, theta is not used at all and Delta comes into full swing. So, you may likely to lose around 100 points. However, the simple option is to hedge this by purchasing Future. If Nifty has to move to 6300 or above in a day or two, it has to move at great pace. Whenever, it is making upward move with a great pace, just buy Nifty Future and whatever you are losing in options, you can cover in Future. However, it has to be understood that you can buy Future only if Nifty is moving at a great pace. In any other case, if Nifty starts coming down, you may lose on Future also. So, you have to be careful while hedging with Nifty Future and with proper stop loss. It is very important that if you hedge options with Future, as soon as you cover points through Future, close the options trade and you are either left with little loss or little profit.
If you do not want to take additional risk of Nifty Future, then you can simple close the trade and take the loss. After all, losses are part of trading. The key thing is we need to do 10 winning trades and 1-2 losing trades.
Note: Till date, the highest value of Nifty has gone on the following days:
Highest of High 6357.10 on 8 Jan 2008
Highest of Open 6335.25 on 8 Nov 2010
Highest of Close 6317.35 on 3 Nov 2013.
If you see historical data, Nifty never crossed 6357.10 till date. In any case, you are safe if Nifty reaches 6400 on 26 Dec 2013. But, in stock market, you never know what will happen and when. So, you need to be ready with all the alternatives.
Suppose, Nifty goes below 6100 and remain around that level (or below this level), you keep gaining around 4 points each day. So, if you want to avoid risk, you can close any time after gaining 50 to 60 points or you may wait till 26 Dec 2013.
The main concern is Nifty touches 6300 within a day or two. In that case, theta is not used at all and Delta comes into full swing. So, you may likely to lose around 100 points. However, the simple option is to hedge this by purchasing Future. If Nifty has to move to 6300 or above in a day or two, it has to move at great pace. Whenever, it is making upward move with a great pace, just buy Nifty Future and whatever you are losing in options, you can cover in Future. However, it has to be understood that you can buy Future only if Nifty is moving at a great pace. In any other case, if Nifty starts coming down, you may lose on Future also. So, you have to be careful while hedging with Nifty Future and with proper stop loss. It is very important that if you hedge options with Future, as soon as you cover points through Future, close the options trade and you are either left with little loss or little profit.
If you do not want to take additional risk of Nifty Future, then you can simple close the trade and take the loss. After all, losses are part of trading. The key thing is we need to do 10 winning trades and 1-2 losing trades.
Note: Till date, the highest value of Nifty has gone on the following days:
Highest of High 6357.10 on 8 Jan 2008
Highest of Open 6335.25 on 8 Nov 2010
Highest of Close 6317.35 on 3 Nov 2013.
If you see historical data, Nifty never crossed 6357.10 till date. In any case, you are safe if Nifty reaches 6400 on 26 Dec 2013. But, in stock market, you never know what will happen and when. So, you need to be ready with all the alternatives.
Today Almost 100 Point Raise in one day this kind of pace continues then it would worst situation for writers
for me ,on that situation i would prefer to close all Positions then adjusting with future since there is no free meals in this market:thumb:
Last edited:
Saravananji,
According to me, there is very strong resistance at 6300 level. So, I don't think Nifty will cross 6300. Even if crosses, the bears will pull down it in due course. But, I 100% agree with you. Instead of taking additional risk, it is wise decision to take loss and close the trades.
If it crosses 6300 and I presume it will come down. Suppose, it keeps going up and your losses are increasing. What will you do? So, it is better to take suitable steps in due course and restrict your losses.
However, I have seen people who successful hedge this position. They just buy Future and as soon they get 70-80 points, closes the Future as well as options. Different people behave in different manner even in the same circumstance based on their nature. My personal choice is to close the trade, take the loss and don't go into additional risk of Future.
Please also look into the history. Nifty Highest of Close 6317.35 was on 3 Nov 2013 though highest of high was 6357.10 on 8 Jan 2008. So, I still think there is not much to worry.
According to me, there is very strong resistance at 6300 level. So, I don't think Nifty will cross 6300. Even if crosses, the bears will pull down it in due course. But, I 100% agree with you. Instead of taking additional risk, it is wise decision to take loss and close the trades.
If it crosses 6300 and I presume it will come down. Suppose, it keeps going up and your losses are increasing. What will you do? So, it is better to take suitable steps in due course and restrict your losses.
However, I have seen people who successful hedge this position. They just buy Future and as soon they get 70-80 points, closes the Future as well as options. Different people behave in different manner even in the same circumstance based on their nature. My personal choice is to close the trade, take the loss and don't go into additional risk of Future.
Please also look into the history. Nifty Highest of Close 6317.35 was on 3 Nov 2013 though highest of high was 6357.10 on 8 Jan 2008. So, I still think there is not much to worry.
Saravananji,
According to me, there is very strong resistance at 6300 level. So, I don't think Nifty will cross 6300. Even if crosses, the bears will pull down it in due course. But, I 100% agree with you. Instead of taking additional risk, it is wise decision to take loss and close the trades.
If it crosses 6300 and I presume it will come down. Suppose, it keeps going up and your losses are increasing. What will you do? So, it is better to take suitable steps in due course and restrict your losses.
However, I have seen people who successful hedge this position. They just buy Future and as soon they get 70-80 points, closes the Future as well as options. Different people behave in different manner even in the same circumstance based on their nature. My personal choice is to close the trade, take the loss and don't go into additional risk of Future.
Please also look into the history. Nifty Highest of Close 6317.35 was on 3 Nov 2013 though highest of high was 6357.10 on 8 Jan 2008. So, I still think there is not much to worry.
According to me, there is very strong resistance at 6300 level. So, I don't think Nifty will cross 6300. Even if crosses, the bears will pull down it in due course. But, I 100% agree with you. Instead of taking additional risk, it is wise decision to take loss and close the trades.
If it crosses 6300 and I presume it will come down. Suppose, it keeps going up and your losses are increasing. What will you do? So, it is better to take suitable steps in due course and restrict your losses.
However, I have seen people who successful hedge this position. They just buy Future and as soon they get 70-80 points, closes the Future as well as options. Different people behave in different manner even in the same circumstance based on their nature. My personal choice is to close the trade, take the loss and don't go into additional risk of Future.
Please also look into the history. Nifty Highest of Close 6317.35 was on 3 Nov 2013 though highest of high was 6357.10 on 8 Jan 2008. So, I still think there is not much to worry.
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