Hi AW10, I have gone through your thread and inspired by your approach. I successfully attempted a few trades based on your strategy and benefited. I would like to construct spreads based on Banknifty. I know that 100 points difference is ideal for Nifty strike prices. What should be the ideal strike difference in the case of Banknifty. Because of wild move in the premium price of Banknifty , I think atleast 200 points difference will be alright in strike difference. What is your good suggestion on this and taking the spread position on banknifty. Kindly reply with your experience and with some illustrations. Thanking you in anticipation.
Low Risk Options Trading Strategy - Option Spreads
- Thread starter AW10
- Start date
- Status
All,
Need some advice to salvage my position in tatamotors. I entered in a ratio call spread. Last week, I bought a 250 call at 11 and sold TWO 260 calls at 6.7. My logic at the time was that tatamotors will not corss its life time high of Rs. 274 and the spread was tuned towards that.
now I know my assumption is not correct.
250 call is at Rs. 36.5 and 260 call is at 27.5. I sold one of the 260 calls at 25.2 yesterday.
Now, I'm left with a bull call spread of one 250 call(long) and 260 call (short). currently, I'm at around Rs.20K loss.
My question to the Punters is:
Can this situation can be salvaged to minimize/eliminate loss?
thanks for all your input.
Regards,
Jaya
Need some advice to salvage my position in tatamotors. I entered in a ratio call spread. Last week, I bought a 250 call at 11 and sold TWO 260 calls at 6.7. My logic at the time was that tatamotors will not corss its life time high of Rs. 274 and the spread was tuned towards that.
now I know my assumption is not correct.
250 call is at Rs. 36.5 and 260 call is at 27.5. I sold one of the 260 calls at 25.2 yesterday.
Now, I'm left with a bull call spread of one 250 call(long) and 260 call (short). currently, I'm at around Rs.20K loss.
My question to the Punters is:
Can this situation can be salvaged to minimize/eliminate loss?
thanks for all your input.
Regards,
Jaya
wow. thanks for giving something to think about.
i went to nse website to make sure the price is correct.
took out notepad and pen and tried to calculate many scenarios....ofcourse with my limited knowledge i couldn't go any further than calculations at various nifty levels ....
eagerly awaiting inputs from Dan, AW and others....
i went to nse website to make sure the price is correct.
took out notepad and pen and tried to calculate many scenarios....ofcourse with my limited knowledge i couldn't go any further than calculations at various nifty levels ....
eagerly awaiting inputs from Dan, AW and others....
Hi
I also checked the prices. (http://www.option-price.com/index.php). So far ok.
The next point would be the execution of the orders for this trade. If this is done fine, then there is a good chance to have a save trade.
Vssoma, that is a nice collar. Hats of you
:thumb::clapping:
DanPickUp
I also checked the prices. (http://www.option-price.com/index.php). So far ok.
The next point would be the execution of the orders for this trade. If this is done fine, then there is a good chance to have a save trade.
Vssoma, that is a nice collar. Hats of you
:thumb::clapping:DanPickUp
dear,
check this screen shot of trade.....can we call this as zero risk strategy....
if not how can i calculate risk on this trade....
check this screen shot of trade.....can we call this as zero risk strategy....
if not how can i calculate risk on this trade....
you got to be careful. The price OptionsOcracle uses is the index. The futures contract traded around Rs.100 more than the index. Comparing the close price, you can see that the index is at 5429 and the april futures contracts is at 5517. So the difference is ~Rs. 90. There is some risk.
However, your point is taken that there can be risk free trades.
Dear AW10
i am also novice about option but from yours trading idea i am planning a trade
please check it and reply me back.
FOR 29MAR2012 EXPIRY
IF i excercise two spread at a time
NIFTY 5400PE BUY @118 risk is Rs.32
NIFTY 5300PE SELL @86
i.e bear put strategy and
NIFTY 5500CE BUY @144 risk is 45
NIFTY 5600CE SELL @99
i.e. in any direction market moves i could be in profit and one of my other sold leg will earn me extra profit could you please answer me about my mistake or any senior person of this type of trade.
i am also novice about option but from yours trading idea i am planning a trade
please check it and reply me back.
FOR 29MAR2012 EXPIRY
IF i excercise two spread at a time
NIFTY 5400PE BUY @118 risk is Rs.32
NIFTY 5300PE SELL @86
i.e bear put strategy and
NIFTY 5500CE BUY @144 risk is 45
NIFTY 5600CE SELL @99
i.e. in any direction market moves i could be in profit and one of my other sold leg will earn me extra profit could you please answer me about my mistake or any senior person of this type of trade.
- Status
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