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.
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THE MEANING, SIGNIFICANCE AND HISTORY OF SWASTIK
The Swastik is a geometrical figure and an ancient religious icon. Swastik has been Sanatan Dharma’s symbol of auspiciousness – mangalya since time immemorial.
The name swastika comes from Sanskrit (Devanagari: स्वस्तिक, pronounced: swastik) &denotes “conducive to wellbeing or auspicious”.
The word Swastik has a definite etymological origin in Sanskrit. It is derived from the roots su – meaning “well or auspicious” & as meaning “being”.
"सु अस्ति येन तत स्वस्तिकं"
Swastik is de symbol through which everything auspicios occurs
Scholars believe word’s origin in Vedas,known as Swasti mantra;
"🕉स्वस्ति ना इन्द्रो वृधश्रवाहा
स्वस्ति ना पूषा विश्ववेदाहा
स्वस्तिनास्तरक्ष्यो अरिश्तनेमिही
स्वस्तिनो बृहस्पतिर्दधातु"
It translates to," O famed Indra, redeem us. O Pusha, the beholder of all knowledge, redeem us. Redeem us O Garudji, of limitless speed and O Bruhaspati, redeem us".
SWASTIK’s COSMIC ORIGIN
The Swastika represents the living creation in the whole Cosmos.
Hindu astronomers divide the ecliptic circle of cosmos in 27 divisions called https://t.co/sLeuV1R2eQ this manner a cross forms in 4 directions in the celestial sky. At centre of this cross is Dhruva(Polestar). In a line from Dhruva, the stars known as Saptarishi can be observed.
The Swastik is a geometrical figure and an ancient religious icon. Swastik has been Sanatan Dharma’s symbol of auspiciousness – mangalya since time immemorial.
The name swastika comes from Sanskrit (Devanagari: स्वस्तिक, pronounced: swastik) &denotes “conducive to wellbeing or auspicious”.
The word Swastik has a definite etymological origin in Sanskrit. It is derived from the roots su – meaning “well or auspicious” & as meaning “being”.
"सु अस्ति येन तत स्वस्तिकं"
Swastik is de symbol through which everything auspicios occurs
Scholars believe word’s origin in Vedas,known as Swasti mantra;
"🕉स्वस्ति ना इन्द्रो वृधश्रवाहा
स्वस्ति ना पूषा विश्ववेदाहा
स्वस्तिनास्तरक्ष्यो अरिश्तनेमिही
स्वस्तिनो बृहस्पतिर्दधातु"
It translates to," O famed Indra, redeem us. O Pusha, the beholder of all knowledge, redeem us. Redeem us O Garudji, of limitless speed and O Bruhaspati, redeem us".
SWASTIK’s COSMIC ORIGIN
The Swastika represents the living creation in the whole Cosmos.
Hindu astronomers divide the ecliptic circle of cosmos in 27 divisions called https://t.co/sLeuV1R2eQ this manner a cross forms in 4 directions in the celestial sky. At centre of this cross is Dhruva(Polestar). In a line from Dhruva, the stars known as Saptarishi can be observed.
