Option trading with DanPickUp

[jain.er]

@ Dan and all

sorry for not being clear in what I want to say

So I just wanted to illustrate a hypothetical example of what Dan just said about short straddle

so Explaining my self once again.....

Say spot Nifty is @6000
sell one ATM each PE and CE say total Premium earned is 150

Now assume we can take a total loss of 200 Nifty points
Nifty fell to 5800

Now What to Do ?
1. Buy back 6000PE and sell 5700PE
2. Other strategy I could not understand (did it meant buy CE at PE breakeven and vice versa if that so then how are we protecting ourself say in the above example)

Hope I am clear now

 

[DanPickUp]

Dear Jain.er

Read this thread in which is shown and discussed how a short straddle can be traded. http://www.traderji.com/options/74905-advanced-nifty-option-strategies.html#post733503 When we are in such a trade we act when it is needed and we do not wait until we are in danger. In the mentioned thread I gave many inputs how, when and why we have to act.

Good trading

DanPickUp

 

[DanPickUp]

actully sir i'm an engineer at wipro being a science student i don't hav strong knowledge about binary options but some of my friends do trade on this site i.e., www.bbinary.com so i just want you to have a look at this site i.e., bbinary.com and tell me should i invest or no..........plz sir awating 4 rply

Dear nj_

http://i.imgur.com/4QRF0.gif

Token from this thread: http://www.traderji.com/beginners-guide/78510-buy-sell-calls-signals.html#post761410 and thanks to dear Mihir Bijur to show that link in post 5. :lol:

Now seriously: I not can do this decision for you. If you want to invest your money on such links, you must ask for a proven record from any of there past posted trades. That is the only way you will have a prove that they do well.

By the way: I hope you do not try to advertise this page and if you post once again the link, it will be reported.

Good luck

DanPickUp

 

[rksh]

Dear Sir,

Is it possible to earn profit by buying otm call and put simultaneously say of Rs. 10 premium around each of at least 1 month expiry? If these expire useless then the loss would be only the amt. of premium paid for these i.e. around Rs. 1000 for 2 lots plus brokerage.

 

[DanPickUp]

Dear Sir,

Is it possible to earn profit by buying otm call and put simultaneously say of Rs. 10 premium around each of at least 1 month expiry? If these expire useless then the loss would be only the amt. of premium paid for these i.e. around Rs. 1000 for 2 lots plus brokerage.

Hi dear Rksh

What you mention is called a long strangle. A long strangle is implemented when the underlying has a low volatility and we expect a stronger move in either direction. The maximum risk you face is the loss of the premium on both sides you paid when entering the market. So you did understand and interpret that in the right way. :thumb:

Making money with a strangle can be done in different ways. As you like to enter it at once and to enter otm, then I recommend you to analyze the range of the market in the past two or three months. Why that time frame? As you want to hold the strategy for about one month, you will have an idea about the range the market could make in that one month time frame.

If you want to make any money with a long strangle, one of the options must become at least atm or itm in the time you hold them. As you choose the otm options, market has to move to any of your needed break even points to become profitable. So choose your range wisely in case you only want to implement the strategy and then just wait what happens.

Good trading

DanPickUp

 

[gmt900]

Hi DanPickUp,
I had a useful interaction with you on the the thread "Advanced Nifty Option Strategies".
I had traded with short strangle strategy in the past where I have tried to follow delta neutral strategy.
I would like to try it once again.
I have sold 6200C and 6000P @ 61.95 and 55.80 resply for Feb series for a total premium of 117.75. I will try to keep this till end of the series with adjustments required to keep the strategy delta neutral.
While I have tried this before, sometimes I have not be able to manage to keep the trade delta neutral for some reasons like not being able to access account while travelling and the like.
I will post whenever I take action to modify trade. Generally, I don't take action till the option goes ITM. So, I may not take action till NIFTY spot goes below 6000 or above 6200. Breakeven is 5882.25 on lower side and 6317.75 on the higher side.
If I am likey to be away when I may not be able to access my trading account, I will square off the positions with whatever profit/ loss at that point.
I will be grateful if you could give advice for this trade.
thanks and regards,
gmt900

 

[DanPickUp]

Hi dear Gmt900

Yeap, remember you. Not much to say to your strategy as most of the points have been spotted on in the thread you mentioned. What you surely should do is to place stop loss orders now by your broker, as you not always are on top of the market.

Stop loss can be done by buying back the short leg or by going long the next strike, what then means that you would have a credit spread on the side you get filled. Here you have to be familiar with the order possibility's your broker offers. http://www.traderji.com/options/66266-option-trading-danpickup-7.html#post649176

If you keep in mind what was posted in the thread you mentioned (when and how to act), there should be no big problem for you to bring that trade home with profit. What was posted can be used as your trading plan and you can in advance decide how you want to act when market does this or that.

Good trading / DanPickUp

 

[timepass]

Hi dear Gmt900

Yeap, remember you. Not much to say to your strategy as most of the points have been spotted on in the thread you mentioned. What you surely should do is to place stop loss orders now by your broker, as you not always are on top of the market.

Stop loss can be done by buying back the short leg or by going long the next strike, what then means that you would have a credit spread on the side you get filled. Here you have to be familiar with the order possibility's your broker offers. http://www.traderji.com/options/66266-option-trading-danpickup-7.html#post649176

Good trading / DanPickUp

That's an interesting way of keeping the stoploss. Should it be done at the time of selling the current option ?

What would this three-legged spread be called ?

 

[DanPickUp]

Hi TP

I may have to explain it a bit deeper to not spread confusion. It is a bit unclear the way I posted it.

First you implement your short strangle. Best to do that is when market is in a range and makes swings up and down.

Now instead of using the idea to close the legs, we plan our trade in a different way with a more advanced idea. What would that be?

As market swings, you would buy your long call when market is at Support, means then the call is cheap. This then is your call credit spread on the Resistance side, which is at the same time like a stop loss.

The same you will do with the long put when market is on the Resistance side and then you have also here your stop loss with your long put credit spread.

All four legs together are called: Long iron condor.

If it comes to the situation that only one side is filled, then you have only a three leg spread and for that situation I do no specific strategy name.

Hope that clears the confusion.

Good trading / DanPickUp

 

[timepass]

Is Long Iron Condor usually executed in phases ? Does one have to monitor the setup continuously ?