VIX at 13.67... lower end of the trading band...
Bot 5900 straddle at 193 of jan series....!
does the trade sound right to you...?
A discussion on this trade....
[2:32:45 PM] linkon7: when we have vix hitting the low like this
[2:32:52 PM] linkon7: we buy straddle or strangle
[2:32:57 PM] linkon7: keep it neutral
[2:33:11 PM] linkon7: like 5900 put long and 6000 call long
[2:33:32 PM] Murali R: ok.
[2:34:31 PM] Murali R: is there any parameters to decide when to buy straddle and when strangle?
[2:36:31 PM] Murali R: I generally wait for nifty to come near a BRN before buying/selling them. since u told 5900PE and 6000CE, how did u choose the stike price?
[2:36:53 PM] Murali R: if nifty is at 5900, then 5900PE and CE. if nifty between 5900 and 6000, then 5900PE and 6000CE. Is it like that?
[2:43:22 PM] linkon7: 5900 put is at 70
[2:43:30 PM] linkon7: 6000 call is at 70
[2:43:40 PM] linkon7: pair cost 140
[2:43:49 PM] linkon7: which is perfectly neutal
[2:44:02 PM] linkon7: buying 5900 straddle is bullish
[2:44:14 PM] linkon7: since total is 192 now
[2:44:26 PM] linkon7: 71+121
[2:44:35 PM | Edited 2:44:50 PM] linkon7: delta is more neutral if both legs have same price
[2:44:57 PM] linkon7: 121 is bullish
[2:45:11 PM] linkon7: so a scenario when both legs are equal
[2:45:22 PM] linkon7: will cause me to loose 10-15 points
[2:46:00 PM] Murali R: ok.
[2:46:16 PM] Murali R: the view is, it will breakout to one side in the next 2 weeks..
[2:46:33 PM] Murali R: shall I also buy it?
[2:46:38 PM] linkon7: its worth buying
[2:46:55 PM] linkon7: buy 5900-6000 if u feel it can swing both ways
[2:47:08 PM] linkon7: buy 5900 straddle if u feel bullish BO more likely
[2:47:38 PM] linkon7: if u buy 5900-6000 strangle..then keep sl at 100
[2:47:41 PM] linkon7: add at 120
[2:47:52 PM] linkon7: if u trade 4 pairs total
[2:48:09 PM] linkon7: then max loss is 6 K
[2:48:56 PM] linkon7: that a total of 4 lots each
[2:48:59 PM] Murali R: so it is like.. enter with 2 pairs and add 2 pairs at 120. exit all 4 at 100. on good side, exit the 2 pairs when in profit.
[2:49:02 PM] linkon7: including adds
[2:49:16 PM] linkon7: yes
[2:49:24 PM] linkon7: 2 lots each now
[2:49:33 PM] linkon7: 2 lots each if total is 120
[2:49:40 PM] linkon7: exit all for if 100 is hit
[2:51:47 PM] linkon7: if u decide to do 5900 straddle
[2:51:59 PM] linkon7: then add point is when both legs are trading at the same value
[2:52:21 PM] linkon7: and sl at 160 for the total
[2:53:29 PM] Murali R: nifty looks like ranging only... so will go with 5900PE and 6000CE itself.
[2:54:56 PM] Murali R: bought 100 each. together 141 for me.
[2:55:38 PM] linkon7: ok
[2:56:00 PM] linkon7: welcome to the lazy way of trading
[2:56:10 PM] Murali R:
[2:56:29 PM] linkon7: we dont have to pick a direction... to make money
[2:56:42 PM] linkon7: we are playing for expansion
[2:56:45 PM] Murali R: that is where I started....
[2:56:46 PM] linkon7: can go either ways
[2:56:59 PM] linkon7: and we dont care as such
[2:57:14 PM] linkon7: i got 1500 qty now.. each
[2:57:17 PM] Murali R: but when I started, I wasn't clear about the structure.. now I know why we are buying etc..
[2:57:23 PM] linkon7: expecting this to be a monster of a trade
[2:57:24 PM] Murali R: 1500 :O
[2:57:37 PM] linkon7: if this trade fails
[2:57:39 PM] linkon7: i loose 50 K
[2:57:44 PM] linkon7: roughly
[2:57:48 PM] linkon7: wont micro manage this
[2:58:19 PM] linkon7: its like..wait for both legs to ne equal
[2:58:28 PM] linkon7: will add 1000 more
[2:58:35 PM] linkon7: and then 160 is sl
[2:58:50 PM] linkon7: might end up loosing 25% of my capital on this trade
[2:58:59 PM] Murali R: [2:58 PM] linkon7:
<<< its like..wait for both legs to ne equalwhat is ne equal?
[2:59:16 PM] Murali R: that is too much of risk linkon... 25% of the capital...
[2:59:23 PM] linkon7: 5900 put = 5900 call
[2:59:30 PM] Murali R: but yeah.. u will earn 25 in one month itself
[2:59:43 PM] linkon7: this is a very long series
[2:59:48 PM] linkon7: 31st is expiry
[3:00:02 PM] linkon7: so time erosion is less
[3:00:12 PM] linkon7: trade is innitiated at the lower end of the VIX
[3:00:27 PM] linkon7: i can micro manage and trade myself out of a bad scenario
[3:00:35 PM] linkon7: gaps in either direction is welcome
[3:01:21 PM] linkon7: ur choice is proven right
[3:01:25 PM] linkon7: 5900-6000
[3:01:42 PM] Murali R: meaning? it can go either way?
[3:01:45 PM] linkon7: yes
[3:01:52 PM] linkon7: it was perfectly neutral
[3:01:57 PM] Murali R: it is actually going down.. but still in range right...
[3:01:58 PM] linkon7: mine was delta positive
[3:02:12 PM] linkon7: 6000 call cant become 0
[3:02:22 PM] linkon7: there will be time value cushion
[3:02:29 PM] linkon7: 31st is expiry
[3:02:39 PM] Murali R: Yeah.. lot of days to expire.
[3:09:21 PM] linkon7: 143 total now
[3:09:30 PM] linkon7: on 5900-6000
[3:10:19 PM] Murali R: Yeah...
[3:12:37 PM] linkon7: i am loosing on total
[3:13:02 PM] linkon7: my bias was long
[3:13:07 PM] linkon7: positon was more neutral
[3:13:27 PM] linkon7: for your 5900-6000 strangle
[3:13:36 PM] linkon7: my straddle was delta positrive
[3:14:03 PM] Murali R: Ok.
[3:14:07 PM] linkon7: my pivot is 5900
[3:14:15 PM] linkon7: ur pivot is 5950
[3:14:29 PM] linkon7: more it shifts away from pivot
[3:14:46 PM] linkon7: more delta one leg aquires
[3:15:26 PM] linkon7: theta... or time value.. wont come down in a hurry
[3:15:34 PM] linkon7: for the loosing leg
[3:16:00 PM] Murali R:
. let us see how it goes.. as far as nifty is doing, it goes down one day and comes up next day...
[3:16:06 PM] linkon7: yaa
[3:16:19 PM] linkon7: closer price comes to my pivot of 5900
[3:16:24 PM | Edited 3:16:30 PM] linkon7: i loose more
[3:16:53 PM] linkon7: max loss near 5900 for me
[3:16:59 PM] linkon7: on jan futures
[3:17:14 PM] Murali R: Yeah... same here also... the more it swings back and back at pivot, we will loose like anything...
[3:17:22 PM] linkon7: yup