Trading options near expiry

[onlinegtrash]

If you can trade 300 lots, stay cool and do not shoot around like a stupid or no risk knower. You ask for any tricks. Fine. Since how long do you trade the amount of 300 lots in Nifty and how many trades did you make the way you explained?

No am not asking for tricks.

There are no tricks, only proper risk management.

But am curious if there is any interesting risk management steps:

for instance scaling in only at advantageous price and liquidating if the trade is not working is a good risk management strategy.

I have been in trading for past 3 years and am still learner.
I get the theoretical stuffs but often stumble with discipline...
I am still struggling to have a neat smooth equity curve...

Initially I blew up few times... but recently I have stopped blowing up but my equity curve shows a very distinct pattern of over confidence and dumbness clustered around expiry

Before this blunder my account punched up 45% from initial capital in a month, I thought lets do it and make it grow a biiiiiiiiiiiiiiiit more... market punched my face back ... pretty much as expected ! If you are observant... you should have noticed 45% per month type of trading has lot of HIDDEN risk or its just pure luck... I wanted to move out of such high risk high yield fully levered options buying intraday trading strategies...


am working on it !
Meanwhile wanted to listen to other interesting people and their thoughts on topic.
(Yes, I know there is no cheap trick, no gimmick and no free lunch )

 

[Somatung]

and the gud things, no headache of SL and limited risk

That's a bit sarcastic, isn't it?

 

[Somatung]

As I see Sir Comm4300 here in the thread and he is working in a broker house, he may will post some more about this case?

What would you Sir say about the MM of this case posted here?

 

[anuragmunjal]

[QUOTE=onlinegtrash;952639]yeah... talking about last month...

I bought 1500 NIFTY14MAR6600CE @ 48.35 in morning on march 26, 2014...
market went sideways for entire damn day... and it was trading around 40-48
and suddenly after 2:00 PM ... pay back time started... option price dropped to 19...

that was quick and sharp loss... easily I could have avoided it with caution...
May be I will try scaling in... next time... or some other trick... but won't leverage this much![/QUOTE]

30 lots... I suppose, why is everybody discussing 300 lots

 

[Somatung]

[QUOTE=onlinegtrash;952639]yeah... talking about last month...

I bought 1500 NIFTY14MAR6600CE @ 48.35 in morning on march 26, 2014...
market went sideways for entire damn day... and it was trading around 40-48
and suddenly after 2:00 PM ... pay back time started... option price dropped to 19...

that was quick and sharp loss... easily I could have avoided it with caution...
May be I will try scaling in... next time... or some other trick... but won't leverage this much![/QUOTE]

30 lots... I suppose, why is everybody discussing 300 lots

Typo mistake. (30 x 50 = 1500) but 300 sounds cooler

 

[TradeJoker]

That's a bit sarcastic, isn't it?

no, actually i was quoting first post, even if u play the entire month, SL may hit freqently and end up in loss, so if u only play the expiry date with options u may get better result with that calculated risk, just a thought

 

[anuragmunjal]

Typo mistake. (30 x 50 = 1500) but 300 sounds cooler

Ha ha... sure does catch attention!!!

 

[onlinegtrash]

30 lots... I suppose, why is everybody discussing 300 lots

you just spotted an invisible gorilla
Incidentally I was listening to this interesting book "The Invisible Gorilla: And Other Ways Our Intuitions Deceive Us"... every one is seeing what they are focusing on and you spotted the error! There is a famous video related with title "The invisible gorilla"... check out in youtube if you haven't done yet!

okay back to the topic: so far my conclusion is ironic...

Although expiry days give the greatest leveraged opportunity of the month ever,
one should drastically cut down their normal leverage and trade light on expiry !
The reason is simple if you are on the wrong side of the trade, leverage injures you badly and completely screws your equity curve!

It seems market is mocking at traders like a hot girl teasing guys "you can see but can't touch"...
market's version would be: "yes you can make 300% if you want but dare not to leverage and try... you can cut down your leverage and try but you can't touch the full profits, if you want to stay alive!"...

 

[comm4300]

As I see Sir Comm4300 here in the thread and he is working in a broker house, he may will post some more about this case?

What would you Sir say about the MM of this case posted here?

@Somatung : "sir" :lol:

thanks anyways. I no longer work in a broker house. i work in an ITES company which is into investment banking.

the reason i was intrigued with this thread is because, i had read a book named "trading options expiry" a while back and the ideas presented therein were worth a look.

and secondly, i heard from one of broker friends that there are traders who trade just on the expiry day and make money for the entire month!

i sure wish i could do that too...

I'd rather be involved in straddle, strangle than go naked. esp on the day of expiry.

let's see what other experts have to say on this...:thumb:

 

[comm4300]

Although expiry days give the greatest leveraged opportunity of the month ever,
one should drastically cut down their normal leverage and trade light on expiry !
The reason is simple if you are on the wrong side of the trade, leverage injures you badly and completely screws your equity curve!

It seems market is mocking at traders like a hot girl teasing guys "you can see but can't touch"...
market's version would be: "yes you can make 300% if you want but dare not to leverage and try... you can cut down your leverage and try but you can't touch the full profits, if you want to stay alive!"...

if you can please post an example of a trade you took or thought of taking we could look at it from risk management angle.

thanks.