Nifty Options Vertical Spread Trading

[ananths]

Position at COP

Long 6000CE 92 (82) = -10
Short 6050CE 37 (61) = -24
Closed 6100CE. = +32
Net P/L. = -2 points

 

[ananths]

I'm holding this Spread trade #2 for longer than expected...this was entered on 13/09/2013..its almost 2 weeks now.
Mainly because of market consolidation...though there are no returns from this spread so far, good thing is no loss too
I will wait patiently now events to fold..let us see what happens.

Patience is the key...I will just follow my system let the market do remaining things.

Looking at the IV on PUT & CALL...one surprising fact is that both are equal and around 32...usually CALL side it used to be around 23-25 max and put side higher than CALLS. Does that indicate a high volatality and huge break out from the range? We can only wait and watch...but once IV falls from current levels all options will lose their value.

 

[ananths]

Spread #2 - Closed

Long 6000CE 92 (140) = +48
Short 6050CE 37 (100) = -63
Closed 6100CE. = +32
Net P/L. = +17 points :thumb:

I sold 6000CE first at 140 and then waited to cover Short leg 6050CE..because I could see that IV is dropping(its at 24 now)...I could have waited for little more but dont want to take risk.

 

[gmt900]

I took the following trade today.
Put Debit Spread :
bought 6000P @ 40.83
sold 5950P @ 30.45
For 5 lots (250 shares)
Max possible profit 9,890 @ 5950
Max loss risk 2,610 @ 6000
Reward/ risk ratio is 3.79
I have taken this trade based on Raj's Max Pain theory. At present the Max pain is @5900.
I think the R/R ratio is good for this trade.
Expiry is 5 trading days away. I will decide on Monday whether to continue with the trade or get out.

 

[ananths]

I took the following trade today.
Put Debit Spread :
bought 6000P @ 40.83
sold 5950P @ 30.45
For 5 lots (250 shares)
Max possible profit 9,890 @ 5950
Max loss risk 2,610 @ 6000
Reward/ risk ratio is 3.79
I have taken this trade based on Raj's Max Pain theory. At present the Max pain is @5900.
I think the R/R ratio is good for this trade.
Expiry is 5 trading days away. I will decide on Monday whether to continue with the trade or get out.

Hi gmt900,
Good one... I was also thinking about same strike prices today
But I was too busy today to think and execute.

All the best! :thumb:

 

[healthraj]

I took the following trade today.
Put Debit Spread :
bought 6000P @ 40.83
sold 5950P @ 30.45
For 5 lots (250 shares)
Max possible profit 9,890 @ 5950
Max loss risk 2,610 @ 6000
Reward/ risk ratio is 3.79
I have taken this trade based on Raj's Max Pain theory. At present the Max pain is @5900.
I think the R/R ratio is good for this trade.
Expiry is 5 trading days away. I will decide on Monday whether to continue with the trade or get out.

If the VOLT goes down it will help the position

 

[mmca2006]

I took the following trade today.
Put Debit Spread :
bought 6000P @ 40.83
sold 5950P @ 30.45
For 5 lots (250 shares)
Max possible profit 9,890 @ 5950
Max loss risk 2,610 @ 6000
Reward/ risk ratio is 3.79
I have taken this trade based on Raj's Max Pain theory. At present the Max pain is @5900.
I think the R/R ratio is good for this trade.
Expiry is 5 trading days away. I will decide on Monday whether to continue with the trade or get out.

It is a good trade, 2morrow If there is any thing wrong with RBI policy , u will get reward. :thumb:

 

[gmt900]

I found that this trade has a very good R/R ratio. Probably it is because the difference in strike prices is 50 points. I will have to check out a few more trades before coming to a definite conclusion. I feel that if one can consistently trade with similar RRR there is a good chance of one being in the green over a period of time, say one month.

 

[ananths]

I found that this trade has a very good R/R ratio. Probably it is because the difference in strike prices is 50 points. I will have to check out a few more trades before coming to a definite conclusion. I feel that if one can consistently trade with similar RRR there is a good chance of one being in the green over a period of time, say one month.

Hi gmt900,

Yes...it should be good RR and a good plan.
Also we need to check few things like IV, OI and direction of the market.
In this case market is almost at a high and a fantastic run from the lows...so some profit booking can be expected in coming days..
You got these max pain data from healthraj's thread thats good...I wanted to download the XLS tool for a long time..today I'm going to download and see how it works. :thumb:

 

[ananths]

@gmt900,
Whats the status of your spread now?

I could not trade today...missed such a good day for trading
So no position as of now...but will enter on Monday.