Discover and read the best of Twitter Threads about #OptionsTrading

Most recents (24)

What happened to Holy Grail Trade in March 2020 crash?
Biggest Blackswan crash vs Naked Put. This is the biggest ques. in the mind of every Option seller as well as buyer. Here are some answers that will amaze you. #banknifty #nifty50 #expiry #OptionsTrading
HolyGrail strategy use data of last 10yrs to conclude that crash below certain level in #Nifty50 is extremely rare but a continuous put selling (more then 10% away) can give consistent earning of 24-30% per year. Stop Loss says to exit if PE sold go ITM by EOD.
HolyGrail strategy compete with Stock Portfolios, Mutual funds & FD like longterm investment, where you spend negligible time managing the position. It should not be compared with regular Option strategies with regular adjustments, though it claim to beat them all in long run.
Read 10 tweets
#Traders path #Futures & #Options

1: Understanding the game

Trading is not much different from playing poker game or betting on various other things.

It’s just a structured game where rules are not made by anyone, but needs to be followed by everyone in game.
Understanding those rules and adjusting yourself is a continuous process which will never end. As #SEBI would keep on changing rules.

The important thing to understand is any thing in life if we want to succeed we need patience and dedication.
A 2 hour webinar or 2 day course can’t teach you about #CapitalMarkets or #Trading it’s impossible.

Personally i feel have around 40-50% knowledge about capital markets after more than 12years of trading experience.
Read 15 tweets
1. #Banknifty Strategy : Here, I have created a weekly strategy which is high on time decay and has negative vega. Given vega has been falling off significantly in the past few days. Hoping the trend to continue. Bias is positive in weekly.
2. As the market rallied hard last week and used last hours of Thursday and whole of Friday to consolidate without giving up crucial zone of 21800 completely,there is a good likelihood of it attempting the recent highs again in the coming week.Thats an assumption I am working on.
3. Hence the weekly has a positive delta. However, if the rally has to resume, the fall in volatility/Vega may continue. Thats why it makes more sense to write more, buy less. Hence theta is positive. Gamma would need to be tackled if there is a fresh breakout of sorts.
Read 9 tweets
Decent Week. Decent Gains. Sharing my #Banknifty strategy for learning purpose. The below positions and P&L are only for reference. Actual trades were done in my account, but would not share actual P&L Screenshots here.
2. What you see here is a Double Calendar Spread modified to follow trend of the market. If the market is non-trending and stays within 0.5 sigma (standard deviation), it gains due to positive #theta or time-decay. If the market is trending on one side, #gamma gets active.
3. I should have captured initial #Greek positions also, that would have given a good perspective on how the strategy was planned. Will do it next time.
Read 9 tweets
Basic step for adjustment who came new to option Trading and position going to against or in favor how to reduce risk and increase probably of profit ur position. Its powerful if u understand this only no one stop u to become profitable option trader. #OptionsTrading Image
Start from any position not like long call only. Vertical, ratio or fly. + In favor how to adjust - against and how to protect. Not given example bcoz u need homework and understand with payoff plot. So do ur homework stay healthy any doubt please ping me.
Read 3 tweets
Day wise Weekly Index Option Strategies

1. Best day for option selling
Wednesday - This is the day where max option premium decay happens especially in afternoon session.
Trade initiated after the initial move (usually by around 10) gives the max result.
2. Worst day for option selling
Friday. On this day usually IV are very high and continue to be higher. Volatility will be high and you are entering weekend holidays.
Keep trades low on this day.
3. Best day for options buying
Thursday mid noon before 12.30
IV decay almost done. Premiums are low. And most important by that time you will get a trend of that expiry.
Do not buy deep out of money options. Usually #BankNifty options in 80-120 range ideal.
Read 8 tweets
#BANKNIFTYFUTURE OAIR and likely to chop in yesterday's range. HVN from yesterday would provide supply/resistance & prices been rejected from ySpike extension. For any upside action, buyers need to get acceptance above 29400-29500 zone #banknifty #marketprofile
#BANKNIFTYFUTURE Been getting questions on how I pick trade locations.OAIR suggested to avoid open trade & wait for opportunity.First opportunity emerged when A period rejected from ySpike & entry right at B period high when prices came back to test. #OneGoodTrade #OptionsTrading
#BANKNIFTYFUTURE Acceptance vs Rejection, is an important concept along with how you manage your trade and emotions post you punch in the trade. Will put a blog out later today on how I generally do this. #banknifty
Read 4 tweets
In order to build #OptionsTrading strategy to make use of #budget volatility, we need to find out what has happened in the previous budget sessions. I did an extensive historical data analysis for the period 2008 to 2019, to find what kind of #TradingStrategy one can use
This is what happened during the intraday time frame on the #Budgetday for last 10 years of budget sessions.
Read 23 tweets
#Straddles vs #Strangles ( Sell only )

These are the most common #Options strategies when one would start with #OptionsTrading.

