Low Risk Options Trading Strategy - Option Spreads

[DanPickUp]

Hi vssoma

In total you have 31.2 points plus. I do not know about your brokerage.

What is your outlook for the market and what have been the reasons to build up this whole trade with that positions ?

DanPickUp

 

[seetharamank]

dear,
i entered below trade on 18th of this month, pls. check below....
Buy NF aug. @ 5437
Sell Sep. 5400 CE @ 132
Buy aug. 5200 PE @ 5.8

now ( 23-AUG-2010 10:24:19 Hours IST)
NF @ 5533
Sep. 5400 CE @ 192
aug. 5200 PE @ 1

what should i do now....exit or wait for some time.

u are in good profits why u want to wait for somemore time buddy square off is my opinion

 

[seetharamank]

sorry u are in marginal profit let experts answer

 

[seetharamank]

why 0 sir if spotclosed at5520

 

[DanPickUp]

Hi vssoma

The answer is given by the outlook you have on the market.

Take care

DanPickUp

 

[vssoma]

Hi vssoma

In total you have 31.2 points plus. I do not know about your brokerage.

What is your outlook for the market and what have been the reasons to build up this whole trade with that positions ?

DanPickUp

dear,
as of my little knowledge on options, it is covered call - hedged with put.
as a learner i am trying different strategies ( of course, you know that, i am regularly posting here).

at the time of initiate this strategy, i was bullish for one week, that's why i entered in trade. as per my schedule i have to wait for 2 or3 days more. but now i have a doubt about market that it may reverse. that's why i need your ( seniors) suggestion on market direction.

if my view is correct,( if it takes reverse) still i have confusion, cause i have 2 options, from that i need to choose one. which are

1) exit completly strategy and reenter with covered put-hedge with call ( sell NF and next month put, buy this month call)

2) exit only NF and enter in short with it. and to hedge i'll buy sep. OTM call

so.....i am in confusion....which one to choose....?????

 

[DanPickUp]

dear,
as of my little knowledge on options, it is covered call - hedged with put.
as a learner i am trying different strategies ( of course, you know that, i am regularly posting here).

at the time of initiate this strategy, i was bullish for one week, that's why i entered in trade. as per my schedule i have to wait for 2 or3 days more. but now i have a doubt about market that it may reverse. that's why i need your ( seniors) suggestion on market direction.

if my view is correct,( if it takes reverse) still i have confusion, cause i have 2 options, from that i need to choose one. which are

1) exit completly strategy and reenter with covered put-hedge with call ( sell NF and next month put, buy this month call)

2) exit only NF and enter in short with it. and to hedge i'll buy sep. OTM call

so.....i am in confusion....which one to choose....?????

Hi vssoma

Here my updated comment and only my personal view, nothing more and nothing else, as I overlooked one of your statements before. ( Sorry )

I will give show you a trading lesson, you never had before and you not will get so quickly again.

24 August 2010

As this stuff is never where for free in the world, I deleted it today.

The one, which have it, use it wisely and keep it as a little diamond and the rest has to wait for a new moment.

As I was sometimes a little rude in this forum, that was my present to the real option traders in this forum and at the same time my excuse.

But it is not mentioned to be a given to any body.

Take care

DanPickUp

 

[DanPickUp]

Hi vssoma

Just updated the last post, as I overlooked one of your statements and today 24 of August 2010 I deleted it of the reasons you can read in the post.

DanPickUp

 

[mukeshpatil82]

Hello Friends,

Have been away for nearly four months and trying to get updated on our gr8 forum.

Im considering the following spread for September:

Outlook: Neutral to slightly bullish.

Type Strike Expiration Avg Price Qty

Long Call 5600 Sept30 56.40 1,
Short Call 5700 Sept30 24 2,

Max. Loss below 5600:8.45.
Max. Profit : 5700:34%,
Above 5700: I will buy back the short 5700 call as loss becomes unlimited and convert it to a bull call spread.

Pls. give your opinions on this position. Ideally such calls need to be done at credit so that loss below the lower strike is zero and the spread is profitable in the entire price range upto 5700.

However im unable to find any credit sperads after considering various nifty strikes. Is this strategy feasible for nifty?

Regards,

 

[AW10]

Hello Friends,

----
Outlook: Neutral to slightly bullish.

Type Strike Expiration Avg Price Qty

Long Call 5600 Sept30 56.40 1,
Short Call 5700 Sept30 24 2,

Max. Loss below 5600:8.45.
Max. Profit : 5700:34%,

---------

when outlook is slight bullish, then whay aren't u gambling and expecting mkt to break strong resistance zone of 5550/5600 and show u any profit. OTM spreads make sense when view is strong bullish.

As this trade is opened at debit of 8, so u are loosing right from start. By selling 2 far OTM calls, it is still not working out.

Above 5700: I will buy back the short 5700 call as loss becomes unlimited and convert it to a bull call spread.

good to see the exit strategy.. but by the time this happens, 5700 call would have gone up in value..and u might end up booking bigger loss and hence reducing the profitability of remaining long spread.

IMO, you shd be looking at increase in volatility and try to position with net long call positions rather then net short position.. Any increase in volatility will have -ive impact on this spread due to higher short positions.

hope this helps.
happy trading.