Low Risk Low Returns- Target 50 NF per month per NF Lot

[jamit_05]

This meal is uncooked. A major mistake was committed in selling so many PEs at one go. Focus on keeping speculation out of the way. Only balance Delta as the price moves. Over and above take small chances only.

 

[jamit_05]

From stock 2, sold 5900 APR PE @ 116;

 

[SaravananKS]

From stock 2, sold 5900 APR PE @ 116;

That is increasing delta in falling market ??

 

[jamit_05]

150*70 5900 MAR PEs = 10500 (3 pe)
200*64 5900 MAR PEs = 12800 (4 pe)
200*44 5900 MAR PEs = 8800 (4 pe)
200*22 5800 MAR PEs = 4400 (4 pe)

NF 6000-5700 = 300*100 = 30000 (2)
100*117 5900 APR CE = 11700 (2)
50*130 5800 APR CE = 6500 (1)

==========================

Total Gain = 84700

5 Lots of 5700 PE and 5 lots of NF left.

Consequences of have too much biased Delta:

Now

5900 Mar PEs cost 100
5800 Mar PEs cost 55

If I were to reset the excess risk taken to restore Delta. My loss would be

100-70 = 30 * 3 *50 = 4500
100-65 = 35 * 4 * 50 = 7000
100-44 = 56 * 4 * 50 = 11200
55-22 = 33 * 4 *50 = 6600

Total = 29300;

Now sell 5700 APR PE same number of lots

52 * 15 * 50 = 39000;

Nett Loss/profit: 9700 gain; This is monetary gain because we had sold Mar PE and upon reversal we are now selling APR CEs which are in stock. So the APR ones will naturally gain more in % than the march ones !! (Think of it like Calendar Spreads)

On the other hand we are unwinding the positions.

Was this a risk worth taking?
Well, yes. Because had it worked out, I would have gotten good value for, the supposedly, worthless PEs.

Current Stock 1: 5 Pes and 5 NFs. So when the uptrend comes sell the NFs. And wait for PEs to leave.

 

[jamit_05]

So far in stock 2 we had SOLD

5900 APR PE @ 116 = 5800
5900 APR PE @ 100 = 5000

Total: 10800

 

[internet_fanbboy]

Jamit,

As you said in an earlier post, Theta is the number 1 enemy. So why not take positions by selling options ?

Actually, one can do a mix, at times buy options and at times sell options, which one to do when is the million dollar Q.

 

[jamit_05]

Jamit,

As you said in an earlier post, Theta is the number 1 enemy. So why not take positions by selling options ?

Actually, one can do a mix, at times buy options and at times sell options, which one to do when is the million dollar Q.

Writing options requires a very different mindset. Strategies are completely different. And is very capital intensive. It is for the big pockets.

I expect a lot better return for my money, plus I have not got my mind around any strategy to write options.

 

[jamit_05]

From Stock 1 sold all remaining 5 lots NFs of APR month @ 5950;

Total Gain 5 * 50 * (5950-5700) = 62500

Still have 5700 APR PEs 5 lots pending. Will Sell when market falls, which it should before expiry.

Now focus on Stock 2.

 

[jamit_05]

Total Gain in Stock 1:

84700 + 9700 + 62500 = 156900;

We have covered calls to be accountable for. Remember the transactions:

100*117 5900 APR CE
50*130 5800 APR CE

This is blocking 3 NFs. Keep them in mind in case trend reverses to down.

 

[jamit_05]

SOLD APR 6000 CE @ 88
(This has addtnl 100 points of potential if market keeps above 6000)

Including earlier sold

APR 5900 PE @ 116
APR 5900 PE @ 100
===============

Total Points gained:

116+100+88 - 180 = 124 Gain on this NF lot.... very nice.


Balance Stock 2:

9 Nf APR which were bot @ 5936
18 APR 5900 PE Lots which were bot @ 90