Discover and read the best of Twitter Threads about #OptionsTrading

Most recents (24)

With #NakedShorting trending today, it may be useful to brush up on the mechanics of how #shorts work.

First, a refresher on how #ShortInterest can grow to extraordinarily high levels, even greater than the float. And yes, it's legal (1/)…
I watched @MelissaLeeCNBC's discussion with @timseymour and @GuyAdami on @CNBCFastMoney. Blurting "naked short" is hardly evidence that a conspiracy of #NakedShorting exists. It's illegal, and as a result most firms go to great lengths to prohibit their customers from it (2/)
Obviously because something is illegal and discouraged doesn't mean that it isn't going on somewhere. I can't prove that #NakedShorting isn't going on. But I suspect that some are confusing naked short sales (illegal) with naked options writing (legal but risky) (3/)
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$AMC #GME #TSLA #OCGN alright folks. Good morning everyone I hope and trust you all are well. Before I pass on the Ortex info for this morning I’d like to say this - remember why you are in this journey as the road ahead is not easy find the strength n courage you need to push
Forward to our goal. We are all onto something big. Oh I almost forgot... be careful of folks interpreting rules that are not researched and vetted thoroughly. Lol ok on to more important news pay attention to AMC and GME over next few days I have a feeling we are gearing up for
Another show down. Good or bad just know I’m on the front lines with you and I’m rooting for us all to win. Have a blessed and beautiful morning. Ortex data is below. #AMC #GME #TSLA #OCGN #stonks #mooning #OptionsTrading oh and just so you know we’ve had a crap ton of weird
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Look at change in OI, including highest change in OI both sides to see where new support/ resistance levels are being formed #nifty50 #NIFTYFUTURE #Nifty #daytrading #Sensex #NSE #tradingtips #banknifty #StockMarket #StocksToWatch #investing #NSE #stocks #StocksToBuy #forex
Read 9 tweets
#OptionsTrading thread that may save you!

Now a days we started seeing MTM for Crs & some people call it fake, but I see them as real & possible BUT its not as simple as they show it.

Simple Reason:
When asked about open risk & position sizing no one answered.

1/n Image
A friend clearly putted it saying "lot is unknown" as no one will share their pains & secrets on #socialmedia

Which lead to do some simple calculations that how things really look while writing #options using different styles.

2/n Image
Ac size 1cr
Naked positional option writing
1% risk
Qty arrived keeping total premium received as stoploss
means we are ready to lose 1rs to gain 1rs to start

Out of expiry days these guys write 25 to 30 rs options. Next day if those open as ATM then the %hit on ac👇

3/n Image
Read 9 tweets
I have a pretty good record of placing highly profitable trades. The market is dominated by HFT and algos that both start and extinguish trends. I'm successful bc I have the same algos so I have a better idea of when trends are starting and when they're weakening.

I place mostly swing trades with naked calls in bull markets, that typically take a few days to a few weeks to play out. While the algorithms show pretty accurately when a stock is peaking and getting ready to correct...

in this kind of market the bulls can keep pushing the price higher than anyone expects, so its very difficult to time tops -- and much of the time the correction is smaller and slower than expected, which makes it difficult to profit with puts.

Read 9 tweets
Purpose is to catch trending moves once it is confirmed.
Plot the most important support and resistance on the chart such that violating those levels will lead to a trending move in all likelihood.
#OptionsTrading #markets
2. Eg. Banknifty is at 36000. Support at 35500 and Resistance at 36500.

Place buy orders in the system such that 35500PE is bought if 35500 is violated.
36500CE is bought if 36500 is breached.

#OptionsTrading #markets
3. What should be the limit price order for the two contracts (35500PE, 36500CE)?

