Today trade

We don't have to be smarter than
the rest. We have to be more disciplined than the rest. - Warren Buffett.

SIMPLE & FREE LEARNING FOR U ALL FRIENDS

Here is the detailed information of about strategy,

Entry time : 9.30 - 10
Exit : Upto you

Strategy :
Sell weekly ATM CE & PE at almost equal price
For ex : Sell Nifty 17250 CE at 50 and Nifty 17250 PE at 48 so it will become short straddle

Buy monthly ATM or near ATM CE & PE at matching price (5-10 points diff should be fine) as hedge
For ex : Buy Nifty 17250 CE at 150 and Nifty 17300 PE at 155 so it will become long straddle.

Weekly Short straddle + Monthly Long straddle

Adjustment:

• If you feel slightly bullish/bearish then no adjustment needed
• If Nifty moves 50 up or down and sustain then just simply roll up or down half of qnty and keep rest of the quantity. If market goes up or down further then roll up or down rest.

• If Nifty moves one side or about to breach BEP then add equal amount of lot. This can balance tested side. For ex: If I bought 17300 CE 4 lot as hedge then add 4 lot so you will have only one side risk . Note: Remember to keep SL at cost price (only for additional lot bought)

Capital requirement:
2.2 L for 4 lot
Adjustment requires additional capital upto 1L

Note : High risk high reward strategy, please don’t execute until you fully understand. Kindly do paper trading or backtest.
RR : 1:1
POP : 45-55%

All important Options Selling Strategies..
A thread🧵:

Simple Directional Call Sell

View: Neutral to bearish
Limited Profit, unlimited risk.
High Probability of profit.
High Margin required.

Simple Directional Put Sell

View: Neutral to Bullish
Limited Profit, unlimited risk.
High Probability of profit.
High Margin required.

Call Credit Spread

View: Neutral to bearish
Limited Profit, Limited risk.
High Probability of profit.
Low Margin required.

Put Credit Spread

View: Neutral to Bullish
Limited Profit, Limited risk.
High Probability of profit.
Low Margin required.

NIFTY TRADE

#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.

Most of the traders on Twitter are non-directional traders.

Only a few trade on one side according to direction.

Here are 9 benefits of directional trading you cannot miss:🧵

Collaborated with @niki_poojary

1/ Higher Returns

Playing as per the trend usually gets you more conviction in your trades.

Which then leads to higher returns as you trade with the increased confidence.

Rather than selling 30-30 on each side, for eg, can just sell 90-100 on one side and make more.

2/ Easy management

It is easier to manage directional trades according to stop loss or targets based on patterns.

Don't need additional factors to think of for eg, premiums, distance from the spot, greeks, etc.

3. Avoid adjustments constantly

Non-directional option sellers have to constantly do adjustments to their trades.

Many times their original view is right but then the adjustments go wrong.

To combat these adjustments, they make more adjustments that unnecessarily use margins.

4. Improves price action analysis

You cannot be a good directional trader without having a very good grip on price action analysis.

Constantly using the price to make trades rather than playing for theta leads you to better understand price action.