Low Risk Options Trading Strategy - Option Spreads

[NTrader42]

Follow up

Spot Nifty @ 5010

Nifty CE 4800 @ 207.50
Nifty CE 4900 @ 121.50
=========================
Spread 86

-------------------------- Part II ---------------------------------

Put 4800 @ 6.0
Put 4900 @ 18.25
=========================
Spread 12.25

Hi

The spread on Debit Call Spread, increased further to 90-92 (max can be 100, we started with 75, draw down was 5), I closed the short leg first and then the long leg for a difference of net 30 Points. The spread on Credit Put Spread is 8.5, I have closed that position. The Debit Call Spread turned out to be better one, I feel with the Strikes 100 points away, we lose the choice of structuring a better spread, anyway it was a nice learning exercise.

The conclusion for now is getting the trend right turned out to be most important. Comparing the exercise with a long on future with just 1 lot of Mini Nifty, the RR would have turned out the same :thumb:

Thanks
NT

 

[DanPickUp]

Nifty Spot @ 4950

Strategy View Bullish, Expecting to close above 4900, 8 days to expiry

Nifty CE 4800, Long @ 165
Nifty CE 4900, Short @ 90

Max Risk 75, Max Gain 25

Thanks

Hi NT

When I asked about why you not take the puts when you are bullish, I thought about this:

5100 put short and 5200 put long.

Why?

Look at your example: Nifty spot is at around 5000.

Your long call 4800 is 200 point in the money. So is the long 5200 put

Your short call 4900 is 100 point in the money. So it the short 5100 put.



DanPickUp

 

[NTrader42]

Hi NT

When I asked about why you not take the puts when you are bullish, I thought about this:

5100 put short and 5200 put long.

Why?

Look at your example: Nifty spot is at around 5000.

Your long call 4800 is 200 point in the money. So is the long 5200 put

Your short call 4900 is 100 point in the money. So it the short 5100 put.



DanPickUp

Thanks Dan

Now you know with options I am a real Newbie Trader :lol:

Looking at the premium of the Put Options I have used, i felt something is wrong, will work with these new SP that you have suggested,

If I want to do that today I guess I will shift the SPs further up, anyway will try both the pairs and also try it using back data

Thanks
NT

 

[NTrader42]

Hi NT

When I asked about why you not take the puts when you are bullish, I thought about this:

5100 put short and 5200 put long.

Why?

Look at your example: Nifty spot is at around 5000.

Your long call 4800 is 200 point in the money. So is the long 5200 put

Your short call 4900 is 100 point in the money. So it the short 5100 put.



DanPickUp

Using Feb Data, Short Put SP 5100, Long Put 5200, CMP 5020

This is what we should have done, when the bias was bullish :thumb:

risk of 100 for a gain of 20 bucks.......is that OK?NT

Yes now the RR will be much better risk 40, reward 60, the side we are betting on is bullish

Thanks
NT

 

[jain.er]

Using Feb Data, Short Put SP 5100, Long Put 5200, CMP 5020

This is what we should have done, when the bias was bullish :thumb:



Yes now the RR will be much better risk 40, reward 60, the side we are betting on is bullish

Thanks
NT

what will be your SL ? for this trade ?

 

[jain.er]

Can anyone suggest how can i go long on volatility in indian market ?

 

[NTrader42]

what will be your SL ? for this trade ?

Have not taken this trade,but max loss is 40 in this case, if one is ok with 40 points as Stop Loss then no need to cut the trade, can hold for price to move to profit side. When the position moves to profit side we can cut the trade. Also main thing in these trades is the direction of the market, once we are sure the trend has turned to downside, we should change the strategy to reflect that, no gain in just hoping that the market may some how get us into profit.

Effectively the stop will be whenever the trend turns to down and then whatever price we get, but it will be maximum 40 points.

Thanks
NT

 

[NTrader42]

Hello

Does any one know if there any excel based (or other) utilities to download the Options Chain data and compare it the changes in OI etc?

Thanks
NT

 

[adityasaraf007]

Hello

Does any one know if there any excel based (or other) utilities to download the Options Chain data and compare it the changes in OI etc?

Thanks
NT

Hi NT..... See if this helps..... Just baked out of the oven.... So, if the dish tastes bad, do let me know....

 

[NTrader42]

Hi NT..... See if this helps..... Just baked out of the oven.... So, if the dish tastes bad, do let me know....

Thanks a lot Aditya :thumb:, will try it out

Thanks
NT

EDIT: Shows today's data and nice graphs on sheet 2 & 3, will it auto update every day or i need to put it in the oven