Low Risk Options Trading Strategy - Option Spreads
- Thread starter AW10
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Hi
Yeah, the strategy is best in range bound markets and we trade covered options at the break even points.
On the downside it is a covered put ( Short future and short put ) if needed and on the upside it is a covered call ( Long future and short call ).
If market jumps in a trend, we have to buy back the other side option as quick as possible to not make to heavy losses with it.
Yes, can be traded very well. I only was confused by the 100 points, as I not could see such a strangle on the screen shot.
Good idea Jain.er. Improvement could be made with directional entry's on both sides, but this is: I like it or I am not interested in it.
Thank you to put this strategy on the table in front of the forum.
There are more such ping pong strategies around and they need a good understanding of what can be done with options.
Comm4300: Hope you enjoyed the book. BWB involve the direction of the market and that makes them quit interesting compare to the just neutral strategies. What is showed in the book can be improved.
DanPickUp
Yeah, the strategy is best in range bound markets and we trade covered options at the break even points.
On the downside it is a covered put ( Short future and short put ) if needed and on the upside it is a covered call ( Long future and short call ).
If market jumps in a trend, we have to buy back the other side option as quick as possible to not make to heavy losses with it.
Yes, can be traded very well. I only was confused by the 100 points, as I not could see such a strangle on the screen shot.
Good idea Jain.er. Improvement could be made with directional entry's on both sides, but this is: I like it or I am not interested in it.
Thank you to put this strategy on the table in front of the forum.
There are more such ping pong strategies around and they need a good understanding of what can be done with options.
Comm4300: Hope you enjoyed the book. BWB involve the direction of the market and that makes them quit interesting compare to the just neutral strategies. What is showed in the book can be improved.
DanPickUp
http://www.traderji.com/options/28235-good-profit-hedged-nifty-positions-straddle.html
One another similar thread. Combination of Short Straddle along with Nifty futures swing trades.
One another similar thread. Combination of Short Straddle along with Nifty futures swing trades.
First of all my apologies for replying so late (My day job is sucking big time)
Now just to elaborate my strategy (although I do not trade it)
Suppose on 1st of month NIFTY is at 5200
we sell 5400 CE and 500 PE for a collective premium of at least 100 points
We do this every month without considering any TA
Now suppose NIFTY catches a trend say uptrend and starts moving
and say in 5 days it moves to 5250, now we know that market is in strong uptrend so we can buy FUT to hedge our call and buy our PE back. Now what I feel we can sell FUT if market continues to move up at a profit of say 100 points and also buyback CE. Net net some money you will mint.
Best profit is when nifty remains in the range.
One can keep a buyback plan for CE/PE in the following manner
1st week buy if options are 50% cheaper
2nd week say at 20 bucks
3rd week say at 10 bucks
last week say at 5 bucks
By buying back when ever opportunity is there you are reducing your risk of any sudden movement
a rough analysis is in excel attached
jain.er.xlsx
Now just to elaborate my strategy (although I do not trade it)
Suppose on 1st of month NIFTY is at 5200
we sell 5400 CE and 500 PE for a collective premium of at least 100 points
We do this every month without considering any TA
Now suppose NIFTY catches a trend say uptrend and starts moving
and say in 5 days it moves to 5250, now we know that market is in strong uptrend so we can buy FUT to hedge our call and buy our PE back. Now what I feel we can sell FUT if market continues to move up at a profit of say 100 points and also buyback CE. Net net some money you will mint.
Best profit is when nifty remains in the range.
One can keep a buyback plan for CE/PE in the following manner
1st week buy if options are 50% cheaper
2nd week say at 20 bucks
3rd week say at 10 bucks
last week say at 5 bucks
By buying back when ever opportunity is there you are reducing your risk of any sudden movement
a rough analysis is in excel attached
jain.er.xlsx
- Status
| Thread starter | Similar threads | Forum | Replies | Date |
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