This friend had trouble making money in options though he was directionally right. Let us see how a basic understanding of greeks would have helped him, This thread will be about two attributes of option pricing, extrinsic value and theta
Sir, today #niftybank was continue making new high, but 31700 CE was struggling to go up. I bought at 140, some how managed to sell it at 200. I m ok, in identifying directional edge but options behave differently.
— Vikash Shrivastava\U0001f1ee\U0001f1f3 (@VikashS28) May 27, 2019
1. He was playing pure extrinsic value
2. He has a high theta burn rate so close to expiry, the highest
THIS IS HOW GREEKS HELP YOU !
1. https://t.co/LpbzrgqvaH ( web based)
2. https://t.co/5AHY0EmfH9 ( software)
BOTH FREE, use them
More from Subhadip Nandy
Perhaps you have the idea that calling me " 1 lot Nandy" is somehow derogatory and a easy poke at me. Allow me to explain why I look at this moniker as a badge of honour
I have traded 1 lot continuously twice in my life. The first in 2003 after I blew up on my INFY trade. I traded 1 lot ACC fut consistently and made 50k in a month
The 2nd time in 2013. When I suffered continuous losses for 5-6 months due to a variety of psychological issues. Then I traded 1 lot Nifty options consistently for 3 months. After that 2 lots for next 1 month and slowly increased
I have shared these two incidents on my various interveiws and regularly share this in detail with my handholding students when I talk about trading psychology.
This logic of trading 1 lot to iron out trading issues I learnt from the interview of Anthony Saliba, who traded 1 lot in options for 6 months. BTW, Saliba was the only options trader to have been profiled on the original Market Wizards ( I read his interview and used his logic)
Sir itseems people call you as "one lot Nandy".. Is it true?
— Bittu (@nanoobittu) July 16, 2021
I have traded 1 lot continuously twice in my life. The first in 2003 after I blew up on my INFY trade. I traded 1 lot ACC fut consistently and made 50k in a month
The 2nd time in 2013. When I suffered continuous losses for 5-6 months due to a variety of psychological issues. Then I traded 1 lot Nifty options consistently for 3 months. After that 2 lots for next 1 month and slowly increased
I have shared these two incidents on my various interveiws and regularly share this in detail with my handholding students when I talk about trading psychology.
This logic of trading 1 lot to iron out trading issues I learnt from the interview of Anthony Saliba, who traded 1 lot in options for 6 months. BTW, Saliba was the only options trader to have been profiled on the original Market Wizards ( I read his interview and used his logic)
This question might have rose in your mind too, that why VIX was lower than yesterday despite the huge selloff today.
This is what I think happens . A thread.
What is VIX ?
https://t.co/VOkAwGRsHL
What is IV ( implied volatility ) ?
Now my explanations. IV is simply demand and supply. IV is back calculated from option prices and not given by the BSM model. When demand for options ( by buyers) are high, IVs will be high. When supply of options ( by sellers) are high, IV will be low.
Now look at this chart. Nifty fut and VIX are plotted together ( red line is the VIX). Yesterday's massive breakdown forced traders to hedge their positions by buying puts ( could be cash holdings, could be future longs, could be sold puts). This excess demand spiked up IVs /VIX
This is what I think happens . A thread.
Market is highly volatile but vix is down by 4%
— Jegathesan Durairaj (Jegan) (@itjegan) May 13, 2022
What is VIX ?
https://t.co/VOkAwGRsHL
What is IV ( implied volatility ) ?
Now my explanations. IV is simply demand and supply. IV is back calculated from option prices and not given by the BSM model. When demand for options ( by buyers) are high, IVs will be high. When supply of options ( by sellers) are high, IV will be low.
Now look at this chart. Nifty fut and VIX are plotted together ( red line is the VIX). Yesterday's massive breakdown forced traders to hedge their positions by buying puts ( could be cash holdings, could be future longs, could be sold puts). This excess demand spiked up IVs /VIX
More from Trading
Want to master Option Selling for free?
Here are the best resources.
