If you've sold a short strangle and one side premium spikes, you can book the profitable side and roll it up to match the premium of the other side.
HOW TO ADJUST A SHORT STRANGLE?
Gone are those days where a short strangle used to expire worthless without any adjustments.
Adjustments are a must when your initial view goes wrong which it will.
Listing down all the ways to adjust a short strangle WITH EXAMPLES below.
If you've sold a short strangle and one side premium spikes, you can book the profitable side and roll it up to match the premium of the other side.
This is the most basic way of adjustment.
It's very similar to the above adjustment however, we will consider shifting the losing side instead of profitable side.
Hence, I simply book loss in the put and sell a new put worth 50pts which is farther away from the previous put.
It's a great way to adjust a strangle because you're buying an inside hedge which greatly increases the safety incase of a sharp move/gap.
Let's say call premiums spike up/ or I want extra protection on the call side.
This greatly increase the range and reduces losses in the shorter term.
You can play around with strikes and quantities as per the payoff chart.
Pyramiding involves going in with a small quantity at first and then creating new strangles slowly.
If any single side spikes, you create a new strangle with the remaining half of your capital. So now you have a new range.
This ensures you don't go all at once and also saves you from big IV spikes.
You can easily shift short strangles as the market moves. This ensures you always stay with a market.
If banknifty goes to 35500. You will book your previous short strangle and initiate a new short strangle(36500ce and 34500pe).
You can play around with the distance and strikes. This is just an example.
This will include buying an otm option and selling other side(untested side) options in higher qty to make the tested side risk free.
This is a high risk strategy and has to be only done when you are very sure of the move else it can backfire.
And on the opposite side sell 1 more lot call until it covers up the loss on the losing side. In this case I sold 39800ce at 46pt.
So you get a very wide range.
and my instagram : https://t.co/gUnim2hU3u
https://t.co/uNIrqq5aDP
More from Aditya Trivedi
Workshop worth 5 LAKHS absolutely for FREE.
I've posted some amazing stuff about trading which in itself is a workshop.
Posting some of my best threads here.
1: Benefits of Option selling.
Why are most of the successful traders option sellers?
Writing down my reasons for choosing
2: How to use Technical Analysis to form a weekly view as an option
3: How to adjust a short
4: Top Trading books that make you a better
I've posted some amazing stuff about trading which in itself is a workshop.
Posting some of my best threads here.
1: Benefits of Option selling.
Why are most of the successful traders option sellers?
Writing down my reasons for choosing
BENEFITS OF OPTION SELLING
— Aditya Trivedi (@itsAdityaT) May 28, 2022
Most of the successful traders here are option sellers.
Ever wondered why?
Why we have chosen option selling?
How to decide what strategies to use?
THIS IS THE ONLY THREAD YOU'LL EVER NEED!
Find out below
2: How to use Technical Analysis to form a weekly view as an option
HOW TO USE TECHNICAL ANALYSIS TO FORM A WEEKLY VIEW
— Aditya Trivedi (@itsAdityaT) September 24, 2022
A thread\U0001f9f5
Got many DMs about how I form my weekly view in Banknifty and how do I analyze it.
In this thread I'll show you how I do it so that anyone can analyze Banknifty and other instruments the right way.
3: How to adjust a short
HOW TO ADJUST A SHORT STRANGLE?
— Aditya Trivedi (@itsAdityaT) August 13, 2022
Gone are those days where a short strangle used to expire worthless without any adjustments.
Adjustments are a must when your initial view goes wrong which it will.
Listing down all the ways to adjust a short strangle WITH EXAMPLES below. pic.twitter.com/k0iuvvqqQu
4: Top Trading books that make you a better
TOP 10 TRADING BOOKS THAT MAKE YOU A BETTER TRADER
— Aditya Trivedi (@itsAdityaT) July 16, 2022
I've read a number of books on trading and these are top 10 of them which I found the most useful.
More from All
MASTER THREAD on Short Strangles.
Curated the best tweets from the best traders who are exceptional at managing strangles.
• Positional Strangles
• Intraday Strangles
• Position Sizing
• How to do Adjustments
• Plenty of Examples
• When to avoid
• Exit Criteria
How to sell Strangles in weekly expiry as explained by boss himself. @Mitesh_Engr
• When to sell
• How to do Adjustments
• Exit
Beautiful explanation on positional option selling by @Mitesh_Engr
Sir on how to sell low premium strangles yourself without paying anyone. This is a free mini course in
1st Live example of managing a strangle by Mitesh Sir. @Mitesh_Engr
• Sold Strangles 20% cap used
• Added 20% cap more when in profit
• Booked profitable leg and rolled up
• Kept rolling up profitable leg
• Booked loss in calls
• Sold only
2nd example by @Mitesh_Engr Sir on converting a directional trade into strangles. Option Sellers can use this for consistent profit.
• Identified a reversal and sold puts
• Puts decayed a lot
• When achieved 2% profit through puts then sold
Curated the best tweets from the best traders who are exceptional at managing strangles.
