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

[amrutham]

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

Yeah. It expired worthless.

 

[amrutham]

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.

In these types of positions, the last leg is where I expect max range for the market.

For this week, I am expecting 27300 as the upper limit. Hence taken this position. If BN is in danger of going above this, then this position has to be adjusted.

As per my experience, ratio spreads/ ladder positions are profitable if initiated at the start of the week. In this way you can go as far OTM as posibble.
Butterflys are good if initiated in the last 3 days.This is because you can get some rough idea about the range in the last 2-3 days.

 

[mycall]

In these types of positions, the last leg is where I expect max range for the market.

For this week, I am expecting 27300 as the upper limit. Hence taken this position. If BN is in danger of going above this, then this position has to be adjusted.

As per my experience, ratio spreads/ ladder positions are profitable if initiated at the start of the week. In this way you can go as far OTM as posibble.
Butterflys are good if initiated in the last 3 days.This is because you can get some rough idea about the range in the last 2-3 days.

To me... for trading options we must have some knowledge about the market... at least should know what can be the max range or strongest S/R level of the current price... most of the option strategies are combinations of spreads... which needs such knowledge to be successful...

Ratio Spreads works best if the shorts are at or near subsequent S/R levels... bigger the gap the better... this is a tricky strategy because Delta and Vega both works against this position... I would go with a preventive buy for overnight position if BNF is breathing over my neck

Butterflies... to me... is much better proposition as far as delta and vega is concerned... again the short strikes should be at or beyond major S/R levels...

As per my observation... BNF always expires at one of its S/R levels...

Need your expert comments on my views...

 

[sreperu]

Hi mycall and Amrutham,

I used to do call and put ratio spread at least 300 points away from the current future price still I need to try some more time to get the confidence. Please put views if my understanding is wrong.


Suppose the current future price is 26800 then the positions are below:

short 2 lots 26100 pe
short 2 lots 26300 pe
long 1 lot 26500 pe

-------------------------------
future price 26800
-------------------------------

long 1 lot 27100 ce
short 2 lots 27300 ce
short 2 lots 27500 ce

I will make some adjustments if it gaps up more than 300+ pts in a day on either side.

My range will become: 26057 to 27544

 

[mycall]

Hi mycall and Amrutham,

I used to do call and put ratio spread at least 300 points away from the current future price still I need to try some more time to get the confidence. Please put views if my understanding is wrong.


Suppose the current future price is 26800 then the positions are below:

short 2 lots 26100 pe
short 2 lots 26300 pe
long 1 lot 26500 pe

-------------------------------
future price 26800
-------------------------------

long 1 lot 27100 ce
short 2 lots 27300 ce
short 2 lots 27500 ce

I will make some adjustments if it gaps up more than 300+ pts in a day on either side.

My range will become: 26057 to 27544
View attachment 26762

1:4 spread...

You must be a full time trader... and also must have solid adjustment policy and most importantly a stone cold heart... then you should be able to pull off good return...

Because BNF rarely closes beyond 300-400pts weekly...

but... bad luck or say one management failure for any reason can do some serious damage

You shorts are 500 and 700pts apart from... which is about 2-3% move of BNF... quite frequent nowadays...

delta wise with flat calculation

position has .3 in favor and .3 (.2+.1) against... this will turn scary the moment BNF moves 2%... one of the positions will become .5:.8 (.6+.2)... and the music will start

Basically everything depends upon what BNF dose... on 4th June it move 700+ in one day... and closed 540+... next day it closed 549... next day it closed 440+... this position will look scary in such situations...

But with a stone cold heart and higher risk appetite... one can do wonders in this market... Not my cup of tea though

To me... I believe that just holding short 2 lots 26100 pe and short 2 lots 27500 ce and do the adjustments if needed... will give less scare and equal or greater return... this is my own opinion

 

[mycall]

VIX is increasing friends...

Option writers love these situations... hit the metal when it is hot... mishit or inadequate force can also prove fatal...

My sincere advice to the starters (option traders) would be to stay out of the market for now... or properly hedge positions...

 

[govindheg]

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.

Thank you Amrutham. Have a good day.

 

[superman]

I wonder what you do for entire day ? Will you monitor positions each minute and adjust ,, you have multiple charts open and react to each move. I had lost good chunk of money due to my over reaction and reacting to charts movement. Would love to hear opinion from full time traders like your on your day to day schedule and what you do during market hours

 

[columbus]

Hi mycall and Amrutham,

I used to do call and put ratio spread at least 300 points away from the current future price still I need to try some more time to get the confidence. Please put views if my understanding is wrong.


Suppose the current future price is 26800 then the positions are below:

short 2 lots 26100 pe
short 2 lots 26300 pe
long 1 lot 26500 pe

-------------------------------
future price 26800
-------------------------------

long 1 lot 27100 ce
short 2 lots 27300 ce
short 2 lots 27500 ce

I will make some adjustments if it gaps up more than 300+ pts in a day on either side.

My range will become: 26057 to 27544
View attachment 26762

The range appears to BIG.

 

[amrutham]

Has anybody used cleartax tax filing plan(priced at 6.5K) for derivative traders where tax audit is required?

https://cleartax.in/services/f-and-o-traders-e-filing-/p

If yes, could you please provide feedback on this plan?