Why we sold only CE's today ?

A small 🧵

Collaborated with @AdityaTodmal

Subasish Pani revealed the most simple, yet successful strategy: 5EMA set up!

Here is a thread of 23 video clips on the 5EMA set-up that will save you hundreds of hours and available to you for no cost!

5EMA set-up: 🧵!

Collaborated with @AdityaTodmal

1/Don't hate on any style:

• Admire the fact that money can be made from intraday, scalping, positional, option buying, selling, futures, etc

• Try to understand which one fits you the most and apply that, then ignore the rest!

2/ System with a R/R of minimum 1:3:

• Here is a system that works for investing, scaping, positional, options buying and selling, futures etc.

• The R/R of this set up in intraday is 1:3 & for investing can go beyond.

3/ Why EMA over SMA? :

• Exponential moving average is used, as it places a greater weight and significance on the most recent data points.

4/ 5EMA moves very close to the prices:

• Mean reversion theory: Asset prices usually tend to go back to normal or average levels after an extreme price move.

• Prices routinely oscillate around the mean but tend to return to that same average price over and over.

𝐁𝐚𝐬𝐢𝐜𝐬 𝐨𝐟 𝐃𝐞𝐫𝐢𝐯𝐚𝐭𝐢𝐯𝐞𝐬 - 𝐏𝐚𝐫𝐭 𝐈𝐈𝐈

Topics covered:

• Moneyness of an Option

• Intrinsic value & Time value of an option

• Why Intrinsic value & time value matters

• Implied Volatility

Time for a 🧵

Curated in collaboration with
@AdityaTodmal

• Moneyness of Option contract:
• ITM option
• ATM option
• OTM option

• Intrinsic Value of an option:
• Positive payoff for the buyer

• Intrinsic value of ITM CE options = Spot- Strike

• Intrinsic value of an:
i) ITM for a CE option: Positive
ii) ATM for a CE option: Zero
• Intrinsic value is never Negative

Sep 1, 2021, fresh month starts with a challenge i.e. introduction of Peak Margin rules by SEBI

Time for a 🧵

Lets demystify the Peak Margin rules and try to find solutions for the option sellers!

Peak Margin by SEBI:
• 100% upfront margin for intraday trades in the derivative segment
• Effectively MIS orders = NRML orders, as both will attract same margin in the derivative segment
• Minimum margin for equity intraday trades will be 20% of trade value i.e. 5X leverage

How things used to operate erstwhile?
• Until last year there were no standardization of leverage
• Brokerage firms used to offer their clients intraday leverage of 5x, 10, 15x, 20x etc. as margin reporting was done on EoD basis

• Brokerage firms were allowing customers to take intraday positions with margins far lesser than required via products like MIS, BO, CO, etc. as the positions used to get squared off before the trading hours

• Eg: If 1 lot of Nifty futures require (SPAN + exposure of) Rs. 1.1L, brokerage houses would allow to trade with just 20-30% of this amount i.e Rs. 33k

Do you wish to get in the stocks right before they explode, without spending hours to scan them manually?

With hacks to find the stocks before they have explosive moves:🧵

Collaborated with @AdityaTodmal

1/ Market moves in waves:

• A stock/index / underlying usually follows two phases; viz. Contraction & Expansion in a cyclical manner.

2/ Logic to find explosive stocks:

• After a quite/contraction phase the expansion phase follows, this is where most of the money is made for a trend follower.

• Like a lion which patiently waits to for its prey to make less movement before making a kill.

• A trader too has to wait for the sideways /consolidation period to end before striking the hammer for the explosive move.

• Wait patiently for market to make a narrow range such that movement should be almost dead or within a very small range.

• A volatility contraction is often followed by a volatility expansion.

• After a range formation the range will be broken either oon upside which is called as Breakout (BO) or would be broken on the downside which is called as Breakdown (BD).

Do you want to know how to create a Trading Plan using only Price Action?

Here's a breakdown of 11 simple yet powerful steps to create one: 🧵

Collaborated with @AdityaTodmal

1/ Know your type:

First and foremost, understand whether you are a Scalper or Intraday trader or Swing trader or Positional Trader.

Create an account in @tradingview

2/ Set the Time Frame (TF) of the Charts:

• Scalper: the TF you would use would be in the range of 1- 5min
• Intraday Trader: 5-15min TF
• Swing Trader: Hourly to Daily
• Positional Trader: Weekly

3/ Be aware of the trend at higher TF.

No matter which type of trader you are, its important to know the trend at higher TF.

Crucial to know whether its a buy on dip market or sell on rise market.

In my outlook for the week for #BANKNIFTY & #NIFTY I cover multi TF analysis.

4/ Identify the major Demand & Supply Zone:

• A supply zone is the price area where traders have the highest selling interest or potential.

• A demand zone is the price area where the traders have the highest buying interest or potential.

How I traded intraday today being a Friday. Look at this chart and try to understand, watch the IPL and enjoy your weekend.

@ITRADE191 @AdityaTodmal Maine thoda coloufull banaya h..and added to system also....

The most valuable hedging strategy you aren't using:

The IRON FLY STRATEGY.

Knowing how to use it will protect you from gaps and intraday spikes and 10x your hedging experience.

Here's the step-by-step guide:

Collaborated with @niki_poojary

Here's what you'll learn in this thread:

1. What is an iron fly
2. Perks and Drawbacks
3. What to do when in profit?
4. How to adjust when in loss?
5. Thread on How to keep shifting an iron fly for max credit?
6. Risk-free trades benefits

Let's dive in ↓

1/ What is an iron fly?

Sell ATM CE and PE (Short straddle)
Buy OTM CE and PE (Hedge it by buying on both sides)

Look at the picture below for an example of an iron fly in current weekly options.

2/ Why do traders like iron fly?

Many traders want to receive maximum theta or max credit.

This is why they sell straddles.

But straddles have unlimited risk in them, and can't handle gaps or intraday spikes.

This is why traders like knowing the maximum loss in their trades.

3/ Perks of Iron Fly

Low capital required—Possible to buy first, sell later

Limit losses—Know your maximum loss upfront

Adjustments—Can reduce losses to zero or almost nothing

Weekly earnings—Possible on a weekly basis

Jackpot—Potential for a jackpot if it expires in middle