Trading for Living -- Successfully Completed one year as Full Time Trader

[SarangSood]

It use to be easy back in 2009. But the volatility became more and more complicated as everyone started doing it. I know people without any market knowledge making money just to bust their account in few months. I also lost my previous 4 month earnings in Aug'15 crash.

I have tried every kind of strategy in these past years (credit spreads, ratios, butterfly, calendar spreads,iron condor etc). I soon realized that there is no magic strategy that can give consistent results but the knowledge of the market volatility itself. If there is volatility bound to come no strategy where you receive credit can save you (except for if your playing direction and you get it right).

Now how to read volatility? I will give you a classical example of Sep'16 (surgical strike). The whole month the delta neutral strangle wasn't giving any profits. With every adjustment i was losing my credit as well as gains. Mind you this is not reflected in VIX. But there was clearly something fishy. I didn't make money that month but didn't gave any as well which is very important to survive because majority of months will give good returns. So we need to understand how volatility rises and is eventually sold off.

Since last one year i have shifted to BNF which has suited my style of shorting strangle very well. The principles remain the same. I increase my position in profits while shifting and cut the loss as it happens. Over past year i have started converting my strangle into condor (where my OTM remains short but i buy ATM against it) which gives decent profit in weeks like these.

Dear sarang bro,
Can you please explain a bit more about the bold part....it means you shift profit making side to new strike ?what about loss making side?

It can be any leg. If i want to move towards ATM than the the leg which has become smaller or far off will be shifted. I usually start from OTMs delta of around .2 and go towards ATM till expiry.

 

[amrutham]

Really surprised by the sudden downward movement. Made below adjustment to the position.

BN spot @ 26990

Sell BN 27000 CE 120 Qty @ 115

Credit = around 14K

Net credit = 3K

Now closed this position.
BN spot @ 26780

Net Profit = 3K

 

[amrutham]

Hello Everyone. Finally back from vacation.

Good to see the thread very much active in my absence.

Entered into below BN position for 19th July expiry.

BN Spot @ 27000

Buy BN 27000 PE 400 Qty @ 173
Sell BN 26900 PE 400 Qty @ 130
Sell BN 26600 PE 400 Qty @ 46

Net credit = around 1K

Now closed this position.

BN Spot @ 26780

BN 27000 PE 400 Qty @ 205
BN 26900 PE 400 Qty @ 105

Credit = 40K
Net profit = 41K

 

[amrutham]

Entered into below BN position for 26th July expiry.

BN Spot @ 26800

Buy BN 26900 CE 400 Qty @ 162
Sell BN 27000 CE 400 Qty @ 120
Sell BN 27300 CE 400 Qty @ 41

Net debit = 400

 

[govindheg]

Now closed this position.

BN Spot @ 26780

BN 27000 PE 400 Qty @ 205
BN 26900 PE 400 Qty @ 105

Credit = 40K
Net profit = 41K

Very good.

 

[govindheg]

@amrutham
Curious to understand your way of position monitoring. When multiple positions are open, how do you keep track of them? Whether the trading platform you use allow all the legs of your deals to be part of the strategy, like butterfly or debit/credit spread etc. so that net result of the position is available?
And also while closing the position your trading platform allows closing all the legs at one go?
Because I am struggling in these areas as I am using NOW mobile app and Specialised features are not there. Entering and exiting each leg separately puts me always in difficulty.

Thanks and regards
Govind

 

[VJAY]

@amrutham
Curious to understand your way of position monitoring. When multiple positions are open, how do you keep track of them? Whether the trading platform you use allow all the legs of your deals to be part of the strategy, like butterfly or debit/credit spread etc. so that net result of the position is available?
And also while closing the position your trading platform allows closing all the legs at one go?
Because I am struggling in these areas as I am using NOW mobile app and Specialised features are not there. Entering and exiting each leg separately puts me always in difficulty.

Thanks and regards
Govind

Dear Govind,
He not using any special terminal!!!!he mostly trade with KITE.IMO he takes one strategy in one account as he having multiple accounts in his and his wifes name ...How he use orders he explained in this thread itself...He enters buying side first ...when exiting he exit short side first....Though amrutham will answer more ... one more thing exits using position window and just square up

 

[sreperu]

Now closed this position.

BN Spot @ 26780

BN 27000 PE 400 Qty @ 205
BN 26900 PE 400 Qty @ 105

Credit = 40K
Net profit = 41K

so 26600 pe became OTM and expired worth less right...

 

[sreperu]

Entered into below BN position for 26th July expiry.

BN Spot @ 26800

Buy BN 26900 CE 400 Qty @ 162
Sell BN 27000 CE 400 Qty @ 120
Sell BN 27300 CE 400 Qty @ 41

Net debit = 400

I have observed while creating a ladder, you usually take the last option leg as far OTM, is there any particular reason for this? Is it because to extend the range? Sorry if someone is already asked this question, I may be repeating...

and one more question.
Please let us know when we need to decide whether we need to go for butterfly or ladder.

 

[amrutham]

@amrutham
Curious to understand your way of position monitoring. When multiple positions are open, how do you keep track of them? Whether the trading platform you use allow all the legs of your deals to be part of the strategy, like butterfly or debit/credit spread etc. so that net result of the position is available?
And also while closing the position your trading platform allows closing all the legs at one go?
Because I am struggling in these areas as I am using NOW mobile app and Specialised features are not there. Entering and exiting each leg separately puts me always in difficulty.

Thanks and regards
Govind

At present I am using Zerodha Nest/Kite and Fyers markets. All the order entry and exit are done manually.

Exiting big positions with multiple legs is difficult with kite.All these exits are done from admin positions window of Nest at market price.
If the trading price is more than 150 -200, then I try to exit step by step using limit orders.

Monitoring is not a big issue, since at any point of time I will not have more than 3-4 positions across two accounts.