Hi Nautilus,
Thanks for posting profit and loss of the trade. You are showing a loss of mere Rs.9910.00, which is extremely a small percentage of the total bet. The reason for this loss is nothing else but your own bias of the market.
In a delta neutral trade, one should not have any bias at all. One should go into the trade with neutral bias, and as the market makes move, one should adjust the trade. Your bearish bias forced us to hold the long position of 2000 put options, but market never looked back. If you look the moves I suggested to you to take, first selling 400 short puts SP2350 was also to reduce the effect of your bearish bias. Secondly selling 200 short calls SP2480 as covered call against long position of 200 long futures further reduced our loss. I am quoting your comments here under along with my comments addressed to you and Joy Mitali in the previous posts.
My purpose is not to blame you for the loss at all. After all it is just a mock trade. The purpose is to make you understand as how the trade should be executed. In the coming days we are going to have greatest time loss on all the options. Since market has not gone thru the correction and has had a bullish run for almost ten trading days. It should be ready to make a correction any time. Now that we are loosing money we need to be aggressive in our approach (We will assume more risk in order to offset our losses). In order to break even we have to collect at least Rs.10, 000.00 as premium. So lets go and sell some put options to collect this premium. I would like to sell 1000 put options at this time at a price of no less than Rs.10.00 each. You look into the option chain and whatever strike price gives you Rs.10.00 premium, sell those put options. SP2380 or 2390 put options should give you that premium. Wait at least one hour after the market opens before executing your trade. If you see that market is correcting then wait little longer, purpose is to collect the most premium by selling the least strike priced put options
In the meanwhile think it thru and ask me any question that come to your mind, it apply to all the readers as well.
Regards,
Wastej
Thanks for posting profit and loss of the trade. You are showing a loss of mere Rs.9910.00, which is extremely a small percentage of the total bet. The reason for this loss is nothing else but your own bias of the market.
In a delta neutral trade, one should not have any bias at all. One should go into the trade with neutral bias, and as the market makes move, one should adjust the trade. Your bearish bias forced us to hold the long position of 2000 put options, but market never looked back. If you look the moves I suggested to you to take, first selling 400 short puts SP2350 was also to reduce the effect of your bearish bias. Secondly selling 200 short calls SP2480 as covered call against long position of 200 long futures further reduced our loss. I am quoting your comments here under along with my comments addressed to you and Joy Mitali in the previous posts.
My purpose is not to blame you for the loss at all. After all it is just a mock trade. The purpose is to make you understand as how the trade should be executed. In the coming days we are going to have greatest time loss on all the options. Since market has not gone thru the correction and has had a bullish run for almost ten trading days. It should be ready to make a correction any time. Now that we are loosing money we need to be aggressive in our approach (We will assume more risk in order to offset our losses). In order to break even we have to collect at least Rs.10, 000.00 as premium. So lets go and sell some put options to collect this premium. I would like to sell 1000 put options at this time at a price of no less than Rs.10.00 each. You look into the option chain and whatever strike price gives you Rs.10.00 premium, sell those put options. SP2380 or 2390 put options should give you that premium. Wait at least one hour after the market opens before executing your trade. If you see that market is correcting then wait little longer, purpose is to collect the most premium by selling the least strike priced put options
In the meanwhile think it thru and ask me any question that come to your mind, it apply to all the readers as well.
Regards,
Wastej
