Options Adjustments

[lemondew]

Nifty @ 7427

buy 7100 @ 16.7
sell 7000 @ 9.55

sell 7200 @ 29.55
buy 7100 @ 16.7

Carry forward
Sold 7500 CE @ 54
Bought 7600 CE 26.9

Total Profit/loss = +6

Nifty @ 7415
buy 7200 36.65
sell 7100 21.40

Sell 7100 21.4
buy 7000 12.35

Profit/loss = +4

Carry forward
Sold 7500 CE @ 54
Bought 7600 CE 26.9

 

[toughard]

By doing this we are able to achieve all legs above zero line CE side become fool proof now..
Please see...

IMAGE updated....
this type of trades can be conducted for multi purpose like...
1- profit protection
2- profit enhancing

Most importantly we are already achieved ASSURED 6% on 40000 invested(if single lot trade) on CE side alone!!! and potential is left for up to 15% profits

 

[toughard]

IMAGE updated....
this type of trades can be conducted for multi purpose like...
1- profit protection
2- profit enhancing

Most importantly we are already achieved ASSURED 6% on 40000 invested(if single lot trade) on CE side alone!!! and potential is left for up to 15% profits

Okay the final adjustment for the day is here......
Total legging trade is becoming almost zero liable.... lets make it a free trade by next dip in the market by adding one leg on put side
Assured profit enhanced to 10% and open potential is at 25% app.... on CE side
Please see the chart for both....

dear Lemondew & dear all hope this concluded one round of legging adjustment based on our 3rd trade...

 

[lemondew]

Attached the payoff and structure. As per my understanding this strategy costed you 29000 odd not 40000. Can u pls clarify.
http://imgur.com/a/PvmwA

By doing this we are able to achieve all legs above zero line CE side become fool proof now..
Please see...

 

[lemondew]

DEleted

*-*-*

 

[lemondew]

Another info short covering at 7400CE of -2.6 lacs of total 36 lacs or short covering of 7.2 %. Whether the market movers are moving out or small time traders I dunno.

Thanks.

 

[lemondew]

hi tough,

You meant CE selling@134 and coverting you strangles into a butterfly?? Was that what you were saying. If you notice your straddle at 7300 which was (156.2+78.7) 235 is now worth 271. 37 points profit. Just take it and rejoice. What if market had remained lull and your 234 was worth around 200. In that case your sell would have fetched far less. What strategy at that point?


You trying to suggest the IVS swing from CE to PE side . Thats when you will sell?? Ivs crashing could cause a problem i think. Ivs going up would benefit. Could you pls summarize what you are trying to achieve.

For the 3rd trade added leg with 7400 CE buying 100 @ 134.00

 

[toughard]

hi tough,

You meant CE selling@134 and coverting you strangles into a butterfly?? Was that what you were saying. If you notice your straddle at 7300 which was (156.2+78.7) 235 is now worth 271. 37 points profit. Just take it and rejoice. What if market had remained lull and your 234 was worth around 200. In that case your sell would have fetched far less. What strategy at that point?

You trying to suggest the IVS swing from CE to PE side . Thats when you will sell?? Ivs crashing could cause a problem i think. Ivs going up would benefit. Could you pls summarize what you are trying to achieve.

Dear lemondew...

yes its converted to butterfly! that was the idea behind taking longs having a gap of a strike in between.

strangle profit is partially locked by selling other CE leg at higher rate!

market will not remained lull for long as number of days to expiry is high (in option terms theta is high which is favorable for straggles, so its imp that we initiate these legging strategies early of the contract, which we did)... even if market remained lull means its accepted as its part and parcel of legging strategies...

and last but not the least...

1st-I have tried my hands Pricing Models... (for me understanding on how parity works is more than sufficient)

2nd-I understand Option Greeks... (it end up giving rough idea as practically its not accurate and over the period of time constant option trading will fix all these factors in to our subconscious so we may not need these)

3rd-I am aware of how VIX & IV work...( instead of studying/predicting these I prefer studying price chart it self)

after all these I am purely a logical option trader where I apply some common addition and subtraction to arrive at expiry values(worst come scenario) and based on few simple logics with suitable MM I play options....

 

[lemondew]

Good strategy. Enjoying it. Looking forward to see more of those.
How about starting with 1 long and 1 short on either sides than 2 longs on either sides. In that way even if market doesnt move the loss would be restricted. Just my suggestion. You may have your own reasons for doing anything.

Thanks. :thumb:

Dear lemondew...

yes its converted to butterfly! that was the idea behind taking longs having a gap of a strike in between.

strangle profit is partially locked by selling other CE leg at higher rate!

market will not remained lull for long as number of days to expiry is high (in option terms theta is high which is favorable for straggles, so its imp that we initiate these legging strategies early of the contract, which we did)... even if market remained lull means its accepted as its part and parcel of legging strategies...

and last but not the least...

1st-I have tried my hands Pricing Models... (for me understanding on how parity works is more than sufficient)

2nd-I understand Option Greeks... (it end up giving rough idea as practically its not accurate and over the period of time constant option trading will fix all these factors in to our subconscious so we may not need these)

3rd-I am aware of how VIX & IV work...( instead of studying/predicting these I prefer studying price chart it self)

after all these I am purely a logical option trader where I apply some common addition and subtraction to arrive at expiry values(worst come scenario) and based on few simple logics with suitable MM I play options....

 

[toughard]

Good strategy. Enjoying it. Looking forward to see more of those.
How about starting with 1 long and 1 short on either sides than 2 longs on either sides. In that way even if market doesnt move the loss would be restricted. Just my suggestion. You may have your own reasons for doing anything.

Thanks. :thumb:

Initially everyone will be afraid of loosing and try to avoid it...
over the period of time trades don't(cant) learn how to avoid losing completely but they learn and digest the judicious loss... now what is judicious loss? the answer is-
Presently i do consider trading as my business.. as all know even a small business today fetch X amount of fixed expenses irrespective of size of investment.. I fix an X amount every month & mentally prepare digest if that X amount is loosed after best of my efforts by thinking that this month there was not much business happened.. a judicious loss

on basis above theory(theory....
Instead of trading one lot... you have to time the the strategy by employing it after good consolidation...
Finally... I am NOT justifying my methods as these are not been followed yet as its all a trail simulations like mentioned earlier...