Weekly Bank Nifty Options strategy

[VJAY]

Hedging is a myth unless you are trading options.

Again strangle is a different ball game, do not get other strategies mixed up. In short strangle, the risk is unlimited, here I am exclusively stating that credit spreads, call or put only has to be played when trading bank nifty weekly options. In spreads, the risk is LIMITED. So when you say be cautious, means what, cautious about what? If you can elaborate further, since in credit spread, the risk and profit both are limited, the only focus is on getting the direction right on a weekly basis. So effectively if the direction of bank nifty movement is massively right on the very first day after taking credit spread is there than the profit begins immediately, if not then we have time till expiry or 5 days to get the direction in our favour. So anytime from day 1 to day 5 the direction or closing has to be in our favour or flat, in all the scenarios we gain. Only if the direction is opposite, small or massively we lose that limited amount, equalling difference between the strike price and credit of premium received.

Don't go theoriicly....paper trade 1-2 months you can understand whats& when the real practical problems comes...as per your credit spreads your trend bias is important

 

[Square]

Ok, Start na bhai, Paisa Kamo, there is no need to convince anyone else . . .

many will follow you if you start a dairy and log your real or even paper trades . . .

best :thumb:



Happy

Arey Bhai, I am asking feedback on credit spread strategy and people are giving me feedback on other strategies. I simply am asking if anyone has traded credit spread strategy for weekly bank nifty options or for last week expiry trading in Nifty, with intension of holding it till expiry, i.e. little or no monitoring.

 

[Square]

Don't go theoriicly....paper trade 1-2 months you can understand whats& when the real practical problems comes...as per your credit spreads your trend bias is important

Yes exactly, the trend bias is the key, i.e. taking this strategy on two charts, one on daily time frame candles and two, on weekly candles, the week will comprise for period from Friday to Thursday. So when observing weekly candles, the objective will be which side the next candle will not close. So if bullish, the next weekly candle should not close down and if bearish, the next weekly candle should not close up. Then whatever the size of the candle in our favour, we profit the credit premium received.

The daily frame candles shall be used to understand the trend bias and target should be which side will be the fifth (Thursday - expiry day) candle from today i.e. Friday.

 

[Square]

I got good amount of information and learning was gained from somatung on options trading. He sounded like an options pro. Just today I realised that he is no more, any reason?

 

[travi]

TRADING IN OPTIONS - MY CHANGE IN UNDERSTANDING COMPARED TO JUL-13.

One obvious thing which I may be overstated and overemphasized was the Credit Spreads. I was always for Credit Spreads because it worked very well in JUL-13 and which gave good Results in JUL-13, when the VOLT was FLAT and market was Going UP.

Credit Spreads do not work always. Basically one should not overlook the VOLT and its influence on Options. High VOLT will affect the Credit Spreads very badly.

So at the end of the Day we have to be find out whether to go for Debit Spreads or Credit Spreads. One might be confused whether to go for Debit Spread or Credit spread because it is not something to do with the Direction of the market but a function of VOLT.

So those who are Trading with Options, you should first have view of where the VIX or VOLT is heading and correspondingly Take the Credit or Debit Spreads.

Hope you have checked out HealthRaj's thread. He did some extensive work.

 

[pannet1]

Arey Bhai, I am asking feedback on credit spread strategy and people are giving me feedback on other strategies. I simply am asking if anyone has traded credit spread strategy for weekly bank nifty options or for last week expiry trading in Nifty, with intention of holding it till expiry, i.e. little or no monitoring.

Right now I am trading something like this. It is very profitable. But I warn you not to follow this blindly.

1) the more bigger the spread the more riskier it is. It is not emotionally possible to stomach such drawdown.

2) When you are trading credit spreads, look at Out of the money options.

3) Prepare to roll the options up and down.

4) You need not monitor always but you can enter the Limit / SL order and wait for the price to breach.

Good luck.

PS: Think of bringing monthly option on the Buy side and bring another (3rd option to the winning side for intraday).