@GMT
How will go about managing a short strangle which is just shown a breakout of an important level and is threatening to move 300 points fast? Also, note that this breakout could be false, cuz 50% of them are, and reverse strongly too.
How will go about managing a short strangle which is just shown a breakout of an important level and is threatening to move 300 points fast? Also, note that this breakout could be false, cuz 50% of them are, and reverse strongly too.
That is why I enter into short strangle at least one month before expiry.
Prepare a matrix or table ( manually ) for various scenarios for nifty expiring from say 5600 to 6400 and decide on action required to be taken depending upon the movement of nifty. I will have adequate time to keep adding positions to keep delta neutral to the extent possible. I will keep initial position size small, so that there is no issue of margin as I add positions.
For example, I have kept limit orders for my current short strangle so that I don't incur any losses due to sudden nifty movement in the adverse direction.
This is the process I am following for my current positions and so far I have been able to manage OK.
In engineering subjects we used to solve problems at the end of each theory lesson and if one's fundas are not clear it was difficult to solve problems. And the practice of solving problems using fundas made one confident of facing exam. Right now I am in practice problem solving phase.