Ideally, the price of an ATM contract should be same keeping everything else constant ( Days to expiry, volatility, interest rates etc.)
#OptionsTrading #markets
Read 11 tweets
A fruit seller sells fruits for his living, a garment seller sells only garments, tailor stitches cloths, cobbler repairs shoes, a singer sings...and this list goes on where these people hardly switch to another area for their living, no matter what the (1/n)
circumstances are, because they know their skills and area of expertise. Only stock market is a place where retail trader does every single possible trade as long as capital is there in his account. Be it option buying, option selling, future trading, equity, currency, (2/n)
commodity, dabba trading, satta and what not!!!.
Dear retail folks , my humble request, first write down on a paper precisely what you want to get expertise in. Dont put your feets on more than one boat. and believe me it works. Write down to the pin point precision what (3/n)
Read 7 tweets
A detailed thread on #OptionsTrading (buying)
An #option buyer must have 4 things on his fingertip before punching the trade:
1. When to buy: time and setup
2. What to buy: strike price and expiry selection
3. Where to buy: option price level
4. How much to buy: quantity
1:When to buy: time and setup
(a) time: it is believed that fresh trade should be initiated after waiting for some reasonable amount of time that may vary from 15 min to 1 hour (from opening the mkt) depending upon the experience and skills.
I wait at least 30-35 minutes (2/n)
(b) setup: there is no holy grail setup, and must not be. But in my journey of 11 years of options buying I could find a reasonable logic : If i want to buy a #nifty call option , #nifty spot should be above 14 ema and 21 ema on 5,15 and 30 minutes. Also 14ema>21ema (3/n)
Read 8 tweets

As Nifty crashed today VIX shot up by almost 25% intraday I would like to share some of my views.

1) In the year 2020 Vix shot up 20+ a few times which resulted in a downward fall for the coming few days and weeks.

#nifty50 #Nifty #NIFTYFUTURE #OptionsTrading

(1/6) Image
2) First time it happened was on 24th Feb.

3) As you can see just after few days VIX again shot up on 28th Feb and again on the following days which resulted in the March Crash.

4) Here is the Nifty Chart to see what happened on 24th Feb.

#nifty50 #Nifty #NIFTYFUTURE
(2/6) Image
5) As a non-directional trader trading only on Iron Condors my crash started from 24th February itself. Hence I would book whatever positions I have even if in loss and wait for a few weeks for VIX to cool down.

6) Sudden upmove in VIX again happened on 4th May.


(3/6) Image
Read 6 tweets
1."Conditional Buy"
Aim is to capture theta on a day to day basis by selling straddles/strangles.
Instead of putting stops on the sold arms, close contracts are bought to convert naked arms into bull/bear debit spreads if the index is breaking away from a range.
2. Sharing my strategy as I execute it. At around 9:30 AM, I would assess probable demand and supply zones on #banknifty chart. Breach of these zones would lead to quick price movements, which may or may not result in a trend.
3. Now I choose the nearest 500 strike to write a strangle. Eg. #Banknifty closed at 29631 on Friday, 27th Nov. So I would be writing 29000PE and 30000CE Weekly contracts.
a. 29000 PE premium: 184
b. 30000 CE premium: 246
c. Total Premium collected per lot : 430
Read 19 tweets
How to manage straddles :

1) As bnf open was within yesterday range created a 29000 straddle at around 9:30 am

29000 PE sold at 528 and
29000 CE sold at 453

#trading #OptionsTrading
2) Instead of keeping SL on sold legs. I keep SL on otm options in the system

SL was on 28000 PE at 220 (day high)
SL was on 30000 CE at 165 (day high)
3) At 10:15 am, Bnf started to trend down and 28000 PE was bought at 220 and I immediately bought 30000 CE at 110
Read 7 tweets
Thread :

We are regsitered as sub brokers with IIFL and Angel Broking & now planning to grow the sub broking business.

Looking to crowd source ideas/suggestions on the same from you guys


#trading #ideas #OptionsTrading
2) Instead of sending recommendations(like traditional brokers) .. plan is to help traders learn & let them independently take trading decisions.

