iron condor nifty

[ram843724]

Hi Guys,

Please check if my iron condor trade is correct. And if I can expect any profit out of it?

Sold 7100 July Put@ 27
Bought 7000 PUT@ 17

Also sold 7900 July call @ 34
Bought 8000 July call @ 21


If nifty ends any where between 7000 and 8000 i make a profit.
Not able to calcualte how much profit

And if any suggestion if this strategy is entirely wrong or can be improved.

Regards

Ram

 

[ram843724]

Also to add Nifty is at 7508 today. Date 28 June

 

[comm4300]

Hi Guys,

Please check if my iron condor trade is correct. And if I can expect any profit out of it?

Sold 7100 July Put@ 27
Bought 7000 PUT@ 17

Also sold 7900 July call @ 34
Bought 8000 July call @ 21


If nifty ends any where between 7000 and 8000 i make a profit.
Not able to calcualte how much profit

And if any suggestion if this strategy is entirely wrong or can be improved.

Regards

Ram

good that you are starting options trading with spreads i.e Iron condor.

your total profit if Nifty remains between 7000 and 8000 is rs.23. the net credit that you must have received at the time of placing this condor.

max loss - should nifty go beyond any of the strikes sold is - 100.

strategy is neither right or wrong...but depends on your view. If during this month of high action - i.e budget, you expect nifty to be in a range of 7000 and 8000, and if your perception of volatility is high (with bearish vola in future) the this strategy of eating premium is correct.

Else, risk reward of 4:1 does not look appealing. if you place this trade each month assuming the same credit , you'd get 23x4 (months) = 102. And, if you have one loosing month, all the gains would vanish. Assuming you do not do any other tweaks.

anyways, good beginning to options strategy. have a matrix (as options guru Danpickup put it) in place.

all the best.

 

[santhosh2010]

Hi Guys,

Please check if my iron condor trade is correct. And if I can expect any profit out of it?

Sold 7100 July Put@ 27
Bought 7000 PUT@ 17

Also sold 7900 July call @ 34
Bought 8000 July call @ 21


If nifty ends any where between 7000 and 8000 i make a profit.
Not able to calcualte how much profit

And if any suggestion if this strategy is entirely wrong or can be improved.

Regards

Ram

 

[maijtsthoslaa]

Hi Guys,

Please check if my iron condor trade is correct. And if I can expect any profit out of it?

Sold 7100 July Put@ 27
Bought 7000 PUT@ 17

Also sold 7900 July call @ 34
Bought 8000 July call @ 21


If nifty ends any where between 7000 and 8000 i make a profit.
Not able to calcualte how much profit

And if any suggestion if this strategy is entirely wrong or can be improved.

Regards

Ram

Hi Ram

Can you please tell me something about iron condor
Thanks

 

[sagar_balla]

good that you are starting options trading with spreads i.e Iron condor.

your total profit if Nifty remains between 7000 and 8000 is rs.23. the net credit that you must have received at the time of placing this condor.

max loss - should nifty go beyond any of the strikes sold is - 100.

strategy is neither right or wrong...but depends on your view. If during this month of high action - i.e budget, you expect nifty to be in a range of 7000 and 8000, and if your perception of volatility is high (with bearish vola in future) the this strategy of eating premium is correct.

Else, risk reward of 4:1 does not look appealing. if you place this trade each month assuming the same credit , you'd get 23x4 (months) = 102. And, if you have one loosing month, all the gains would vanish. Assuming you do not do any other tweaks.

anyways, good beginning to options strategy. have a matrix (as options guru Danpickup put it) in place.

all the best.

Ram will get 23 points profit if nifty closes between 7100 and 7900. If it closes between 7000-7100 or 7900-8000, it depends on closing point for profit or loss. suppose if nifty closes at 7050. nifty 7100 put will expire at 50, which makes ram to loose 27 points.

 

[comm4300]

i stand corrected. you are right.

 

[rajeevp99]

HI,

Options Strategy is our response to the Market as per our view about the Market behavior during next few days till expiry. Therefore, instead of picking on the Options Strategy first and then analyzing if it does any good to us; one should define the market view for himself/herself and then select a suitable Options Strategy for execution.

Thanks,
Rajeev.

 

[maijtsthoslaa]

Ram will get 23 points profit if nifty closes between 7100 and 7900. If it closes between 7000-7100 or 7900-8000, it depends on closing point for profit or loss. suppose if nifty closes at 7050. nifty 7100 put will expire at 50, which makes ram to loose 27 points.

But I didnt get
What the use of investing a sum of about 50K (min, as we are writing 2 options also and we have to pay margin for this) for 20-25 days to earn a meager sum of 23 x 50 = 1150 Rupees maximum.

 

[ram843724]

But I didnt get
What the use of investing a sum of about 50K (min, as we are writing 2 options also and we have to pay margin for this) for 20-25 days to earn a meager sum of 23 x 50 = 1150 Rupees maximum.

earning abt 20-25% a year is not a bad strategy. The best part is you know how much u r losing here. So the risk is very limited. U can reduce the range to 7200-7800, which would increase the risk. however it would increase the profit substantially. And again, the chances of the market crossing the range is extremely rare.