Low Risk Low Returns- Target 50 NF per month per NF Lot

[jamit_05]

SOLD 50 units Mar 5900 PE @ 160

Gain 50*160 = 8000;

 

[jamit_05]

sold single 5900 mar pe @200 !!

Gain Rs.10000

 

[jamit_05]

SOLD one NF Lots @ 5932

LOSS: 5960-5832 = 128 pts... i.e. 128*50 = Rs.6400

Bought back one NF lot @ 5700 (diff 5932-5700 = 232; Around Rs.10000)

A windfall, which is expected once in a while.

 

[jamit_05]

Fresh Start
=========

Now that I have a vague idea as to how this should go about, let me start fresh with a fresh stock and more clarity.

To summarize the experience.

Adjust delta after every big move, up or down. If there is no big move then act at 150 point distance. If you have the knowledge of the trend, then some risk can be taken. Considering, all odds it will pay off.


New STOCK
=========
(should've waited for Monday, the cost would be less)
10 Lots of NF APR 5700
20 LOTS of 5700 PE APR @ 100 each (for pair 200)

Some Elementary Rules
=================

1. Take action only EOD or Gap Open (in first minute).
This is for the sake of simplicity in execution. No fancy pattern and speculation only when absolutely needed. Simple motives, simple actions. Someday, may have a method which will consistently and comfortably beat the FDs.

 

[PartTime_Trader]

Hello

I was following this trade, my impression was that the trade management was a bit ad hoc,
the performance will be much better (3 to 4 times) with more hands on approach.

For that first thing throw-out the need for always keeping it delta-neutral at any cost.

The purpose of trading is to make points / profits while minimizing risk and not to implement some technical scheme of things.


Starting off with a Delta Neutral position insulates us from directional shocks,
but as we get into the trend, have some delta on the side of the trend will give us big advantage.

Do we do this on intraday basis or positional and how much we open, a part or full position depends on traders personality.

Delta is like cholesterol, it comes both in good and bad variety. Good to have more of it, when it is in sync with the trend

Fresh Start

Long futures and Double Long Puts
=====================================
10 Lots (Long) of NF APR 5700
20 LOTS of 5700 PE APR @ 100 each (for pair 200)
=====================================

The same can be implemented using

Short Futures and Double Long Calls
=====================================
10 Lots (Short instead of Long) of NF APR 5700
20 LOTS of 5700 CE APR @ xyz each
=====================================

Time value for both CE & PE will be same, the difference in implied volatility will impact the cost and effectively our decision about which one to choose

My feeling is currently it is good to go with long futures and double long puts


Cheers
::thumb::




EDIT: As it is 2nd round lets target 100 points instead of just 50 :thumb:

 

[jamit_05]

Hello

Starting off with a Delta Neutral position insulates us from directional shocks,
but as we get into the trend, have some delta on the side of the trend will give us big advantage.

How do you propose this be done. By holding on a little more?

The same can be implemented using

Short Futures and Double Long Calls
=====================================
10 Lots (Short instead of Long) of NF APR 5700
20 LOTS of 5700 CE APR @ xyz each
=====================================

Time value for both CE & PE will be same, the difference in implied volatility will impact the cost and effectively our decision about which one to choose

My feeling is currently it is good to go with long futures and double long puts

Chose to buy PEs, since in APR PEs are 30% cheaper than CEs.

EDIT: As it is 2nd round lets target 100 points instead of just 50 :thumb:

Wish I could say that for sure...

 

[jamit_05]

New STOCK
=========
(should've waited for Monday, the cost would be less)
10 Lots of NF APR 5700
20 LOTS of 5700 PE APR @ 100 each (for pair 200)

Some Elementary Rules
=================

1. Take action only EOD or Gap Open (in first minute).
This is for the sake of simplicity in execution. No fancy pattern and speculation only when absolutely needed. Simple motives, simple actions. Someday, may have a method which will consistently and comfortably beat the FDs.

At EOD will sell one ATM CE lot. This will fetch a NF profit of around 100 pts and premium of 103. That pretty much covers all cost.

Or I could sell NF itself for 100 points gain and hope to get a pullback to sell PE pair...

Lets see.

 

[jamit_05]

=========


New STOCK
=========
(should've waited for Monday, the cost would be less)
10 Lots of NF APR 5700
20 LOTS of 5700 PE APR @ 100 each (for pair 200)

Some Elementary Rules
=================

1. Take action only EOD or Gap Open (in first minute).
This is for the sake of simplicity in execution. No fancy pattern and speculation only when absolutely needed. Simple motives, simple actions. Someday, may have a method which will consistently and comfortably beat the FDs.

Taking action at Open tomorrow as I expect a gap up opening.

Am going to sell one Lot of 5800 CE if it opens gap up, or at level of today's high, whichever comes first.

This sale will fetch Rs.140; This will also lock gains of one NF lot i.e. 100 points. So total gain will be 2400 points if price keeps north. If it flips, then we will get a good chance to buy back the call at half the price. Either way we make profit.

 

[jamit_05]

SOLD 5800 APR CE @ 130 locked the potential for 230 points !!

 

[jamit_05]

SOLD 5800 APR CE @ 130 locked the potential for 230 points !!

As chipped in by parttime, I will wait for to sell some PEs at a pullback and risk a little delta bias but in the direction of the trend.

Here I had another choice: sell NF now and wait for pullback. That would have given me around 150 points on NF and if pullback came, then around 130 points by selling a PE pair... i.e. 280 points of potential but with an "If".