After my face2face received many request on making video on Data Analysis in Excel.
Tanking first step in that direction made a small video on how to do data Analysis in excel.
what you will learn?
1. Thought process,
2. How to get EOD data
3.

Story of this week:
Gap pe gap.. gap pe gap.. milta hai.
lekin entry nahi milti

Most risky position of option selling is ovenight straddle/strangle as we carry risk of black swan event.
Lets try to find the solution can we mitigate or reduce this risk?

[1/n]

Will try to explain with 24th Feb 22 gap down [3.2%] how the strategy wise impact looks like. assumed cap 25L

1⃣ say we deploy full capital i.e. for 1.6L 1 lot we trade. attached pic shows impact on various strategies. in straddle we lost highest 8.5% of cap,
[2/n]

in strangle lost in range of 2.4 - 2% .
in iron-fly loss of 2% &
iron condor [with 200 points hedge] 0.5%

Now, these numbers can be on much higher side if gap is bigger or say circuit. This assumes we exit at open - if we stay till close numbers are worst.

[3/n]

2⃣ now lets reduce position size take 1 lot per 2 Lac or 2.5 La... bot files attached

by doing this we reduce impact of naked position below 6% for straddle & below 1.5% for strangles
same time, ironfly & iron condor impact down to 1.15% & 0.3% respectively

[4/n]

3⃣ now lets see impact if we trade 1 lot every 5 lacs.
impact of strangles and iron condors is with in limit on overall capital [< 0.75%]

idea is to chose your battle wisely.

to sum-up:
1⃣ Prefer hedged strategies [ironfly/IC (with closer hedges)] as compared to naked

[5/n]

Rule based Option selling video now uploaded on our youtube

for positional straddle - i prefer monthly expiry [because of higher premium and comfortable to manage monthly options]
for positional strangle/IC - i prefer weekly expiry [as it is easy to get 15 points every week then getting 60 points in whole month]
views are welcome..

10 mistakes in my 14 years of trading as an option seller 🧵

1. Staying neutral all the time. Majority of the years i have been a neutral option seller. I now realise that having a little sense of direction would have given me an added advantage with better utilisation of capital & also leverage (till the time it was available).

2. Too much importance on adjustments. Initially like most of the new option sellers, i had this notion that i can perfect my adjustment skills for any market conditions. Ofcourse i was wrong. Market is supreme & we need to respect it at times.

3. Not giving importance to greeks. For initial 6 years i didn't even know the existence of greeks. Since i started using them, option selling has become rather less complicated on the contrary of what most people believe.

4. Having too much confidence on the certainty of theta decay. Enough is said about it already. Theta decay is not an edge.

If you trade in nifty then keep watching Reliance and IT index closely.. if you do BNF then hdfc bank, ICICI, SBI, Kotak