So anybody is actually in profits just trading Options

[comm4300]

I don`t look at VIX. It is for the buyers and not sellers. coz buyers have to buy and exit now and then and should not keep position as time decay will eat them whereas sellers have to keep their position for 20/30 days for eating time decay. Even if the volatility increase /decreases though the premium increases /decrease the profit potetial is same . Premium changes temporariy but the theory remains same

nicely explained. i thought the rule of thumb was :
VIX high = sell options
VIX low = buy options

but, nice logic about time value shared by you....
Thank you....

 

[columbus]

Self-explanatory answer to this thread.

 

[summasumma]

Hi all, sorry for being late replying I was busy for a while making money :thumb:
Thank you all for paying attention to my words, proceeding with my post let's first talk credit spread:
since time decay is your enemy so if you decide to take it on your side you need to write options; but writing options contains immense risk so buying a protective call/put against your short position creates a credit spread for you. For both markets trending/nontrending you always have a credit spread as Bullish Put Spread, Bearish Call Spread, Long Condor etc. Having a credit spread rewards you even if market moves to your anticipation, hangs around there and protects your position if it's against your opinion.
So far OTM call/put are concerned the problem is within delta if you are on long position; but I consider spot and 2 nearing position as ATM so if you are trading them it's not a problem. Trading ITM will also not rewards you well since delta will never become 100% so ATM pays you the best.
Spreads are only advised if you keep overnight position since not a lots of broker allow multi leg order so spread are not good for intra day trade.

Hope I am contributing to as per expectation

regards

virendra rao

Hi virendra,

Thanks for the informative posts.
You have mentioned that you have started with 17k. But for shorting a option itself needs margin = one nifty future lot as per my understanding. Is this correct? If so, how you have managed to short nifty option.

Can you also please clarify the following queries::

How much margin is blocked by your broker per credit spread entry? (i.e, sell one nifty option and buy one nifty option)

Does your broker allow you to place multi-leg order with LIMIT so that you can get the credit as expected? can i know who is your broker?

Thanks,
...Summasumma

 

[comm4300]

Hi virendra,


How much margin is blocked by your broker per credit spread entry? (i.e, sell one nifty option and buy one nifty option)

from zerodha's FB page :

Zerodha
Margin required to write Options on overnight basis(22/07/2011)
NIFTY11JUL5100PE Required:16874.47
NIFTY11JUL5200PE Required:16899.92
NIFTY11JUL5300PE Required:17028.25
NIFTY11JUL5400PE Required:17340.05
NIFTY11JUL5500PE Required:18460.88
NIFTY11JUL5600PE Required:20956.12
NIFTY11JUL5700PE Required:25024.97
NIFTY11JUL5800PE Required:29785.92
NIFTY11JUL5900PE Required:34587.90
NIFTY11JUL6000PE Required:39699.70
NIFTY11JUL6000CE Required:16844.47
NIFTY11JUL5900CE Required:16860.83
NIFTY11JUL5800CE Required:16971.20
NIFTY11JUL5700CE Required:17285.80
NIFTY11JUL5600CE Required:18295.50
NIFTY11JUL5500CE Required:20675.08
NIFTY11JUL5400CE Required:24750.17
NIFTY11JUL5300CE Required:29592.85
NIFTY11JUL5200CE Required:34657.75
NIFTY11JUL5100CE Required:39761.93

of course, we don't get any spread benefit on margin front.

add to the above the buying cost of option [premium x lot].

 

[columbus]

As far as AUG'11 OTM calls options are concerned,even a rise of 40 points could not see them closing in POSITIVE side.

 

[taruj]

I am making money in options by the grace of God and till then untill I have that blessings of god on me
Karte hain mere Data mera Naam Ho rahaa hai

Do you sell/ write options?
I want get started however all the information in all the threads are very confusing. Any help would be great...

Rgds

 

[ajshare108]

65-70% option go worthless hence option selling is more profitabe if sell far away out of money options (only for NIFTY Traders).

 

[sumeetsj]

I started trading long in Options again after a gap of almost 3 years,
(i was exclusively options trader for 2+ years earlier to that and then left it)..

In just past 2 trades i am earning and feels good to be back in the game.
This is a nice thread and shall keep posting my trades.

Regards

 

[sumeetsj]

My first trade was:

On the day of August Expiry, i bought 4900 CE
the link to the post in Nifty:Real time discussions is here..
http://www.traderji.com/futures/55174-nifty-real-time-discussions-218.html#post581009

And added more and got out, link is
http://www.traderji.com/futures/55174-nifty-real-time-discussions-218.html#post581090

It was a decent way to start i guess(at least for me)

 

[sumeetsj]

Now this is my second trade:

http://www.traderji.com/futures/55174-nifty-real-time-discussions-219.html#post581298