SH's MArket Correction Prediction Strategy

[anilnegi]

Dear Prem

i am not following this system, the data is just for checking the end result of strategy, will update later on, regarding exit strategy already mentioned we exit all of our trade till one of them become In the money(ITM).

thanks

anil negi

 

[TraderPrem]

Dear Prem

i am not following this system, the data is just for checking the end result of strategy, will update later on, regarding exit strategy already mentioned we exit all of our trade till one of them become In the money(ITM).

thanks

anil negi

Hi anilnegi,

As per my understanding we buy both Call and Put and wait till the expiry of it.

Please elaborate any one. Now Nifty has gone far from 100EMA today.

Prem.

 

[VJAY]

Hi anilnegi,

As per my understanding we buy both Call and Put and wait till the expiry of it.

Please elaborate any one. Now Nifty has gone far from 100EMA today.

Prem.

any one of them when comes in the money we exit position.....

 

[anup]

Hi anilnegi,

As per my understanding we buy both Call and Put and wait till the expiry of it.

Please elaborate any one. Now Nifty has gone far from 100EMA today.

Prem.

Why you want to wait till Expiry? .. For ex: 5800 CE and 5700 PE we have taken.. 5800 CE has become in time and is trading at 255, which i bought it at 150 and also 5700PE is trading at 69 which i bought it at 130... So now my total pair is trading at 255+69= 324, My cost of the pair is 280... 44 points profit in one single lot..

 

[TraderPrem]

Why you want to wait till Expiry? .. For ex: 5800 CE and 5700 PE we have taken.. 5800 CE has become in time and is trading at 255, which i bought it at 150 and also 5700PE is trading at 69 which i bought it at 130... So now my total pair is trading at 255+69= 324, My cost of the pair is 280... 44 points profit in one single lot..

OK now I got it, I have to follow it to understand it properly.
One doubt how could we get loss in this.

Thanks a lot anup,
Prem

 

[anilnegi]

Lets check

Out of money call 5750- 180.05 as on 30.09 today 287.25
Out of money call 5800- 153.95 as on 30.09, today 256.95
&
Out of money Put 5700- 137.05 as on 30.09 today 69.60
Out of money Put 5650- 120.00 as on 30.09 today 60.95

Now
5750 call+5700 put= 180.05+ 137.05- 287.25 + 69.60= 39.75 per lot profit
5800 call + 5650 put= 153.95+120.00-256.95+60.95= 43.95 per lot profit
5750 call + 5650 put= 180.05+120.00- 287.25+60.95= 48.15 per lot profit
5800 call + 5700 put= 153.95+137.05- 256.95+69.60= 35.55 per lot profit

choose your pick, thanks SH

anil negi

 

[TraderPrem]

Lets check

Out of money call 5750- 180.05 as on 30.09 today 287.25
Out of money call 5800- 153.95 as on 30.09, today 256.95
&
Out of money Put 5700- 137.05 as on 30.09 today 69.60
Out of money Put 5650- 120.00 as on 30.09 today 60.95

Now
5750 call+5700 put= 180.05+ 137.05- 287.25 + 69.60= 39.75 per lot profit
5800 call + 5650 put= 153.95+120.00-256.95+60.95= 43.95 per lot profit
5750 call + 5650 put= 180.05+120.00- 287.25+60.95= 48.15 per lot profit
5800 call + 5700 put= 153.95+137.05- 256.95+69.60= 35.55 per lot profit

choose your pick, thanks SH

anil negi

Hi anilnegi,

Wow, all are in profit per lot.
My question is what must go wrong to get a loss.
Presently I am studying on this subject options may take time to understand what you have shown. Everything is going over my head.

But thanks a lot you are trying to explain.

Prem.

 

[anup]

Hi anilnegi,

Wow, all are in profit per lot.
My question is what must go wrong to get a loss.
Presently I am studying on this subject options may take time to understand what you have shown. Everything is going over my head.

But thanks a lot you are trying to explain.

Prem.

Ok..Lets come to the risk part of the trade..
We can get loss only during two conditions
1.The nifty if it doesnt move for many days and if it stays at our buy price due to time value decay we will loose our premium
2.The volatility of the nifty comes down dratsically and this will reduce our premium..

As per my knowledge these are two criteria where we can loose our money..

Expert please comment

Regards,
Anup

 

[TraderPrem]

Ok..Lets come to the risk part of the trade..
We can get loss only during two conditions
1.The nifty if it doesnt move for many days and if it stays at our buy price due to time value decay we will loose our premium
2.The volatility of the nifty comes down dratsically and this will reduce our premium..

As per my knowledge these are two criteria where we can loose our money..

Expert please comment

Regards,
Anup

Thanks a lot Anup,
That means there are less chances of getting loss in options.
That's why it must be difficult for me to understand.
After going through some books and paper trading for some time I will raise Question if in doubt.

Thanks again
Prem

 

[anilnegi]

Ok..Lets come to the risk part of the trade..
We can get loss only during two conditions
1.The nifty if it doesnt move for many days and if it stays at our buy price due to time value decay we will loose our premium
2.The volatility of the nifty comes down dratsically and this will reduce our premium..

As per my knowledge these are two criteria where we can loose our money..

Expert please comment

Regards,
Anup

Perfect, the point is we should stay away from this strategy at the time expiry (last week), otherwise it is just a holy grail

anil