Option trading with DanPickUp

[niftytaurus]

Dear Dan,
I completely understand butterfly strategy you have mentioned. I won't jump into the trade without understanding it. I have read most of the options strategies in the net...few are bit difficult to implement in NSE. One such strategy is calendar spread. NSE doesn't provide that flexibility to the trader..you will see maximum 3 months options.However liquidity is very low for the next month options. One more drawback is strike price is 100 points for index options..and stock options are not liquid at all. So I used to prefer option writing in Nifty. It worked till certain point. To be frank i was successful to judge the market direction and made some money for the past one year. Now i have realized writing options is a high risk business and burnt my fingers last month!..however I still protected my capital and some profit I was lucky i should say...now i will shift to a better trading technique like the one I mentioned above. I should enjoy trading as well as make some profit out of it. My knowledge in TA is bit low...after reading few posts in this forum, i'm really interested to learn TA. I will put effort to find out technical and how it needs to be used to find market direction. I know there is no easy money in any business If you have any good links to learn TA let me know..Thanks once again. :thumb:
Regards,
Ananth

hi ananth
i have been reading ur posts.u have been profiting in indian market in option. im a new option trader ..can u share some advice how to start option trading? what all have to read & learn?

 

[DanPickUp]

hi ananth
i have been reading ur posts.u have been profiting in indian market in option. im a new option trader ..can u share some advice how to start option trading? what all have to read & learn?

Would request you to post your problems in your own thread or any where else and to leave this thread. Thank you

 

[niftytaurus]

Hi Dan
I have read all the post in this thread .Its really very informative.I have also made notes what main subjects u have chosen in starting.it give me a good foundation.Thank u very much for all effort you are doing.its very appreciable that u r helping people selflessely that is very rare in this world.hats off to u.
as i told u I am a new trader.my trading platform is india -nse.my broker is icici.I do some trades purely on directional bases.But after reading TA, i can say that was only speculation.I was determined to make money in option trading.so I started studying by books.what i have learned from your posts are as you put ocean of option knowledge in it.once again thak u very much for it.
I have watched super trader Caran interview.she make 40 million only in option trader.a big applause to that lady.that video inspired me a lot.I am ready to put that much efforts on my study.what i have understand that she is selling 5 % probability otm option & adjust her position according to market change.she used 56 days time frame,8 weeks.but in india,we have 3 monthes option only in nifty.most stok options have only 1 month time.
could you light on subject that how we can use probabilty in option trading to make profit.
can we make a plan based on probability?

 

[DanPickUp]

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[niftytaurus]

hi members
could any member tell me what wrong have i written in that post? why Mr Dan is getting angry so much & abusing? why is he telling me cheater & all...what wrong did I do to make him angry so much?
what wrong have i done in this forum...as a senior member I have been appreciating & prasing him.& he is abusing...

 

[timepass]

Would request you to post your problems in your own thread or any where else and to leave this thread. Thank you

Hi Dan
I have read all the post in this thread .Its really very informative.I have also made notes what main subjects u have chosen in starting.it give me a good foundation.Thank u very much for all effort you are doing.its very appreciable that u r helping people selflessely that is very rare in this world.hats off to u.
as i told u I am a new trader.my trading platform is india -nse.my broker is icici.I do some trades purely on directional bases.But after reading TA, i can say that was only speculation.I was determined to make money in option trading.so I started studying by books.what i have learned from your posts are as you put ocean of option knowledge in it.once again thak u very much for it.
I have watched super trader Caran interview.she make 40 million only in option trader.a big applause to that lady.that video inspired me a lot.I am ready to put that much efforts on my study.what i have understand that she is selling 5 % probability otm option & adjust her position according to market change.she used 56 days time frame,8 weeks.but in india,we have 3 monthes option only in nifty.most stok options have only 1 month time.
could you light on subject that how we can use probabilty in option trading to make profit.
can we make a plan based on probability?

hi members
could any member tell me what wrong have i written in that post? why Mr Dan is getting angry so much & abusing? why is he telling me cheater & all...what wrong did I do to make him angry so much?
what wrong have i done in this forum...as a senior member I have been appreciating & prasing him.& he is abusing...

Dan has clearly mentioned what he wants in his thread and what not. He has clearly told you not to mention your personal trading issues here. He only wants queries/posts related to options trading, from the members who have studied the strategies he has mentioned in the thread, and post intelligent queries, rather than general ones like "how to make money from the markets", or "how to recover my losses".

