K gr8, Just sharing my inputs.
NIFTY at 7353.00
The danger with buying 7200 pe @ 58
1) Nifty runs up in this case 58 will come down quickly
2) Nifty stays where it is for a week. IVs go down marginally and theta eats up premium
Assuming nifty stays at 7353 for 4 days with 20 days to expire and vega goes down marginally it would be worth 48.
How do u plan to deal these scenarios as and when if it arises
How about buying 7200 pe and selling 7100 pe at 36.
In this case if Nifty stays where it is for a week. IVs go down (even if it stays same) and theta eats up premium
our 58 would go down to 48 but 36 becomes 28. So a loss 2 points in this scenario Max loss again would be capped to of course 22.
Positive scenario Lets say if nifty touches 7200 in 4 days our 58 becomes 100 and 36 becomes 63.
Total profit 42- 27 = 15
Sure this can be done at runtime too but would be good if we can list how do we tackle the above 2 scenarios
DONE!!!
Before we start let me tell you all that I may or may not have any positions which I Disclose/Study here openly in same or any other style that is discussed here with ...
lets start --- paper trading
1st trade- positional - intraday OI action is overlooked!!!
It look like 7400 and even 7300 is good resistance and as directional play it better to buy 7200 PE @ +/- 60 ( or even 7300 PE) with a stop as 7400 CE OI shedding below 4M:thumb:
Money Management - using 2% of capital