Low Risk Options Trading Strategy - Option Spreads

[NTrader42]

Hello

For the above strategy what i understand is that if nifty stays between 4900 - 5200 at Feb expiry, we will gain aprox 50 points - cost,
if nifty will close below 4800 or above 5300 we will lose aprox 50 points + cost.

The strategy summary for the above as shown in Options Oracle.

Can anyone explain it to me, what the various terms mean?

For e.g. the probability %, etc.

The current return is showing -5.65% & -5.61% what does all of it mean ???

Thanks
NT

 

[sudris]

1. Open that Excel File...... Navigate to the Data Tab >> In the Connections Area >> Click on Connections

2. In the Window that Opens up.... there is already a "Connection" present.... Select that and click on Properties....

3. A new Window would open up..... It has two tabs: "Usage" & "Definition".....

4. Under "Usage" Tab there are various Refresh Options..... Select those as per your preferences......

5. Under "Definition" Tab.... Click on "Edit Query..."

6. A new Browser Window would pop up inside Excel...... It would automatically open the Option Chain Page for Nifty..... If you want it for Reliance..... then type Reliance in the field "Search for an Underlying Stock".... and Hit the "Go" Button as you do in a normal Browser....

7. The page would refresh and show the data for Reliance.... Now, Click on the "Import" Button..... It would copy the data in Excel and save the query.....

8. You shall now see the charts getting updated.... This is just a one time process.....

9. Next time, just go to the Data Tab >> and press Refresh All (Ctrl+Alt+F5)....

And you can even set to refresh the data automatically in specified time interval if you go to "Connection Properties" and play around with some of the options in there

Thanks Aditya

So you have send in the cake, the recipe and the oven :thumb:

Thanks
NT

Let me know if the auto refresh feature serves as the icing on the cake

 

[gunsho]

Thanks for trying to protect Short strangle :thumb:. Very interesting.

When you want to see returns in %, the margin amount picked by default by OptionsOracle does not reflect the actual margin required in Nifty. If you enter the actual margin, the 'Return if unchanged' might be around 5 - 6%. Without the actual margin, I think it is ok to just check the Nifty points that we are gaining / losing. About probability, I am not very clear.

Hello

For the above strategy what i understand is that if nifty stays between 4900 - 5200 at Feb expiry, we will gain aprox 50 points - cost,
if nifty will close below 4800 or above 5300 we will lose aprox 50 points + cost.

Why 50 points - cost? As per your trade 50 points credit is after considering the cost for the long positions right? The max profit / loss is 50 points? Am I missing something?

 

[NTrader42]

Why 50 points - cost? As per your trade 50 points credit is after considering the cost for the long positions right? The max profit / loss is 50 points? Am I missing something?

cost is brokerage and others like trading setup, data etc

 

[NTrader42]

Hello

For the above strategy what i understand is that if nifty stays between 4900 - 5200 at Feb expiry, we will gain aprox 50 points - cost,
if nifty will close below 4800 or above 5300 we will lose aprox 50 points + cost.

The strategy summary for the above as shown in Options Oracle.

Can anyone explain it to me, what the various terms mean?

For e.g. the probability %, etc.

The current return is showing -5.65% & -5.61% what does all of it mean ???

Thanks
NT

Implemented the long leg of this strategy in the morning

Long CE 5300 => -38
Short PE 4900 => +58

Now completing the short leg

buying PE 4800 @ 27.75
Short CE 5200 @ 82.75

All 4 orders with just 1 lot,

+58+82.75-27.75-38 - 5 (brokerage both side) = +70

Max risk now 30 points i.e. rs 1500

Thanks
NT

 

[NTrader42]

Hello

Legging in will work only if we get the trend right, else it will have a similar inverse impact, the realization of the spread improved by 20 points in today's case.

I think keeping one side of the position open is ok only during market hours but at EoD, one must have the wings in place. I should make this as a rule no 01, never go home without wings, first protection, then profits


Another options I had but did not realize before executing the short leg, was to shift the SP up by 100 points

instead of

Short CE 5200 @ 82.75, I could have Shorted CE 5300 and shifted the long to CE 5400.

Thanks
NT

 

[DanPickUp]

Hello

Legging in will work only if we get the trend right, else it will have a similar inverse impact, the realization of the spread improved by 20 points in today's case.

I think keeping one side of the position open is ok only during market hours but at EoD, one must have the wings in place. I should make this as a rule no 01, never go home without wings, first protection, then profits


Another options I had but did not realize before executing the short leg, was to shift the SP up by 100 points

instead of

Short CE 5200 @ 82.75, I could have Shorted CE 5300 and shifted the long to CE 5400.

Thanks
NT

Hi NT

In option trading we have many possibilities. Here some more ideas to use wings .

An other way to use wings is to start only with them and after market moved, you start to leg in. That is the opposite from the above.

This can be done with different method's. You would have to play around a bit in your market with that ideas.

One way is through directional trading by buying the cheap wing on predefined entry points or market conditions. After market moved, you then start to leg in.

An other way is through delta neutral trading. Buy put and call wings which are priced equally. The amount of options on each side can be different. Important is the equal value of the whole options on each side. As you now have this positions, you leg in and out with more expensive options compare to market moves. Quit tricky some times.

Good luck

DanPickUp

 

[adityasaraf007]

Hello everybody,

Have updated that Options file with a new Sheet for OptionPain..... The sheet has to be modified once the total number of Strikes changes...... I would try to update that sheet regularly.....

Here's the Link to the folder...... Download the file called "Nifty Options Analysis.xlsx"....

 

[sudris]

Hello everybody,

Have updated that Options file with a new Sheet for OptionPain..... The sheet has to be modified once the total number of Strikes changes...... I would try to update that sheet regularly.....

Here's the Link to the folder...... Download the file called "Nifty Options Analysis.xlsx"....

good one Aditya... great and handy information with charts

 

[NTrader42]

Hi NT

In option trading we have many possibilities. Here some more ideas to use wings .

An other way to use wings is to start only with them and after market moved, you start to leg in. That is the opposite from the above.

This can be done with different method's. You would have to play around a bit in your market with that ideas.

One way is through directional trading by buying the cheap wing on predefined entry points or market conditions. After market moved, you then start to leg in.

An other way is through delta neutral trading. Buy put and call wings which are priced equally. The amount of options on each side can be different. Important is the equal value of the whole options on each side. As you now have this positions, you leg in and out with more expensive options compare to market moves. Quit tricky some times.

Good luck

DanPickUp

Thanks Dan

I have started looking at these possibilities, for me the basic problem was my orientation towards options trading. i was looking at options purely as non-directional play based on time value and volatility. But once i have opened up to the fact that options are also highly leveraged directional play besides having a time value & volatility component, these possibilities are opening up. It will take me some time and loads of real time experience to start trading with these strategies with some comfort. For now still in learning mode and trading with minimum position size required to implement a strategy.

Thanks
NT