-Create a telegram channel and share ideas & explain trades with logic
3) Plan is to help traders learn about
-options trading,
-long term investing
-intraday momentum trading
-event trading
-expiry trading and let them decide what suits them

Don’t charge any advisory fee but earn a share from their trades as brokerage
Read 4 tweets
Contracts For Difference is in essense a simple trading option which stands on 3 pillars: leverage, wide range of markets, and simplicity.
It's worth starting with the basics to understand CFDs a bit better as there's a lot of confusion.
#cfds… Image
1. CFDs are different. Seems like there's a lot of confusion going on with CFD trading, particularly when it comes to CFDs vs Options (we're not talking about binary options as those are different). Options and CFDs are very different.
2. Range of markets.
You can trade CFDs almost on any financial market you can imagine but the range of markets very a great deal between brokers so make sure your broker offers the markets you're after.
Read 5 tweets
Q. What is something that only someone who has been in the stock market for 10-15 years would know?

That profitability comes not from the trading system or some golden indicator or technical analysis of some kind.

#Nifty #BankNifty #OptionsTrading
+ Image
@rohit_katwal Profitability is a product of probabilities and proper Risk and Money Management.

Suppose you have ₹100,000/- as trading capital.

Your winning probability is 60% and risk-reward is 1:3.
@rohit_katwal Per trade, you deploy 20% of your capital with 1:3 risk-reward potential. You risk ₹1000 or you profit ₹3000/-.

If you trade it with discipline, over 10 trades you will lose ₹4000/- and win ₹12000/-.
Read 4 tweets

How I managed my short strangles today and ended up in profit.

1) Overnight I had carried

-50 lots 24600 PE sold at 225
-50 lots 25000 CE sold at 170

As I had a bullish view for overnight and was expecting 24600 to hold.

#trading #OptionsTrading
2) In the morning around 9:16 am sold additional

50 lots 24600 CE at 277 &
50 lots 24000 PE at 98
(Counter bearish strangle)

as bnf was down at 9:15 and to save my 24600 PE(overnight sell)
3.But in next 2 candles bnf spiked to 24800
so I sold additional
50 lots of 24200 PE at 102

and kept sell stoploss order on 50 lots of 25000 CE at 135 which got triggered after 5 mins😖

Till now Bnf was very volatile with no clear range and my mtm was in red.
Read 9 tweets
#TradingQNA #Nifty #BankNifty #OptionsTrading
Q. What are some basic points that we must know before going for options trading?
Here are few pointers before you start option trading: -
1. Option Trading is a game of probabilities and money management.
@rohit_katwal 2. There is no such thing as unlimited profit and unlimited risk in option trading. Unlimited profit is same as hitting a lottery and we all know what happens to lottery buyers. There is no unlimited risk if you know what you are doing.
@rohit_katwal 3. Buy Calls when bullish. Sell Calls when bearish.
4. Buy Puts when bearish. Sell puts when bullish.
5. Either put a SL to your trade or do a 100% hedge for risk-management.
6. Hedging is used to save your self from potential losses. Learn it.
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I welcome all the first time visitors to my profile. I am posting some tweets and information which you may found useful.

My name is Rohit Katwal and I am the founder of Katwal Asset Management.

Kindly Retweet so I can reach to more fellow traders and connect with them.

You can find more information about what we do on my blog cum website

I keep my trading journal live for fellow traders to access. If some tweet about my trade is missing, it will surely be updated in my Live Journal here
Whenever I close a week, trades are moved to past journal which can be accessed through the link…

My Telegram Channel can be accessed through: t/me/rkatwaltradingupdates
Read 14 tweets
Thread on #OptionBasics for #Nifty #BankNifty or #Stocks for beginners

To understand options, three concepts are required:
1. Intrinsic / Extrinsic value
2. Time / Theta Decay
3. Implied Volatility

Option Value = Intrinsic + Extrinsic (Value)
@rohit_katwal Intrinsic Value - Value of Option if it were exercised today at CMP.
Extrinsic Value - Total Value of time in the option.