• Positional Strangles
• Intraday Strangles
• Position Sizing
• How to do Adjustments
• Plenty of Examples
• When to avoid
• Exit Criteria
How to sell Strangles in weekly expiry as explained by boss himself. @Mitesh_Engr
• When to sell
• How to do Adjustments
• Exit
1. Let's start option selling learning.
— Mitesh Patel (@Mitesh_Engr) February 10, 2019
Strangle selling. ( I am doing mostly in weekly Bank Nifty)
When to sell? When VIX is below 15
Assume spot is at 27500
Sell 27100 PE & 27900 CE
say premium for both 50-50
If bank nifty will move in narrow range u will get profit from both.
Beautiful explanation on positional option selling by @Mitesh_Engr
Sir on how to sell low premium strangles yourself without paying anyone. This is a free mini course in
Few are selling 20-25 Rs positional option selling course.
— Mitesh Patel (@Mitesh_Engr) November 3, 2019
Nothing big deal in that.
For selling weekly option just identify last week low and high.
Now from that low and high keep 1-1.5% distance from strike.
And sell option on both side.
1/n
1st Live example of managing a strangle by Mitesh Sir. @Mitesh_Engr
• Sold Strangles 20% cap used
• Added 20% cap more when in profit
• Booked profitable leg and rolled up
• Kept rolling up profitable leg
• Booked loss in calls
• Sold only
Sold 29200 put and 30500 call
— Mitesh Patel (@Mitesh_Engr) April 12, 2019
Used 20% capital@44 each
2nd example by @Mitesh_Engr Sir on converting a directional trade into strangles. Option Sellers can use this for consistent profit.
• Identified a reversal and sold puts
• Puts decayed a lot
• When achieved 2% profit through puts then sold
Already giving more than 2% return in a week. Now I will prefer to sell 32500 call at 74 to make it strangle in equal ratio.
— Mitesh Patel (@Mitesh_Engr) February 7, 2020
To all. This is free learning for you. How to play option to make consistent return.
Stay tuned and learn it here free of cost. https://t.co/7J7LC86oW0
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1/ Some initial thoughts on personal moats:
Like company moats, your personal moat should be a competitive advantage that is not only durable—it should also compound over time.
Characteristics of a personal moat below:
2/ Like a company moat, you want to build career capital while you sleep.
As Andrew Chen noted:
3/ You don’t want to build a competitive advantage that is fleeting or that will get commoditized
Things that might get commoditized over time (some longer than
4/ Before the arrival of recorded music, what used to be scarce was the actual music itself — required an in-person artist.
After recorded music, the music itself became abundant and what became scarce was curation, distribution, and self space.
5/ Similarly, in careers, what used to be (more) scarce were things like ideas, money, and exclusive relationships.
In the internet economy, what has become scarce are things like specific knowledge, rare & valuable skills, and great reputations.
Like company moats, your personal moat should be a competitive advantage that is not only durable—it should also compound over time.
Characteristics of a personal moat below:
I'm increasingly interested in the idea of "personal moats" in the context of careers.
— Erik Torenberg (@eriktorenberg) November 22, 2018
Moats should be:
- Hard to learn and hard to do (but perhaps easier for you)
- Skills that are rare and valuable
- Legible
- Compounding over time
- Unique to your own talents & interests https://t.co/bB3k1YcH5b
2/ Like a company moat, you want to build career capital while you sleep.
As Andrew Chen noted:
People talk about \u201cpassive income\u201d a lot but not about \u201cpassive social capital\u201d or \u201cpassive networking\u201d or \u201cpassive knowledge gaining\u201d but that\u2019s what you can architect if you have a thing and it grows over time without intensive constant effort to sustain it
— Andrew Chen (@andrewchen) November 22, 2018
3/ You don’t want to build a competitive advantage that is fleeting or that will get commoditized
Things that might get commoditized over time (some longer than
Things that look like moats but likely aren\u2019t or may fade:
— Erik Torenberg (@eriktorenberg) November 22, 2018
- Proprietary networks
- Being something other than one of the best at any tournament style-game
- Many "awards"
- Twitter followers or general reach without "respect"
- Anything that depends on information asymmetry https://t.co/abjxesVIh9
4/ Before the arrival of recorded music, what used to be scarce was the actual music itself — required an in-person artist.
After recorded music, the music itself became abundant and what became scarce was curation, distribution, and self space.
5/ Similarly, in careers, what used to be (more) scarce were things like ideas, money, and exclusive relationships.
In the internet economy, what has become scarce are things like specific knowledge, rare & valuable skills, and great reputations.
This is NONSENSE. The people who take photos with their books on instagram are known to be voracious readers who graciously take time to review books and recommend them to their followers. Part of their medium is to take elaborate, beautiful photos of books. Die mad, Guardian.
THEY DO READ THEM, YOU JUDGY, RACOON-PICKED TRASH BIN
If you come for Bookstagram, i will fight you.
In appreciation, here are some of my favourite bookstagrams of my books: (photos by lit_nerd37, mybookacademy, bookswrotemystory, and scorpio_books)
Beautifully read: why bookselfies are all over Instagram https://t.co/pBQA3JY0xm
— Guardian Books (@GuardianBooks) October 30, 2018
THEY DO READ THEM, YOU JUDGY, RACOON-PICKED TRASH BIN
If you come for Bookstagram, i will fight you.
In appreciation, here are some of my favourite bookstagrams of my books: (photos by lit_nerd37, mybookacademy, bookswrotemystory, and scorpio_books)