Let’s understand from a broader perspective what’s the difference between these two.
Would not like to discuss the construction difference between them if you don’t know stop trading #options


You get higher premium so pnl would be higher compared to #strangles

But from where are you getting higher premiums is that your selling 0.5 #delta.
So probability of one going wrong is always 50% so to simply put one side is goin to get stuck in a #straddle but then market tends to #flucuate a lot so there is always the case of #meanreversion if you have selected the #strike rightly.
Read 14 tweets
#Options vs #Futures

Although both are #derivatives, Futures and Options are entirely different in terms of their potential #risk and #return , #leverage and how they work.

How different are futures and options?
#Rights vs #Obligations

In #Futures Trading, both the buyer & the seller are #obligated to settle the contracts on or before expiry ie cover shorts or longs or rollover to next contract, regardless of how the underlying asset price moves.
With #Options the buyer has the #Right, but not the #Obligation, to buy (call option) or sell (put option) on underlying asset. The option seller is #passive and must comply with whatever the option buyer does.
Read 13 tweets
#Option #Greeks Simplified

#Options are definitely more complicated than equity or futures.

Their prices don’t just go up and down.

They also fluctuate based on things like #time, #implied #volatility and #underlying stock movements.
#Options #Greeks Are Simply Mathematical Shortforms

Most of you would remember from school that mathematical formulas sometimes were #Greek letters like Pi and #Delta. The same is true for options.

Don’t let them overwhelm you or scare you.
They’re simply #mathematical words to explain some very basic principles.

#Greeks Describe the Behavior of #Individual #Options

Each #greek can help predict how it will behave under different circumstances and how options prices would change.
Read 22 tweets
#ITM Vs #OTM #Options Which to #BUY?

When selecting the right #option to #buy, a #trader has several choices to make. One is whether to purchase an in-the-money (ITM) or out-of-the-money (OTM) option.
While the goal for "#vanilla" #buyers is to have the option be in the money at expiration, the selected option depends on the amount the trader wants to spend and their risk tolerance, as well as their specific expectations for the underlying stock.

Before delving into the pros and cons of each, let's look at what it means to be itm or otm.
A #call is ITM when the underlying stock is trading above the strike price.
Conversely it is OTM when the underlying stock is trading below the strike price
Read 16 tweets
Created Multi leg Chicken Iron Condor in Nifty On Nov Monthly Expiry

Buy 12300 CE X 30
Sell 11900 CE X 10
Sell 11800 CE X 10
Sell 11700 CE X 10
Sell 11400 PE X 10
Sell 11300 PE X 10
Sell 11200 PE X 10
Buy 10700 PE X 30

BE is 11100-12000. will adjust later

Exited 11300 PE, 11200 PE, 11700 CE
Sold 11500 PE, 11600 PE, 12000 CE

Here is the new pay-off. Right now the whole strategy is in the net loss of 10K (50K capital)

Break even is right now from 11300 - 12100.

will adjust more if needed.

Exited 11500 PE and Sold 11800 PE.
Exited 10700 PE (Bought one) monthly and bought weekly options at 11400

Here is the new pay-off. It looks like Iron-Fly at 11800 now.

Break-even is from 11472 to 12128

Read 23 tweets
#OptionSymposium 4-5 Jan, 2020 at Bombay Stock Exchange. @quantsappsocial announces OptionSymposium 2.0. Option Symposium was the first event ever in the country to bring together a large option focused trading community. After the success of the last event where Traders, (1/n)
Prop Books, Analysts, Media Anchors, Brokers, Family offices, Advisory firms etc. came together in large numbers to share their knowledge & wisdom, we are again encouraged to bring together the version 2.0 with all our learning’s in-built. (2/n)
#ThoughtTheme it’s our responsibility to give our best in getting the right knowledge & after doing some genuine hard work & meeting 80-90 #OptionTrading giants Nationally / Internationally, we have shortlisted speakers where our team itself would love to sit in audience (3/n)
Read 7 tweets
#Election2019 result to announce soon. A quick #OptionBacktesting of past elections throws some interesting data