ATM and OTM options are 100% extrinsic value. ITM options have more intrinsic and less extrinsic value.
@rohit_katwal ITM Options: Intrinsic Value = Price of Underlying Asset -
Strike Price
For eg.
Nifty is at 11,416. 11400 CE of 29 Oct 2020 is at 224.40/-.
Intrinsic Value is = 11416-11400 = 16
Extrinsic Value is = 224.40-16 = 208.40.

208.40 is time value.
Read 15 tweets
3️⃣ Options Trading Books recommended by @itjegan

#OptionsTrading #books

Thread 🧵 Image
1. Options Strategies NSE Book

Available for free in CapitalZone…
2. NISM Series 8 - Equity Derivatives Certification Exam.

Enroll for this exam(₹1800) and you will get workbook for free…
Read 5 tweets
For weekly, only into one Put Spread right now. For 11100 PE and 10800 PE for margin reduction. Hope it goes to 0. Otherwise will manage.

For next week created an Iron Fly. 11200 CE PE Sold. 11600 CE, 10800 PE Bought.

This is how Iron Butterfly is performing. #Nifty #OptionsTrading…
Read 3 tweets
50% of my trading profit comes through Calendar Spreads. Ask me questions you have regarding calendar spreads and I will try to clarify best unto my knowledge.

Retweet for maximum participation. 😊
For executing trades, I have 4 parameters:
1. Broad view of the market
2. Direction Analysis
3. Strike Distance based on above 2 and expected target. I try to keep premium same in current and next expiry. 1 will go to 0, other will not.
4. Worst case thinking before trade.
Closing tweet for the thread is scheduled at 11:00 am, Sunday via youtube. Stay Tuned.
Read 5 tweets
Thread coming on #OptionsTrading
A way to do #IronButterfly on #Nifty #Nifty50

Iron Butterfly is a sideways strategy. It is not to be used in a trending market. It needs some knowledge of Technical Analysis, position sizing and risk management for worst case scenario. 1/n
Trend on #Nifty has to be sideways. I check it via Alligator. Green Circle is the place I went bullish. Blue is my signal for sideways market. It is not easy to follow alligator as whipsaws to opposite side can be intense so one needs to be Iron Hedged. 2/n
When Lips of Alligator are pierced by price on daily charts, it signified that existing trend is exhausting or coming to an end. Underlying like #Nifty does not go V-up or n-down and they follow accumulation distribution phase unless there is a trigger for eg. #Covid19 3/n
Read 11 tweets
My positions right now to cover previous week loss:

Iron Fly
+11750 CE, -11500 CE, -11500 PE, +11250 PE

Bull Put Spread
-11300 PE, +11000 PE

More than that I cannot do any thing else in current week as there is no premium.
With Less premium I will be taking high risk and playing a market makers game of hitting the Stoploss. So rather than risking it here, I have created an Iron Fly for next week.

10 September 2020
+12000 CE, -11500 CE, -11500 PE, +11000 PE. Total Credit of 250 points. 2/3
Now if i get a decay of 50 also, then I am good. But its better than low premium and high volatility environment. 3/3 #Nifty #BankNifty #OptionsTrading…
Read 3 tweets
#Nifty Trading plan for tomorrow is simple. Holding a bull put spread of -11500/+11150 PE spread and -11550/+11400PE next week spread. Eyes on for 11700CE/11600PE with #IntradayExplosion. If buy on 11700CE then no action. If buy on 11600PE then will cover 11500/11150PE Spread 1/2
and will add 11700/12000 CE Spread with same quantity. Will also add -11550CE/+11700CE Next week spread. #OptionsTrading
If buy on 11700CE came, then will probably look for position on #BankNifty too.
Last week was I complacent and carried forward losses. This week I was vigilant. So got saved. Here is my initial thought process for today.

1. At Gap Up at 11750, I created Iron Calendar. Spread of 11600, 11750, 11900. At 11680, I covered the losing put part at minor loss.1/n
Read 7 tweets

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