 

[gmt900]

Hi Dan,
I have a rather an amateurish query.
I have entered into 6000CE/ 5600PE short strangle for May series. I want to hedge this position over the week end. I have gone through your post on various ideas for hedging. I intend to buy 6100CE around 26 rs and sell 5700PE around 33 rs.
If the market does not move substantially in either direction over the weekend, should I cover both positions and watch further movement of market for action to be taken, if any ?
I know this will depend largely on my reading of the market movement, but if you could guide on what the thinking process should be, that would be great.
Thanks and regards,
gmt900

ps: the reason I am asking the question is , we new option traders do not know how the option prices behave with all the option greeks influencing them

 

[DanPickUp]

Hi Dan,
I have a rather an amateurish query.
I have entered into 6000CE/ 5600PE short strangle for May series. I want to hedge this position over the week end. I have gone through your post on various ideas for hedging. I intend to buy 6100CE around 26 rs and sell 5700PE around 33 rs.
If the market does not move substantially in either direction over the weekend, should I cover both positions and watch further movement of market for action to be taken, if any ?
I know this will depend largely on my reading of the market movement, but if you could guide on what the thinking process should be, that would be great.
Thanks and regards,
gmt900

ps: the reason I am asking the question is , we new option traders do not know how the option prices behave with all the option greeks influencing them

Hi Gmt900

You have a short strangle and you want to hedge it with a put/call spread. What is the deeper sense behind that?

In case market stays where it is now:

Long 6100 call loses money over the weekend. +
Short 5700 put loses money over the weekend. -

Short 6000 call looses money over the weekend. -
Short 5600 put looses money over the weekend. -

The upper side of your trade then would be hedged with your long 6100 call and the down side would be even more open, as you have an other short there which is the short 5700 put. Here you even double your risk. I do not get the point of that. Sorry.

Your market had a nice long green candle with strong volume, which could be a sign, that market next week could go up. (No guarantee for that and no advice in any way). So the long call makes sense in case market opens with a gap up on Monday morning. It surely also depends on the close today.

On the down side it would need a fall of over 200 points to hit your break even. Here you doubled your risk with an other short. My advice: Be careful with such kind of legs. Why double your risk on that side? If you want to be short on the downside, keep just one leg on that side and if you want to be hedged on the upside, go long the 6100 call or even the 6200 call. Depends how much profit you already made with the trade.

Again: Any hedge is: How much money can I lose and how much money can I win. If I am in profit, how much is it and what do I get for it.

Good trading / DanPickUp

@Timepass: Thanks

 

[gmt900]

Hi Gmt900

You have a short strangle and you want to hedge it with a put/call spread. What is the deeper sense behind that?

In case market stays where it is now:

Long 6100 call loses money over the weekend. +
Short 5700 put loses money over the weekend. -

Short 6000 call looses money over the weekend. -
Short 5600 put looses money over the weekend. -

The upper side of your trade then would be hedged with your long 6100 call and the down side would be even more open, as you have an other short there which is the short 5700 put. Here you even double your risk. I do not get the point of that. Sorry.

Your market had a nice long green candle with strong volume, which could be a sign, that market next week could go up. (No guarantee for that and no advice in any way). So the long call makes sense in case market opens with a gap up on Monday morning. It surely also depends on the close today.

On the down side it would need a fall of over 200 points to hit your break even. Here you doubled your risk with an other short. My advice: Be careful with such kind of legs. Why double your risk on that side? If you want to be short on the downside, keep just one leg on that side and if you want to be hedged on the upside, go long the 6100 call or even the 6200 call. Depends how much profit you already made with the trade.

Again: Any hedge is: How much money can I lose and how much money can I win. If I am in profit, how much is it and what do I get for it.

Good trading / DanPickUp

@Timepass: Thanks

Thanks Dan,
The idea in selling 5700PE was to get back the premium paid for buying 6100C. But, after reading your reply, I realise that it is not the right thing to do. Managing such trades is really challenging and it is far more satisfying than speculating the market direction. At the same time , one would attain profficiency only thr' practice. I intend to take small positions till I get the hang of the process of adjusting the trade and then increase the position size step by step.
Thanks again for your help,
gmt900

 

[The Predictor]

Hey dan! Wassup ?

Don't go long folks.. Market will go down and down. Ultimate target 5600/5450/5200 . It may sound nasty but it will be reality . Fall is due, it will be huge!
Time period- very short (within 1-3 months frame) !!

Go long only above 5970 nifty spot.

Just shared my views.. =)

Cheers,