Option Logics

[Somatung]

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

@TH

You can play any strategy during expiry. It all depend how you handle them. I appreciate your afford to find some thing suitable for those days and present it here, but I am afraid your search will end any where with many strategy but no real trading plan. I also can see that you are interested in strategies which do the up and the down side. I mean that is fine.

Now let's go to your comment about that you like to play naked puts and calls, which is new, as you mentioned in the past not to like leg in strategies. No problem. Now let's assume you did such a naked call or put according to your market view one or a few days before expiry and now you want to use this leg to play the expiry day.

Did you ever try to play this way? and if not, what would be a problem for you to do so? I am not fighting against you with this post. This post is meant to stay with you. Now lets assume you have some profit with this long or short call or put and now you want to play this specific day. What would be your next move?

You not have to post any thing about my comment nor do you have to talk about, it as I do not need your answer. But YOU MAY think about this if you want and do the best with it, as if you start to have also a look in that direction, you will find many answers you may are interested in. Take care

 

[toughard]

You can play any strategy during expiry. It all depend how you handle them. I appreciate your afford to find some thing suitable for those days and present it here, but I am afraid your search will end any where with many strategy but no real trading plan. I also can see that you are interested in strategies which do the up and the down side. I mean that is fine.

this is self explanatory.. no need my answer

Now let's go to your comment about that you like to play naked puts and calls, which is new, as you mentioned in the past not to like leg in strategies. No problem. Now let's assume you did such a naked call or put according to your market view one or a few days before expiry and now you want to use this leg to play the expiry day.

It look like you have misunderstood concept of legging

Did you ever try to play this way? and if not, what would be a problem for you to do so? I am not fighting against you with this post. This post is meant to stay with you.

I dint understand a single bit of it...

Now lets assume you have some profit with this long or short call or put and now you want to play this specific day. What would be your next move?

its an hypothetical question!

You not have to post any thing about my comment nor do you have to talk about, it as I do not need your answer. But YOU MAY think about this if you want and do the best with it, as if you start to have also a look in that direction, you will find many answers you may are interested in. Take care

unwanted lines


Final request...
its good or bad, many of us just don't want anything from you.. Please do Spare my thread and GO AWAY... mind one thing, you are not fit to be
disappointed!

Ps- I take a screen shot of this comment ASAP.... so that it will save your money

 

[toughard]

Well, If one have a bearish view then they can employ Rajeev's Combo Idea which is executed here based on following facts-
# 8000CE as highest OI (>7M !!)
# selling 8100 CE will provide two edges- they have good premium & it will get hidden behind the 8000 CE's big OI for safety
# Risk well behind 8100 spot levels
# Pay off is well balanced as PE bought is for FREE
# This as of now FREE trade needs 70000 (based on http://zerodha.com/margin-calculator/SPAN/) which can be considered as INVESTED
# Its IN PROFIT structure

Lets see how it get progressed !

 

[toughard]

Dear all, here is Simple OI Table which is self explanatory while the 2 MAX PAIN numbers represent Max Pain derived using all the strikes and Max Pain derived from 9 nearest strikes respectively.

Based on some old conclusion like "Option Pain is a very interesting theory, proposing a very interesting use for Open Interest derived from options trading. Even though it has no firm fundamental logic nor has it generated any consistent results that can be empirically proven for options trading, it is no doubt a good attempt at deriving more useful information about future stock prices from the concept of Open Interest.Its advised caution in attempting to use Option Pain in your options trading." I have not tracked this since long but since last few months its working!!!


Feedback from traders who are seriously following the concept of OPTION MAX PAIN are welcome!

Thanks...

 

[toughard]

Combo Spread is @ +7050
Risk Reversal @ +2810
Bearish Strategy @ + 790
Condor @ +35
Bullish Strategy @ -1765
All are Notional figures as per today’s EOD

After good action OI Matrix is almost same specially MAX OI & MAX PAIN segments!!

 

[toughard]

Well Friends,

Even after the fact that trading options(earning from option) demand more skills than dealing with Futures/Equities, still some people prefer only option trading.

As per my knowledge majority of option traders are skeptical about their own abilities on studies resulting in market direction identification! me too!!

Incidentally., came across one study ( may be old for many here) where it climes 12500 nifty pints from 100+ trades since June 2011, the study is-
https://docs.google.com/spreadsheets/d/1dESqVIu1qLjYFCRiF6nESimLZXLgL03-9PAX1cLCvFI/edit?pli=1#gid=0

Just keeping a tab on this for possible futures swing trading!!

Take Care

 

[toughard]

Our both side structure is @ +1800 today!

Few seasoned traders have the following opinions-

Rohit Srivastava of IC said- The AUTOmated system will go short today if Sensex closes below 25485(it closed below), one day before the budget momentum indicators and trading systems are all going into sell short mode meaning that the wedge is complete and a disaster awaits tomorrow and world wide people are long Call options from New York to Mumbai.
Not good.
The system has never gone short before budget day.

Creator of JNSAR said "Nifty has prepared the ground, with a huge fall ahead of "Budget day", for a highly choppy session... "

which made me interested about two things-

What would be real meaning of "disaster" in market!!
How one can predict the "choppy session" too!!!

Take care

 

[toughard]

Condor is @ +1425
Combo Spread @ +10050
Both Side Structure @ +3850
Bullish Structure @ +2650
Bearish Structure @ +2200

Risk Reversal @ +3700 (Exited as near to BE awa it provided profitable exit)

Choppy Achieved!! Disaster Awaited??

 

[healthraj]

Hi,

In Layman terms, What is a Condor?

Is it is Bullish or a Bearish strategy or a Neutral Strategy ?

What is the Role of IV in Condor ? Does it Affect or is it neutral ?

In a normal situation let us say we apply this on NIFTY options, Is it a Daily / Weekly / Monthly strategy ?

I have been using some simple strategy using open Interest and Change in Open interest and Price movement, which has been giving decent returns.

But I want to know how different is Condor and what would be the returns?. Of course I can google it and find out But I just wanted to know since you have been using it.

 

[toughard]

Hello Healthraj,

At the outset, as of now for me condor means Iron Condor! Please see http://www.traderji.com/options/94520-option-logics.html#post979619 for the sake of ease I toss them as condors

In Layman terms, What is a Condor?

In Layman terms, Iron Condor is an Safe Income Generating Option strategy with Good RRR!

Is it is Bullish or a Bearish strategy or a Neutral Strategy ?

What is the Role of IV in Condor ? Does it Affect or is it neutral ?

Condors are played with an intention to take advantage of a neutral outlook and/or high implied volatility
And also
They are usually used in cases of high implied volatility and expectations of range-bound underlying once the IV cools off at the determined price point.

In a normal situation let us say we apply this on NIFTY options, Is it a Daily / Weekly / Monthly strategy ?

#Traders who are good at anticipating IV behavior on daily basis can opt for ATM/JOTM condors (not iron condors) as DAILY trades.
#Traders trading on markets S/R basis can play Iron condors aiming Res when price is at/near supports and vice versa on WEEKLY basis.
#Traders intending for monthly income can play Iron condors on MONTHLY basis by using Highest OI and VIX Range to identify possible range that market may expire!

I have been using some simple strategy using open Interest and Change in Open interest and Price movement, which has been giving decent returns.

Nice, simple things always work! Good luck on your further returns.

But I want to know how different is Condor and what would be the returns?

It will be great if you can create a comparison between your strategy and condor as you may be knowing the in and out of your strategy.

Of course I can google it and find out But I just wanted to know since you have been using it.

I am using it for the purpose of its behavioral analysis along with different strikes combination and other factors.