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..

Locking in profit is and important aspect of trading. profitable trade turning into loser can have very negative impact on your psychology. few tricks how i do it.
1. If I have naked call/ put buy - i will convert into Spread by selling otm CE/PE
2. for bull call spread -
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book existing bull call spread and execute another bull call spread with lower debit
3. If we are in last 2 weeks of Expiry - can convert bull call spread in to ratio or butterfly.
4. If we have naked CE/PE sell - hedge it with otm CE/PE [credit spread]

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5. if we have PE credit spread - can add ce credit spread [convert to Iron condor]
this list is just 2% of what we can do with options. understand the logic of each strategy and transition from one strategy to another.
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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?

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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,
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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.

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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

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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

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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.

@yogeeswarpal

#Knowledge
#Options
Ever wondered y gamma is the enemy of straddle / strangle sellers and what it means?

Presume readers are aware of option Greeks meaning...

To understand , first ...

Relationship between delta, gamma, theta and option premium.
....

....

Theta + (int Rate x Underlying price x Delta) + ( 0.5 x variance of underlying x Underlying price x Underlying Price x Gamma ) = Int rate x Option premium.

Strangle and straddles are delta neutral setup;For a delta neutral setup, the second term becomes zero; Hence,
...

....

Theta +
(0.5 x variance of UL x UL price x Underlying price x Gamma)
= Int rate x option premium

Straddle and strangles have typically zero delta at initiation; they also have positive theta, meaning they gain over time assuming other components of option r constant ..

...
In a delta neutral portfolio, if theta is largely +ve , Gamma will be -ve by a large extent to satisfy the above relation mathematically, which means that as expiry nears the strangles and straddles will have large -ve gamma; This is wat u see traders telling gamma effect.

https://t.co/a04hGBm8YK

Trading make easy and make money 💰

🧵*Weekly Bank Nifty Analysis for 7th Oct Expiry* 🧵

To form a view, let's have a look at both:
1. Technicals
2. Data

Also, 3 strategies to deploy for:
1. Aggressive Traders
2. Moderate Risk Traders
3. Low-Risk Traders

1. Technicals

Let's start with technicals. We'll look at -
1. Daily charts.
2. Hourly / 60 min charts.
3. 15 min charts.

Formed an indecisive candle on the daily timeframe right at support. Unless we sustain below 36900 for 15 mins, the probability of a bounce is high.

2. 15 min charts.

Above Friday's High on 15 min charts, if we sustain that level for 15 mins can sell strangles.

If we gap down on Monday, only selling calls would be a good idea as the probability of the market going below 36900 would increase.

3. Hourly / 60 min charts.

On hourly charts, wait for a 1 hour close above 37900 levels to again look for Future buy opportunities.

The structure of Lower high and lower low will change to a higher high here.

Option chain data.

Shows a stiff resistance at 38000 levels. There was an addition in put writing at 37000 levels, expecting them to run for cover if 36900 breaks.

Positions haven't been built a lot so best is to wait for a day or two.