Nifty Futures Trading Part 2 (Positional)

[mitasatyajit]

Im srry satya but i guess we went into a different direction from the 1 i meant to ask...

All i wanted to ask that when you said above that you dont prefer to BUY options these days for the reasons mentioned above, you said and you prefer to write the option but hedge it with a future....

So all i wanted to ask was How do You usually hedge your self using futures and selling an option(ie either call or Put) and utilise the time value to earn ...

*Btw as u asked in the above post about any of strategies... For that i have my own thread(not very famous ) for past 2 months... If i start posting links to that thread( for my strategies) it'll be very famous or atleast known to many more ppl caz i know that atleast every1 comes here

http://www.traderji.com/derivatives...trading-part-2-positional-194.html#post225956

What is openion about this strategy. This position, I am posting during last week all the days / as and when changed it. If u have time u may go through from the first one till date for viewing the alterations in position.

First posting as per this position http://www.traderji.com/derivatives...trading-part-2-positional-157.html#post222611

 

[arnav_rulz]

http://www.traderji.com/derivatives...trading-part-2-positional-194.html#post225956

What is openion about this strategy. This position, I am posting during last week all the days / as and when changed it. If u have time u may go through from the first one till date for viewing the alterations in position.

First posting as per this position http://www.traderji.com/derivatives...trading-part-2-positional-157.html#post222611

Man talk about complicated !!

Will have to go through all your Alterations to know more about this strategy ... Will do that in this weekend...

Otherwise if you follow/ have any particular strategy that you follow here do tell so that other's can learn from it and maybe start doing it themselves one day cause this looks like an interesting strategy ...

Also in this strategy are you taking positional trades i.e changing when you bearish or bullish or are you following a pattern or something.... ?

 

[mitasatyajit]

Total profits are calculated on the basis of spot nifty close on October'08 expiry. On October expiry date, if nifty spot closes at 4100 or less till 0 the total profit will be Rs. 501/_ and if it is 4800 then loss of Rs. 899/_, if u consider that the present position remains unchanged till expiry.

The steering of ur position is future (position long/short according to linebaba), change the strike price of option according to the level of nifty. I usually prefer to change the strike price every 100 points of nifty. This may be done according to ur choice (may be 50, 100, 200 etc.).



P.S. - I am habituated with Renu's typing

Present position.

On every 100 points rise in nifty fut there will be rise of 50 point in call price. Change it to upper strike price, premium will not become zero, and also liquidity will be there.

Not everywhere. It is 4100 PE, so upto 4100 close u will get 170/_ as profit, below it the profit will decrease. Notice at 4050 close profit is 120/_ and so on.

May go through the above.

 

[sikandar]

Hi mita
Looks very interesting and hard to understand the linebaba and streeing the position.
thanks
sikandar

 

[mitasatyajit]

Hi mita
Looks very interesting and hard to understand the linebaba and streeing the position.
thanks
sikandar

Line baba : - Trendline system which I am following

http://www.traderji.com/general-trading-investing-chat/21384-sharing-trading-technique.html

 

[orderflow13]

Iron Condor

The iron condor is a neutral strategy that is a combination of a bull put spread and a bear call spread. It is a limited risk, limited profit trading strategy that is structured for a larger probability of earning smaller limited profit when the underlying stock is perceived to have a low volatility.
Iron Condor Construction
Sell 1 OTM Put
Buy 1 OTM Put (Lower Strike)
Sell 1 OTM Call
Buy 1 OTM Call (Higher Strike)

To setup an iron condor, the options trader sells a lower strike out-of-the-money put, buys an even lower strike out-of-the-money put, sells a higher strike out-of-the-money call and buys another even higher strike out-of-the-money call. This results in a net credit to put on the trade

 

[orderflow13]

Calendar Spread Option Strategy

When you are fairly neutral on the market and you want to generate additional income from your investments, there is an option strategy that is worth your consideration. This strategy involves selling an option with a nearby expiration, against the purchase of an option (with the same strike price) which has an expiration date that is further out.

A Calendar Spread is an option spread where the strike prices are the same, but they have different expiration dates. These spreads are also referred to as horizontal spreads or time spreads.

Calendar spreads can provide a way to add value to your portfolio through your purchase of a long term option with a reduced cost basis, provided by a near term option that you sold.

One very favorable point to a Calendar Spread is the value of time decay. Although both options lose time value as time passes, the option you sold loses value much more quickly than the option you bought. Therefore, if your prediction of a neutral market is correct, the value of your Calendar Spread will increase as time passes. A Calendar Spread takes advantage of time value differentials during neutral markets.

 

[orderflow13]

add edit ..
dig deep in to google with those key words as explaining everything is very hard, as option strategy are very complicated .... iron condor, butterfly, vanilla spread, cover call, strangle, etc ... search with those key words .. investopedia is a good source .. and after learning it 70 % time u can earn at least double of interest rate in accordance with how risky ur option strategys are

 

[mitasatyajit]

Iron Condor

The iron condor is a neutral strategy that is a combination of a bull put spread and a bear call spread. It is a limited risk, limited profit trading strategy that is structured for a larger probability of earning smaller limited profit when the underlying stock is perceived to have a low volatility.
Iron Condor Construction
Sell 1 OTM Put
Buy 1 OTM Put (Lower Strike)
Sell 1 OTM Call
Buy 1 OTM Call (Higher Strike)

To setup an iron condor, the options trader sells a lower strike out-of-the-money put, buys an even lower strike out-of-the-money put, sells a higher strike out-of-the-money call and buys another even higher strike out-of-the-money call. This results in a net credit to put on the trade

Given above one set up according to plan u posted.

 

[orderflow13]

Thanks satda .. hope it will help others too by looking at live example
p.s. now a days some what option neutral strategy seems to be the flavor among hnis as there is no way to generate profits on there huge holdings, see the data of option volume of last 3 months, its highest after its introduction