Nifty calender spread with calls or puts

[hardik229]

Hi GMT,

Thanks for updates. Can you please provide me answer on below?

How to find the next months Vega or IV. How to decide the next month's IV is high?

Do you follow this IVs while entering in to trade?

Thanks..!!
Hardik Shah

 

[gmt900]

Hi GMT,

Thanks for updates. Can you please provide me answer on below?

How to find the next months Vega or IV. How to decide the next month's IV is high?

Do you follow this IVs while entering in to trade?

Thanks..!!
Hardik Shah

I don't think one can predict next month's IV. However, if the current month's IV is very low, like in the present scenario, chances are that next month IV will be higher. Again, IV is only one of the factors affecting the outcome of calendar spread. Probably more important factor is the difference between the option prices of back end and front end months.

In fact these are the issues I am trying to learn and only way I can do it is by experience or by trial and error.

 

[hardik229]

Hi GMT,

What is the update on the trade? Can you please post it?

Thanks..!!
Hardik

 

[gmt900]

Hi GMT,

What is the update on the trade? Can you please post it?

Thanks..!!
Hardik

Hi Hardik,

With 7 days to go before expiry MTM is 810.

SEP 7800CE sold @209 is @196.2 +12.8
OCT 7800PE bought @ 277 is @ 280.4 +3.40

MTM has been as follows;
12 SEP -325
15 SEP +709
16 SEP +1220
17 SEP +810

I think with NS @ 7975, profit should increase next week closer to expiry.

 

[hardik229]

Hi GMT,

Thanks for the updates.
I have following doubts. After you put the trade, nifty went to close to 8200. Which is 4-5% increased in nifty after you put the trade. What if nifty continue to increase?

At what point you decide to do any adjustment? What will be your adjustment in this case?

Thanks..!!
Hardik Shah

Hi Hardik,

With 7 days to go before expiry MTM is 810.

SEP 7800CE sold @209 is @196.2 +12.8
OCT 7800PE bought @ 277 is @ 280.4 +3.40

MTM has been as follows;
12 SEP -325
15 SEP +709
16 SEP +1220
17 SEP +810

I think with NS @ 7975, profit should increase next week closer to expiry.

 

[gmt900]

Hi GMT,

Thanks for the updates.
I have following doubts. After you put the trade, nifty went to close to 8200. Which is 4-5% increased in nifty after you put the trade. What if nifty continue to increase?

At what point you decide to do any adjustment? What will be your adjustment in this case?

Thanks..!!
Hardik Shah

These are the questions I am grappling with. I don't think their is a straight answer to this question.

Probably, I would just close the SEP leg and let OCT leg ride. If nifty starts to slide back, take whatever profit available and scoot.

I will get a hang of this strategy only after a few months ( or years) after going through various situations.

After going through several ups and downs, I have got reasonably confident of handling short strangle/iron condor.

Their is no substitute for experience and one will have to pay the price to get experience.

Wish you good trading

gmt

 

[coolbull]

@gmt900

truly said!.....Good work gmt900


this month was good as far as selling pair is concerned.......still playing low on volatility.....even short straddle earned good..... till now expiry range is 8000-8050-8100.....it can change with some global events like scotland as well

 

[gmt900]

@gmt900

truly said!.....Good work gmt900


this month was good as far as selling pair is concerned.......still playing low on volatility.....even short straddle earned good..... till now expiry range is 8000-8050-8100.....it can change with some global events like scotland as well

Thank you coolbull for your encouragement.

I think if one can develop ability to spot opportunities to take trades which have the best chance of succeeding at a given time one can become successful. Also important is the ability to adjust and modify trades as the situation develops.

I might be stating the obvious but that will be my goal.

 

[gmt900]

Hi Hardik,

With 7 days to go before expiry MTM is 810.

SEP 7800CE sold @209 is @196.2 +12.8
OCT 7800PE bought @ 277 is @ 280.4 +3.40

MTM has been as follows;
12 SEP -325
15 SEP +709
16 SEP +1220
17 SEP +810

I think with NS @ 7975, profit should increase next week closer to expiry.

With four days to go before expiry, their is no profit no loss. NS is at 8150.
VIX is at the lowest.

I would be grateful, if I get advice on the best course of action.

 

[hardik229]

Hi GMT,

What did you do on this trade finally? What is the P/L?

Do you think Calendar Spread is a good option strategy for Monthly income?

Thanks..!!
Hardik Shah