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

[jamit_05]

Volatility in the market has increased.

The total Theta of my portfolio was 1150;
Now it is 1230; at around the same Spot Price.

Quite clearly, it is a bad time to buy Options. Good time to sell.

Total Theta is back down to 1138; In addition, 62/59 premium fell by Rs.20 in one single day. Volatility has shrunk. Probably a good time to take partial profit on my strangles.

 

[jamit_05]

A Daily Close Below 5900, will change the major trend to down.

But, before that happens it is likely that the price may touch 6200 at least once. The option table is somewhat biased such, but not decisively yet since it has been only a one day into new expiry.

 

[jamit_05]

It is possible that 5900 acts as support. So, we will take our chance.

Short a 60/59 Strangle

If Support breaks, we will square off 59 PE at a loss and let 60 CE decay.
Else If todays HOD breaks conclusively in the coming days we will square off 60 CE; And let 59 PE to decay.

Credit 160; Will decay by 4 points everyday.

PS: Got a fill for 155.95; Not happy.

 

[jamit_05]

Had sold strangle

6100 CE
5900 PE

for a total of 164. It went up to 172; Time decay covered up for my bad timing. Now is 145;

It is now 120 !!

Will exit when price comes back to 6050 or when 5900 breaks. This strangle has outlived its purpose.

 

[jamit_05]

Today feels like a bad timing for shorting 59/60 because the pair lost Rs.14 today itself, where it has a theta of only 4.25 !! This may be a wrong move... but lets see how it pans out. It will be a lesson for the future.

 

[jamit_05]

After the 2nd week the premium is less and delta is more, which makes it an apt setting for buying Options with a strict intention of getting out at a target, which is achievable in a day or two.

 

[jamit_05]

It is possible that 5900 acts as support. So, we will take our chance.

Short a 60/59 Strangle

If Support breaks, we will square off 59 PE at a loss and let 60 CE decay.
Else If todays HOD breaks conclusively in the coming days we will square off 60 CE; And let 59 PE to decay.

Credit 160; Will decay by 4 points everyday.

PS: Got a fill for 155.95; Not happy.

As suspected, it was a terrible timing. It is now 161 !!
A lesson learned. Will wait for an up-tick.

 

[jamit_05]

As suspected, it was a terrible timing. It is now 161 !!
A lesson learned. Will wait for an up-tick.

Back to 151... but the point still is noteworthy: always short at uptick.

 

[jamit_05]

An excellent Strangle:

July 56/62 Credit: 80; Theta Rs.2;

Both these Strikes are well protected. Price will require to breakout to trade across these levels, which will give us plenty of opportunity to make amends.

Now the timing.

Just checked the total prm for the last few days, and Rs.80 is the lowest. I want at least 84, which was there at yest EOD. Not too much to ask for, eh!

 

[jamit_05]

An excellent Strangle:

July 56/62 Credit: 80; Theta Rs.2;

Both these Strikes are well protected. Price will require to breakout to trade across these levels, which will give us plenty of opportunity to make amends.

Now the timing.

Just checked the total prm for the last few days, and Rs.80 is the lowest. I want at least 84, which was there at yest EOD. Not too much to ask for, eh!

The delta is skewed too much on the above.

But, 57/62 is well balanced; Credit 101; Theta 2.20;