Option Logics

[toughard]

All time Hit, an IRON CONDOR, a perfectly skewed and protected with good RRR

Planning to review the structure by every 100 points... If it provides a profitable exit then see the chances for Rolling through Middling

There is been a 100 point rise (7500+ to 7600+ spot)
we will review the above structure by EOD

 

[toughard]

There is been a 100 point rise (7500+ to 7600+ spot)
we will review the above structure by EOD

so the first condor http://postimg.org/image/uyf1ne919/
is closed as this(@ -70), only to aline with rolling

one strike is pushed towards the price movement...
lest see how many rollings that market demands this time
the newly oped condor is like here....

 

[toughard]

one strike is pushed towards the price movement...
lest see how many rollings that market demands this time
the newly oped condor is like here.... [/COLOR][/B]

After nice move up the present condor is at -290
next review would be around 7820 ( upside risk starts from 7820)
No rolling as of now!

Its getting interested through some of the observations-

#Rolling condors (structured using both PE & CE) is not providing profitable exit @ every 100 points
# Placing condors at the beginning of the month provides good RRR
# RRR & Certainty of profit is Inversely proportional (observed over the period of time)
# even after increasing the certainty of condor with low RRR the income which is promised is attractive as its 4-5%

Next course of actions-
# Next looking to try condors using either PE or CE called as Call Condors or Put Condors
# Looking to run an high certainty condor after market finish its reaction towards budget

 

[gmt900]

After nice move up the present condor is at -290
next review would be around 7820 ( upside risk starts from 7820)
No rolling as of now!

Its getting interested through some of the observations-

#Rolling condors (structured using both PE & CE) is not providing profitable exit @ every 100 points
# Placing condors at the beginning of the month provides good RRR
# RRR & Certainty of profit is Inversely proportional (observed over the period of time)
# even after increasing the certainty of condor with low RRR the income which is promised is attractive as its 4-5%

Next course of actions-
# Next looking to try condors using either PE or CE called as Call Condors or Put Condors
# Looking to run an high certainty condor after market finish its reaction towards budget

It may be better to place condor before the expiry of the previous series.

 

[rajeevp99]

Hi,

I feel we should select an appropriate Options Strategy according to our view on the Market. Long Iron Condor is particularly suitable when the market is likely to be range bound. So if you experience one sided move, which we are experiencing in Nifty for last two days, Long Iron Condor strategy will not help.
It appears that till at least the budget is presented, there is likely to be an up-move in Nifty. So a bullish Option Strategy like, Bull Spreads or Long Combo would be useful.

Thanks,
Rajeev.

 

[toughard]

Hi,

I feel we should select an appropriate Options Strategy according to our view on the Market. Long Iron Condor is particularly suitable when the market is likely to be range bound. So if you experience one sided move, which we are experiencing in Nifty for last two days, Long Iron Condor strategy will not help.
It appears that till at least the budget is presented, there is likely to be an up-move in Nifty. So a bullish Option Strategy like, Bull Spreads or Long Combo would be useful.

Thanks,
Rajeev.

Hello Rajeev,

Based on my preliminary observation, I found that playing naked with simple buying of calls or puts are better than Long or Short Combos, as combos bring sharp risk on losing side which can be/should be avoided by naked buying of options only.

Coming to Bull Spreads, for me it look like weak betting system with 1:1 RRR almost of the time.

Thanks...

 

[toughard]

It may be better to place condor before the expiry of the previous series.

Hi Gmt900,

Can you tell us more about RRR of a condor before the expiry of the previous series? and what would be the preferred range for such early execution and how to define that range as option OI of the next series may not be that prominent?

Thanks

 

[gmt900]

Hi Gmt900,

Can you tell us more about RRR of a condor before the expiry of the previous series? and what would be the preferred range for such early execution and how to define that range as option OI of the next series may not be that prominent?

Thanks

I made this comment based on my observation in the last few months. Of course, IV plays a major role.

I entered into iron condor on 20 June for July series.

I collected a premium of 278 points as follows;

7700C :138
7500P :140

Value of the same short strangle on the expiry day on 26 June was 222;

7700C :84
7500P :138

I don't remember exact figures, but nifty moved less than 50 points during the period (7530 to 7493 )

I don't claim that this will always be so, but I feel it may be due to many participants taking positions on or after expiry.

 

[gmt900]

Hi Gmt900,

Can you tell us more about RRR of a condor before the expiry of the previous series? and what would be the preferred range for such early execution and how to define that range as option OI of the next series may not be that prominent?

Thanks

I made this comment based on my observation in the last few months. Of course, IV plays a major role.

I entered into iron condor on 20 June for July series.

I collected a premium of 278 points as follows;

7700C :138
7500P :140

Value of the same short strangle on the expiry day on 26 June was 222;

7700C :84
7500P :138

I don't remember exact figures, but nifty moved less than 50 points during the period (7530 to 7493 )

I don't claim that this will always be so, but I feel it may be due to many participants taking positions on or after expiry.

You can decide range based on OI for next series and delta values.

As you can see I entered with delta neutral position.

 

[toughard]

Further on combos...

If I am right, one should exhibit the directional strategies at S/R.
Such trades are make or break trades.
While such trades, combos will be left with 2 (both) loosing legs if it goes against the idea along with margin blocked on the selling side.

But the Idea of Combo can not be ruled out as one interesting structure based on combo concept during expiry week would be-
if you have long view then BUY ATM CE 1 lot and SELL 2 STRIKES OTM PE 2 lots when price around multiples of 100 (BRN- Big Round Number)...

Thanks Rajeev for your previous inputs.

So by now we have 2 strategies that should be played during expiry, and they are-
1. Ratio Combo
2. Reverse Butterfly