What are the criterias to choose any kind of option strategy?

[adityasaraf007]

Nifty - August Contract - Weekend Update:

At the onset, I am very-very happy to have followed this particular strategy till now.... We have had 11 trading sessions from the date of implementation of this particular strategy... and have lost money on 10 sessions out of 11...... So, in effect, we just erred in Direction in which it was implemented.... Otherwise, everything went as per script... and now, we stand very close to 90% of max. loss risk (which would have been 90% of max. profit potential had we got the direction correct).....

As I have said earlier, experience would help us hone our skills in reading the OI data correctly.... I am damn happy about it..

Snapshot for reference (OptionsOracle hasn't been fixed till now):

 

[DanPickUp]

@bpr

Calendar Spreads are a nice strategy to trade. There are various ways to do so and if market gives the opportunity to trade them, yes they are worth to trade.

As you mentioned in your market: Liquidity is not best in far month options. Very different compare to the CME, as far month options in many markets are absolutely no problem.

Here a school example of a double calendar spread which is traded in a bearish market: http://i45.tinypic.com/112dj85.png As you see, the Probability of Profit (P.P on the down left side) is 49% as that calendar is done at once.

Here a calendar back spread live traded from us back in 2007 in the EC future: http://i50.tinypic.com/13zzfh3.png As you see, the PP has improved to 98% because of leg in and trading exactly the expected range for the short time options.

Here some more examples of Calendars and how they can be seen on the matrix:http://i47.tinypic.com/v6j528.png http://i46.tinypic.com/169hnw0.png

All graphs you see are projected till the end of the current month. You are right with that.

Sad to hear that OO has stopped working for all NSE symbols. What are you doing now? How do you picture your option strategy trades?

Good trading

DanPickUp

 

[bpr]

@bpr

Calendar Spreads are a nice strategy to trade. There are various ways to do so and if market gives the opportunity to trade them, yes they are worth to trade.
K got it. Worth putting some more effort/time spotting good opportunity.
As you mentioned in your market: Liquidity is not best in far month options. Very different compare to the CME, as far month options in many markets are absolutely no problem.
Yeah text book definition says it is supposed to between current and far month but for us we have to manage between current and next month.
I will try to see may be in next 2 months to spot these trades but if this wide spread are constant issue then I will ditch these strategies altogether and move on to something else.
Here a school example of a double calendar spread which is traded in a bearish market: http://i45.tinypic.com/112dj85.png As you see, the Probability of Profit (P.P on the down left side) is 49% as that calendar is done at once.

Here a calendar back spread live traded from us back in 2007 in the EC future: http://i50.tinypic.com/13zzfh3.png As you see, the PP has improved to 98% because of leg in and trading exactly the expected range for the short time options.

Here some more examples of Calendars and how they can be seen on the matrix:http://i47.tinypic.com/v6j528.png http://i46.tinypic.com/169hnw0.png
Looks good Currently I am looking into very simple Horizontal calendar Put spread or Horizontal calendar Call spread and my idea is to wait for the instrument to rally in the first two weeks of the expiry and then enter into the calendar spread and in case the instrument is very narrow bound in the first two weeks and we can go for the reverse position such as Short Calendar Straddle. Don't know whether it will work out??
All graphs you see are projected till the end of the current month. You are right with that.
Ok so we should square off the far/next month leg at the end of the current month to complete the trade


Sad to hear that OO has stopped working for all NSE symbols. What are you doing now? How do you picture your option strategy trades?

I found one excel free utility. http://www.oedge.com/download.php but that is boring.
Btw to answer your earlier query in OO we cannot do back testing or forward testing but still it is very helpful tool for free
IN OV you get to see the entire movie and in OO we only see the first scene and last scene.:rofl:


Good trading

DanPickUp

Hi DanPickup

Thanks for the reply.Please see my replies inline.
btw I didn't see this thread of yours earlier.
I will post my queries here too now.

Bpr