Result Date : 13-May-04,16-May-09,16-May-14
Entry Date: 2 days prior to result
Exit Date: 1 day after result
Lot size: 75

#OptionsTrading (1/9)
Strategy #1 Long Straddle : Buying ATM Call and Put
Total PNL : Profit 18559

@shubham_quant @BHVN153 @Tinagadodia

#Optionstrategies #DataAnalytics ...(2/9)
Strategy #2 Long Strangle: Buying 1st OTM Call and Put
Total PnL: Profit Rs.16838
#OptionsTrading #OptionStrategies #OptionBacktesting ...(3/9)
Read 9 tweets
I have received lot of queries on #OptionsTrading.
Specially on the trades that I take on expiry day where option prices move 10 times in last one hour. Let me tell you that this happens only 1 in 3-4 weeks.
Few pointers that I look at.
Expiry day trading in options few tips. I hope it will help others.
So what I look for is following 3 things.
1. Open Interest Build Up on expiry day
2. Trend of the market from start of the day
3. how to trade
3. Time when breakout or breakdown of critical levels happen
#OpenInterest Build Up
#Optionwriting has become very popular & there is heightened activity of the same on expiry day. This is clearly visible through OI buildup in specific strikes where OI goes up significantly & price goes down. Now these strikes become our boundaries
Read 10 tweets
Sharing some thoughts on beginners who start trading short options.

Previously shared this on a closed WhatsApp group of friends.


Short option structures like Straddles and strangles have a high win rate.

A 15 delta Short strangle will end up with typically higher than 85% of trader's as winners.

This is the biggest attraction for traders new to #optionstrading

This is also how a lot of options trading trainers sell to their prospective clients on the effectiveness of their #optionstrading systems.

But this high win rate comes at a cost.

Read 11 tweets
As simply as this.

Using options over Futures doesn't allow you any additional edge in your directional Trade.

The Market doesn't pay for choice of traded instrument when the trader idea is Directional move of underlying.

The only difference comes from government mandated costs for the different instruments.

Unless you are trading extrinsic Value, which in essence is a trade now not on direction but on volatility, there is no difference between using an option or future.

Read 14 tweets
2018 Year in Review - The Personal Edition.

Met some fantastic traders and thought leaders.

You know who you are.


Grew the #OptionsTrading book despite some tough months.

February and November were the best.

September the worst.


Got on stage to share some ideas on how I approach #OptionsTrading not once but twice.

Thanks, @Definedge and @quantsappsocial.


Read 8 tweets
BankNifty – RBI Policy Week of 06Dec…
Concepts of "probability of touch" are used in trades like the one mentioned in this post.

When touch happens, there is no need to stay in the trade anymore.

The $BankNifty Hive of Flies taken off today with a touch of spot to 26650
Usually no need to look for re-entries, but with the spike up to 26750, took a re-entry into a lower #HiveOfFlies trade on $BankNifty for #RBIPolicy day.

Payoff on 05-Dec.

Nothing to do on these unless 26850 is breached tomorrow before event.

Read 4 tweets
SPOT 24959.7
2018-10-29 15:30:30
SPOT 24922.4
2018-10-30 09:18:19
SPOT 25049.8
2018-10-30 09:23:19
Read 228 tweets
SPOT 25066.4
2018-10-19 09:18:49
SPOT 25056.4
2018-10-19 09:22:19
SPOT 25231.2
2018-10-19 09:28:19
Read 77 tweets
#MARUTI #MARUTI_EXPIRY_25OCT2018 #EXPIRY_25OCT2018 #OptionsTrading
SPOT 7166.0
2018-10-15 15:30:30
#MARUTI #MARUTI_EXPIRY_25OCT2018 #EXPIRY_25OCT2018 #OptionsTrading
SPOT 7137.6
2018-10-16 15:30:30
#MARUTI #MARUTI_EXPIRY_25OCT2018 #EXPIRY_25OCT2018 #OptionsTrading
SPOT 6901.0
2018-10-17 15:30:30
Read 4 tweets
#INFY #INFY_EXPIRY_25OCT2018 #EXPIRY_25OCT2018 #OptionsTrading
SPOT 703.5
2018-10-15 15:30:30
#INFY #INFY_EXPIRY_25OCT2018 #EXPIRY_25OCT2018 #OptionsTrading
SPOT 692.0
2018-10-16 15:30:30
#INFY #INFY_EXPIRY_25OCT2018 #EXPIRY_25OCT2018 #OptionsTrading
SPOT 705.5
2018-10-17 15:30:30
Read 4 tweets

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