A thread 🧵👇
Collaborated with @niki_poojary
1. Best book of knowledge for a beginner?
Zerodha Varsity from @Nithin0dha's team is the best book for a newcomer to read and increase his basic knowledge about options, especially for the Indian markets.
Link:
2. Best Youtube channel on Options Trading?
The @tastytrade financial network. It's a foreign channel that focuses mostly on selling options.
They teach all strategies for free with their backtests.
Big on Straddle/Strangles selling.
Links:
3. Top Indian YouTube Channel for Options?
Power of Stocks - Subhasish Pani
What you'll learn:
1. How to form a trading plan.
2. How to scale an account with risk-reward in option selling.
3. Technical analysis logics you can use daily.
15
4. What are the preconditions to start option Selling:
You should know technical Analysis basics like:
- Support/Resistance
- Chart Patterns
- Candle Patterns
- Dow Theory (HH, LL)
This will help you start taking high-probability trades.
Here are the best resources.
A thread 🧵👇
Collaborated with @niki_poojary
1. Best book of knowledge for a beginner?
Zerodha Varsity from @Nithin0dha's team is the best book for a newcomer to read and increase his basic knowledge about options, especially for the Indian markets.
Link:
2. Best Youtube channel on Options Trading?
The @tastytrade financial network. It's a foreign channel that focuses mostly on selling options.
They teach all strategies for free with their backtests.
Big on Straddle/Strangles selling.
Links:
3. Top Indian YouTube Channel for Options?
Power of Stocks - Subhasish Pani
What you'll learn:
1. How to form a trading plan.
2. How to scale an account with risk-reward in option selling.
3. Technical analysis logics you can use daily.
15
15 Learnings from Power of Stocks: \U0001f9f5
— Aditya Todmal (@AdityaTodmal) January 23, 2022
Collaborated with @niki_poojary
4. What are the preconditions to start option Selling:
You should know technical Analysis basics like:
- Support/Resistance
- Chart Patterns
- Candle Patterns
- Dow Theory (HH, LL)
This will help you start taking high-probability trades.
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@franciscodeasis https://t.co/OuQaBRFPu7
Unfortunately the "This work includes the identification of viral sequences in bat samples, and has resulted in the isolation of three bat SARS-related coronaviruses that are now used as reagents to test therapeutics and vaccines." were BEFORE the
chimeric infectious clone grants were there.https://t.co/DAArwFkz6v is in 2017, Rs4231.
https://t.co/UgXygDjYbW is in 2016, RsSHC014 and RsWIV16.
https://t.co/krO69CsJ94 is in 2013, RsWIV1. notice that this is before the beginning of the project
starting in 2016. Also remember that they told about only 3 isolates/live viruses. RsSHC014 is a live infectious clone that is just as alive as those other "Isolates".
P.D. somehow is able to use funds that he have yet recieved yet, and send results and sequences from late 2019 back in time into 2015,2013 and 2016!
https://t.co/4wC7k1Lh54 Ref 3: Why ALL your pangolin samples were PCR negative? to avoid deep sequencing and accidentally reveal Paguma Larvata and Oryctolagus Cuniculus?
Unfortunately the "This work includes the identification of viral sequences in bat samples, and has resulted in the isolation of three bat SARS-related coronaviruses that are now used as reagents to test therapeutics and vaccines." were BEFORE the
chimeric infectious clone grants were there.https://t.co/DAArwFkz6v is in 2017, Rs4231.
https://t.co/UgXygDjYbW is in 2016, RsSHC014 and RsWIV16.
https://t.co/krO69CsJ94 is in 2013, RsWIV1. notice that this is before the beginning of the project
starting in 2016. Also remember that they told about only 3 isolates/live viruses. RsSHC014 is a live infectious clone that is just as alive as those other "Isolates".
P.D. somehow is able to use funds that he have yet recieved yet, and send results and sequences from late 2019 back in time into 2015,2013 and 2016!
https://t.co/4wC7k1Lh54 Ref 3: Why ALL your pangolin samples were PCR negative? to avoid deep sequencing and accidentally reveal Paguma Larvata and Oryctolagus Cuniculus?
