200 lots 25000 PE sell at 102
200 lots 27000 CE sell at 161
You can sell from below image that if I had waited in this strangle till day end I would have lost around -4.5 L
So lets see what all adjustments did I do logically.
Thread
How to manage strangles dynamically incase of a violent move or IV spike ?
1) Yesterday and infact entire last week if you had created strangles you would have experienced that during upmove only call side were increasing but puts weren’t decaying.
#trading #Options
200 lots 25000 PE sell at 102
200 lots 27000 CE sell at 161
You can sell from below image that if I had waited in this strangle till day end I would have lost around -4.5 L
So lets see what all adjustments did I do logically.
So I had kept 100 lots buy on 26500 CE at 400(day high)
My buy got executed at 400 around 12:15 pm & I exited 25000 PE at 75
The buy got executed at 12:15 pm
So my current open postions now were
200 lots 26500 buy at average 420
200 lots 27000 CE sell at 161
As short strangles are basically short vol so if there is a movement on one side with no decay then one can start buying atm calls.
What this does is it converts your strangles into ratio spread and if move continues eventually into a debit spread
(Payoff is not exact as I exited my sold put earlier)
But without adjustment MTM would have been -4.5 L and I ended in slight green due to trade management inspite of a 100 point spike in sold strangles
As now you are into a debit spread max loss is capped and if market reverses you can sell additional calls to convert position into a ratio spread again
So basically :
26500 CE buy
27000 CE Sell
27500 CE Sell (extra)
More from Sourabh Sisodiya, CFA
Thread 🧵:
A Day in the Life of a Trader (A day in my Life)
1) I absolutely love my work❤️! In fact, I grew up dreaming to be a trader. So trading, to me, doesn’t feel like working (except when I lose😂).
It’s fascinating because it’s different every day.
#trading #life
2)7:30 AM : Alarm Rings
A typical week day for me begins at 7:30 AM.
I spend the next 30 minutes on my daily chores — get ready for office, grab a quick breakfast & have a hot cuppa coffee.
3) 8:00 AM : Leave for office
On my way to office, I check what happened at the Wallstreet overnight & how are Asian markets performing.
I then look for any macro news that may affect overnight positions
P.S: We are moving to a new bigger office & will share pics of that soon
4) 9 AM - Connect with Trade Room members
I connect with trade room members on zoom & share my plan for the day, stocks to keep in radar & how to play the index & which option strategies to execute
For more details about Online Trade Room you can check
https://t.co/WrQPxhABsE
5) 9:07 - Pre Opening session
I keenly observe the pre-opening to get a general sense of where the market is it likely to open. At 9:07 AM, the pre-opening prices are out. I make a note of stocks opening with a big gap up or gap down and keep them on my watchlist.
A Day in the Life of a Trader (A day in my Life)
1) I absolutely love my work❤️! In fact, I grew up dreaming to be a trader. So trading, to me, doesn’t feel like working (except when I lose😂).
It’s fascinating because it’s different every day.
#trading #life
2)7:30 AM : Alarm Rings
A typical week day for me begins at 7:30 AM.
I spend the next 30 minutes on my daily chores — get ready for office, grab a quick breakfast & have a hot cuppa coffee.
3) 8:00 AM : Leave for office
On my way to office, I check what happened at the Wallstreet overnight & how are Asian markets performing.
I then look for any macro news that may affect overnight positions
P.S: We are moving to a new bigger office & will share pics of that soon
4) 9 AM - Connect with Trade Room members
I connect with trade room members on zoom & share my plan for the day, stocks to keep in radar & how to play the index & which option strategies to execute
For more details about Online Trade Room you can check
https://t.co/WrQPxhABsE
5) 9:07 - Pre Opening session
I keenly observe the pre-opening to get a general sense of where the market is it likely to open. At 9:07 AM, the pre-opening prices are out. I make a note of stocks opening with a big gap up or gap down and keep them on my watchlist.
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Always. No, your company is not an exception.
A tactic I don’t appreciate at all because of how unfairly it penalizes low-leverage, junior employees, and those loyal enough not to question it, but that’s negotiation for you after all. Weaponized information asymmetry.
Listen to Aditya
And by the way, you should never be worried that an offer would be withdrawn if you politely negotiate.
I have seen this happen *extremely* rarely, mostly to women, and anyway is a giant red flag. It suggests you probably didn’t want to work there.
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Always. No, your company is not an exception.
A tactic I don’t appreciate at all because of how unfairly it penalizes low-leverage, junior employees, and those loyal enough not to question it, but that’s negotiation for you after all. Weaponized information asymmetry.
Listen to Aditya
"we don't negotiate salaries" really means "we'd prefer to negotiate massive signing bonuses and equity grants, but we'll negotiate salary if you REALLY insist" https://t.co/80k7nWAMoK
— Aditya Mukerjee, the Otterrific \U0001f3f3\ufe0f\u200d\U0001f308 (@chimeracoder) December 4, 2018
And by the way, you should never be worried that an offer would be withdrawn if you politely negotiate.
I have seen this happen *extremely* rarely, mostly to women, and anyway is a giant red flag. It suggests you probably didn’t want to work there.
You wish there was no negotiating so it would all be more fair? I feel you, but it’s not happening.
Instead, negotiate hard, use your privilege, and then go and share numbers with your underrepresented and underpaid colleagues. […]
