Trading with PT style

[enygma]

It might move for some days since it is covered today in ET as a "value pick" ...

Regards,
Enygma.

ohhhh.

forgot to mention. your BVCL is poised for a upmove.:thumb:

Even though I don't have a right to be wrong,( I can be wrong with my money but not with others' money)

market may prove me wrong.

 

[niteshvsingh]

My stradle now bot back 4700PEs at 115/- (sold at 130 on Friday).
So 15 rs less cost now = 270-15+4=269/-!!!

How do you make money in straddle.... as when call increases the put decreases and vice versa ?

 

[MurAtt]

How do you make money in straddle.... as when call increases the put decreases and vice versa ?

After the trend is confirmed - for eg say Nifty starts increasing and crosses 4800 then the calls will increase more than the puts will decrease.
Same for the inverse ....

 

[niteshvsingh]

After the trend is confirmed - for eg say Nifty starts increasing and crosses 4800 then the calls will increase more than the puts will decrease.
Same for the inverse ....

So is it always safe to trade in straddle ?

 

[chachi]

So is it always safe to trade in straddle ?

No not always safe. I will put my points here.

Suppose Nifty is at 4700 and CE4700 is at 130 & PE4700 is at 130.

If the nifty is too bullish for the month and likely to close higher than 4830 you will be at profit. Similarly you will be at profit if the nifty closes below 4570.

i.e 4830 on the upper side and 4570 on the lower side are break even points.

If nifty closes between 4570 to 4830 and you are holding the straddle till end, you will be at loss. Extent of loss will be lesser if nifty closes near to above mentioned points (i.e away from 4700).

Murtaza bhai, kindly endorse it .

Regards
Chachi

Holding my straddle (4700) at 221

 

[niteshvsingh]

No not always safe. I will put my points here.

Suppose Nifty is at 4700 and CE4700 is at 130 & PE4700 is at 130.

If the nifty is too bullish for the month and likely to close higher than 4830 you will be at profit. Similarly you will be at profit if the nifty closes below 4570.

i.e 4830 on the upper side and 4570 on the lower side are break even points.

If nifty closes between 4570 to 4830 and you are holding the straddle till end, you will be at loss. Extent of loss will be lesser if nifty closes near to above mentioned points (i.e away from 4700).

Murtaza bhai, kindly endorse it .

Regards
Chachi

Holding my straddle (4700) at 221

Thanks for the explanation.....
i am holding only 4800 call at 87... now trading at 97... what shuld i do ?

 

[MurAtt]

Not exactly,

The call will come into profit above 4830 and the put below 4570 BUT what about the cost of the other leg i.e. the loosing leg, add another 130 pts there.

Here straddles are bought when the moves are supposed to be ferocious and HUGE so that they take out the cost ...

4740-80 region is one such region. Say it breaks 4780 on the upside, then 4800-4900 would be like knife through butter, same it it break 4650 on the downside or rather if it is unable to cross 4750-80 then the downmove will be ferocious !!!

No not always safe. I will put my points here.

Suppose Nifty is at 4700 and CE4700 is at 130 & PE4700 is at 130.

If the nifty is too bullish for the month and likely to close higher than 4830 you will be at profit. Similarly you will be at profit if the nifty closes below 4570.

i.e 4830 on the upper side and 4570 on the lower side are break even points.

If nifty closes between 4570 to 4830 and you are holding the straddle till end, you will be at loss. Extent of loss will be lesser if nifty closes near to above mentioned points (i.e away from 4700).

Murtaza bhai, kindly endorse it .

Regards
Chachi

Holding my straddle (4700) at 221

 

[chachi]

Thanks for the explanation.....
i am holding only 4800 call at 87... now trading at 97... what shuld i do ?

IMHO, since you are holding only a call 4700, operate with a strict 10 % SL. for every raise of 5 points adjust your SL.

At the end of the day, If the SL is not hit, you have two options.....

1. Sell your call at whatever rate you get and take home the profit.

2. Buy 4700 PE to safeguard the profit what ever you have to carry for next day.

Put your thought for whatever you do.

May be Murtaza bhai may guide you better.

Happy trading

 

[chachi]

Not exactly,

The call will come into profit above 4830 and the put below 4570 BUT what about the cost of the other leg i.e. the loosing leg, add another 130 pts there.

Here straddles are bought when the moves are supposed to be ferocious and HUGE so that they take out the cost ...

4740-80 region is one such region. Say it breaks 4780 on the upside, then 4800-4900 would be like knife through butter, same it it break 4650 on the downside or rather if it is unable to cross 4750-80 then the downmove will be ferocious !!!

Murtaza bhai,

At the end of the month, Call will be at profit above 4830 and the loosing leg i.e. PE4700 will be at 0. In that case why do you consider the loosing leg here?

I agree that straddles will work very well when the market may move either side of the straddle in a big way. And will not work when the market moves in side way range at straddle point.

 

[prasadam]

But, I am not working for ET, so there is no chance of my knowing their covering it in their paper today. I was using just what was taught by SG.( BB, SMA & stoc) :thumb:

It might move for some days since it is covered today in ET as a "value pick" ...

Regards,
Enygma.