Hi Lincoln,
Not seen you from many days!
Lion is in the Den .. Not sleeping for sure.
I don't know, I can't stop myself from reading your strategy even in real time I am not practising it as I can't stay in front of computer all day along
Using your strategy.. If I can reduce my profit limit But keep it simple
Is this possible ?
Suppose I do the first job right i.e picking the right proce for straddle.
Hypothetical example:
For Sep 5500 straddle
115+106=221 premium received
Margin Blocked: 42K (Higher side, I know yours is lower)
Brokerage paid: 250 (Higher side)
Now spot price is 5460
Ideal situation, I want to be in , Short below 5500 and Long above 5500 .
Nothing else, I don't want to buy/sell in between future, Only interest is IN eating premium
(May defeat purpose of your strategy But as I don't want to sit all day But I have someone who can watch TV and tell me if position get close to 5500 again tell me to reverse OR I can place the reverse order also as stop trigger)
1) Is it possible
2) Is it as simple as it sounds
3) Since spot price is 5460 already below 5500 then I should short immediate as soon as I take the premium.
4) When can this strategy turn into a loss or no profit at all.
Thanks Lincoln and other experts
Please advise
Kaps:thumb:
Not seen you from many days!
Lion is in the Den .. Not sleeping for sure.
I don't know, I can't stop myself from reading your strategy even in real time I am not practising it as I can't stay in front of computer all day along
Using your strategy.. If I can reduce my profit limit But keep it simple
Is this possible ?
Suppose I do the first job right i.e picking the right proce for straddle.
Hypothetical example:
For Sep 5500 straddle
115+106=221 premium received
Margin Blocked: 42K (Higher side, I know yours is lower)
Brokerage paid: 250 (Higher side)
Now spot price is 5460
Ideal situation, I want to be in , Short below 5500 and Long above 5500 .
Nothing else, I don't want to buy/sell in between future, Only interest is IN eating premium
(May defeat purpose of your strategy But as I don't want to sit all day But I have someone who can watch TV and tell me if position get close to 5500 again tell me to reverse OR I can place the reverse order also as stop trigger)
1) Is it possible
2) Is it as simple as it sounds
3) Since spot price is 5460 already below 5500 then I should short immediate as soon as I take the premium.
4) When can this strategy turn into a loss or no profit at all.
Thanks Lincoln and other experts
Please advise
Kaps:thumb:
To the best of my understanding......
In the case explained above, There may be three scenarios.
1. Market is going down continuously --- you will be in profit but profit will be stable as NF gain will get offset against Put loss. you will have call premium in your pocket which is your profit.
2. Market is going up : I am assuming NF short at 5450. If you do not switch your position after 5500 then this trade will move into loss ~5580. & Loss will be increasing continuously.
3. Market is volatile & moving in between 5450 & 5550: If this is happening frequently & you are changing your positions but if your stoploss is hitting frequently then this position will be in profit till you exhaust with all your time value. Assuming 5450as spot price you have time value of 171(221+5450spot price-5500(strike price))
You will have to monitor 5500 level continuously to to ensure your shot exit & long entry is exactly at 5500( or vice versa). In this case loss will be only brokrage from time value. As you will not be monitoring it continuously there is possibility that you may loose some additional points.
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