Danji,
You have provided links for very good tools. I have bookmarked these. I verify my calculation from these from time to time just to check that I did not make any serious mistakes in my programs.
There are two questions:
(1) So far, I traded in options expiring in the forthcoming month. For example, I have taken a position for options expiring in Jan 2014. What are your views on options expiring in 2,3 or 6 months. Theortically speaking, the risk is more but I want to know about your practical experience in this regard.
(2) My software has given some peculiar strategies. One example is:
Transaction to be done on 30 Dec 2013 for Base Index at 6316.10
Buy 6300 CE at Price 146
Sell 6500 CE at Price 52.08
Buy 6500 PE at Price 178.25
Sell 6300 PE at Price 77.95
Net Points Received: 194.22
Delta: -0.00449
Gamma: 0.00005
Theta: 0.13947
Vega: -0.05581
Rho: -0.18903
Profit is 5.78 irrespective of index at any value. What is margin requirement and what is the gain in percentage. I know it is difficult to execute (as price keep changing every second) but using automated system we can execute such trades. However, I want to know the net result before executing such strategies.
Many thanks in advance. We are all greatly benefiting from your experience and the way you are explaining options trading. You are also sharing lot of links where lot of useful information is available.