Discover and read the best of Twitter Threads about #options

Most recents (24)

With my last running options trade closed, now I can focus on some serious restructuring that I had started earlier this month.
First thing I am throwing out is BHEL.
It’s a wonderful stock that rains dividends.
But, it has too high a debt.
It’s a PSU with a large gestation period.
I don’t want to hold it in the current multi-year down trend.
Hindustan copper is not making sense.
I got the previous uptrend correctly. I got rewarded for it.
Global Copper prices are rising again. But stock is not rising.
My logic for that investment seems to be wrong.
So I am selling it.
Read 10 tweets
What should be the right qty per order to minimize costs. A thread with an example below. All data backed.

Problem statement - Short 100 lots (7500 qty) of Nifty Options. Should I push 100 lots or 10 lots or 1 lot per order?

#Options #Trading #Execution #Optimization

Assumptions -
- LTP of option = 100 (ATM)
- Slippages = Varies from ~0.1% for 1 lot to ~1.5% for 100 lots (reasoning below)
- Brokerage = 20/order (Zerodha)
- Other charges (STT etc.) = 1400 (rounded off from Zerodha brokerage calculator)

Slippage % logic and data -

Wrote a code that measures slippage% for all strikes at 1 min interval. Sample attached (see last column). So if prices are not moving fast (non-breakout strategies), it will be 0.7% on avg for 30-40 lots (single order)

Read 6 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
The #WE scandal surrounding Cnd. PM Justin Trudeau (& Finance Minister Bill Morneau) broke at the end of June. June 26 2020: "Trudeau accused of cronyism over giving #WE Charity a contract to run $912-million student #volunteer program".…
"#WE Day events for young people [] frequently feature Mr. Trudeau & his wife, Sophie Grégoire #Trudeau, as #keynote speakers. Ms. Grégoire Trudeau is a volunteer "#ambassador and ally” of the WE Well-being initiative."

Grégoire Trudeau's daughter, Ella-Grace, & her mother-in-law, Margaret #Trudeau – spoke at an indoor WE Day event in March 2020, attended by 13,000 people. Margaret Trudeau received $250k for 28 event appearances (since 2016) from sister co. #MetoWe.

Read 31 tweets
All categories of #mutualfunds (including ETFs) would be covered under #stampduty charges for units issued in demat & non-demat form. It will cover equity, derivatives & currency trades. Stamp Duty = Direct Tax levied by the govt. u/s 3 of Indian Stamp Act, 1899. @AmarUjalaNews
#StampDuty charges:

Equity (delivery) - 0.015% or ₹1,500 per crs on buy-side

#Equity (intra-day) - 0.003% or ₹300 per crs

#Futures (equity & #commodity) - 0.002% or ₹200 per crs

#Options (equity & commodity) - 0.003% or ₹300 per crs

#Currency - 0.001% or ₹10 per crs
- The #stampduty will also be applicable on #AlternativeInvestmentFunds (AIFs)

- Impact is more on the short term #investments by the #investors

- No stamp duty on #redemption of #mutualfund units.

- Impact at #portfolio level too i.e when fund manager executes transaction.
Read 7 tweets
I receive many questions regarding various financial dealings & their Islamic Rulings especially in light of my Master's connection to Liquidity Management & my PhD's connection to Risk management. I will answer these questions in this thread IA. #invest #money #Islam #Banking
#Options- Impermissible- as any transaction with ambiguous outcomes due to betting on the likelihood of a future event, and considered to be a 'zero-sum' transaction, in which one party can only financially benefit from the trade; are impermissible in Islam.
In terms of a zero-sum transaction, the above tweet should read: "in which one party can only financially benefit from the trade at the expense of the counter-party".
Read 12 tweets
#Day #Trading #Options

