Low Risk Options Trading Strategy - Option Spreads

[darkstar]

Hi

Here an other way to see if you should trade a long straddle or a long strangle.

If you see in your analyzing picture a smiling face, then gamma is long and you know that your strategy can work.

You do not need this software, it even works with less complicated tools.

Just remember

Have a nice weekend

DanPickUp

thank you for simplify everything

 

[darkstar]

thank you for simplify everything

sir which software u use for trading TA !

 

[DanPickUp]

sir which software u use for trading TA !

Hi darkstar

It is OptionVue 5 and the new version is OptionVue6.

You do not need this software. It is highly pro software and it is very expensive. ( The software by itself is over 1'000 $ and the input data from the exchanges will cost you around 2'000 $ per year ).

Go for the free software which AW10 and other members from this forum use for the nifty options. It will be enough for the begin.

Take care and enjoy the football champion ship if you like football.

DanPickUp

 

[DanPickUp]

go for a ratio bullish spread... buy 5000 pe at 156 and sell 2 lots of 4800 pe. The moment 4920 is breached on nifty on closing basis, exit 1 lot of 4800 put and convert it to a bear spread...

Hi linkon7

You recommend a ratio bullish spread.

If you do so, I guess the volatility in nifty is low at the moment.

I see, that you recommend as next an exit by 4920 if it is breached by closing basis. You then recommend to sell one lot of 4800.

Why waiting until it happens ?

It is better to place such orders in any market in advance by your broker.

If market touches your target, you are filled.

If you wait until market is there, market can also go deeper and you have to run to get out of your positions. ( Just my experience )

Take care and have a nice weekend

DanPickUp

 

[linkon7]

Hi linkon7

You recommend a ratio bullish spread.

If you do so, I guess the volatility in nifty is low at the moment.

I see, that you recommend as next an exit by 4920 if it is breached by closing basis. You then recommend to sell one lot of 4800.

Why waiting until it happens ?

It is better to place such orders in any market in advance by your broker.

If market touches your target, you are filled.

If you wait until market is there, market can also go deeper and you have to run to get out of your positions. ( Just my experience )

Take care and have a nice weekend

DanPickUp

I trade based on my indicators and the recommendations are based on what i see on the charts.

based on my own reading, i feel that we will spend a lot of time above the 4920 mark before we can see some serious down leg...

We are firmly placed above the 5100 mark and going the the OI buildup of the current series, 5000 and 5100 levels will prove to be a tough support to crack in the coming days. 5200 call has added huge OI and that might become the next resistance level. but the 4800 put will see plenty of writing in the days to come. A ratio spread with 2 lots of 4800 put short vrs 1 lot of 5000 put long , will help in tiding over that phase.

A close below the 4920 mark on EOD basis opens up the down leg for target of 4650 to 4400 levels. Till this happens, let the position be skewed towards the bulls... All we need to do is close one leg of 4800 and we can be bears again...

 

[sagarkapoor]

Option gurus please comment on the hypothetical trades I'm contemplating :

Short Straddle @ 5100 :

Sell 1 July 5100 CE @ 170
Sell 1 July 5100 PE @ 166.50

Protection for Straddle:
Buy 1 July 4800 PE @ 81.50
Buy 1 July 5400 CE @ 45.35

Net Credit - 209.65

The overall credit from selling 5100 CE and PE gives me 336.50 which gives me a range from 4763.5 on the downside to 5436.50 on the upside. To protect my straddle from huge movements on either side I buy the OTM PE @ 4800 and OTM CE @ 5400.

Can the option gurus please comment on these trades?

Thanks

 

[ksesha]

You will be in green if the expiry is between 4900 to 5300. Maximum loss is 4517.5

5500 -4517.5
5450 -4517.5
5400 -4517.5
5350 -2017.5
5300 482.5
5250 2982.5
5200 5482.5
5150 7982.5
5100 10482.5
5050 7982.5
5000 5482.5
4950 2982.5
4900 482.5
4850 -2017.5
4800 -4517.5
4750 -4517.5
4700 -4517.5



Sesha

Option gurus please comment on the hypothetical trades I'm contemplating :

Short Straddle @ 5100 :

Sell 1 July 5100 CE @ 170
Sell 1 July 5100 PE @ 166.50

Protection for Straddle:
Buy 1 July 4800 PE @ 81.50
Buy 1 July 5400 CE @ 45.35

Net Credit - 209.65

The overall credit from selling 5100 CE and PE gives me 336.50 which gives me a range from 4763.5 on the downside to 5436.50 on the upside. To protect my straddle from huge movements on either side I buy the OTM PE @ 4800 and OTM CE @ 5400.

Can the option gurus please comment on these trades?

Thanks

 

[sagarkapoor]

You will be in green if the expiry is between 4900 to 5300. Maximum loss is 4517.5

5500 -4517.5
5450 -4517.5
5400 -4517.5
5350 -2017.5
5300 482.5
5250 2982.5
5200 5482.5
5150 7982.5
5100 10482.5
5050 7982.5
5000 5482.5
4950 2982.5
4900 482.5
4850 -2017.5
4800 -4517.5
4750 -4517.5
4700 -4517.5



Sesha

Wow sesha ... that was a detailed strike price analysis ... may I ask if you manually calculated those values or used a software to determine the P/L situations?

 

[ksesha]

Thanks. I have a program written on mainframe which by entering the strike price, CE/PE, premium and lot size it will return the detailed table.

 

[vssoma]

Thanks. I have a program written on mainframe which by entering the strike price, CE/PE, premium and lot size it will return the detailed table.

dear,
can u name that program, if it is free......i really appreciated, if u share with us.
tnx,