#Basic Concept - options day trading focuses only on the underlying #mathematics. It does not rely on any #financial predictions, company results, or market direction.
A #realistic approach is to take advantage of occasional pricing inefficiencies that arise in the #options market.
These #distortions can be related to #earnings announcements, expiry week, weekend #theta decay, intraday implied #volatility swings, differences between overnight and #intraday volatility, or news and #rumors.
Read 22 tweets
What makes CFDs so popular amongst retail traders? What makes them so difference from the other trading options such financial spread betting, options, futures, or conventional share trading?
In this thread, we cover some differences.
#cfdtrading Image
CFDs vs Options
One of the main advantages of options (not binary options) is that unlike CFDs, they offer the prospect of receiving the ownership of the underlying instrument at a specified price giving you all the rights of shareholders.
Contracts For Difference vs Spread Betting
By far the greatest advantage of financial spread betting over CFDs is the tax treatment as spread trading involves no CGT on the profits you make from trading the financial markets. Both options are stamp duty exempt.
Read 6 tweets
Thread on calendar spread options trading.

Getting started with calendars, watch all the videos from this link to understand the basics…

RT if you find useful.
#Trading #Options #Calendar
When to initiate (1/2)
- Low IV in near expiry (<12 India VIX) like Dec/Jan '20
- Event in next expiry like budget, elections etc. (Apr/May '19)
- High IV difference in near/far expiries. More the IV difference between expiries the better. More details below.
When to initiate (2/2)
- High options skew - If puts are priced much higher than calls, then sell puts in near and buy in next expiry to benefit from mean reversion of the skew. This is one sided calendar spread
Read 14 tweets
Thread -
What's T+0 line?

In short, the breakeven at expiry for 2 strategies might be same but 1 can bleed far more with the movement in underlying.

Flatter T+0 line is better. It indicates lower MTM losses on large movements and gives time to adjust.

#Options #Trading
1. Selling 8800PE-9500CE strangle (4 lots)
Breakeven - ~8700/9600.

The dotted line shows payoff on expiry eod. Blue line is the T+0 line.

At 8835 on 18th May eod -> Loss of 1.2k Image
2. Short strangle 8800PE/9500CE (4lots) and long strangle 8900PE/9400CE (1lot)

Breakeven - ~8700/9600

At 8835 on 18th May eod -> Loss of 0.2k Image
Read 4 tweets
Years ago, my boss taught me something important about choice.
We were recruiting for an open position at the office. The role was urgent and we needed to fill it ASAP. A contract depended on it. So, we hired a recruitment agency and the shortlisted candidates finally got to the interview stage.
The interview was a disappointment. The candidates barely made the cut and we were worried about the looming deadline for filling the position. That day, my boss said something that stuck.
Read 6 tweets
#Learning #Options #Greeks
A layman explanation of option Greeks
a) Delta :
i) If delta is +0.6, it means if underlying changes by 1 unit the option changes by +0.6 units.
ii) Delta of long Call is positive (0 to 1) and long put is negative (-1 to 0)
iii) Delta of ATM call option is 0.5, ITM is between 0.5 to 1 and OTM is 0 to 0.5. ( -ve for puts)

b) Gamma :
i) If gamma is 0.10, it means if underlying changes by one unit the delta changes by 0.10 units .
ii) Gamma of long options is always positive and gamma....
of short options are always -ve irrespective of call or put.
c) Theta :
I) Theta of long option is always negative and short option is always positive.
ii) If theta is -4, it means, the option price decays by 4/252 = 0.016 per day.
iii) Theta of put is always higher than
Read 6 tweets
52 trading weeks a year:

If you make average
25 ES pts=$1250 /week=$65k
30 ES pts=$1500 /week=$78k
35 ES pts=$1750 /week=91k
40 ES pts=$2000 /week=104k

You do the math in this thread for weekly real-time trades
shared since Feb12
+many before

#es_f #options #futures
3 days and well exceeded plan.
Each option play 5-7 ES point so translated to total equivalent ES points is 50-60 ES point = $2500-$3000.

#es_f #options #futures
Only shared one day this week while on break and wel exceeded plan.

#es_f #options #futures
Read 41 tweets

Options Mechanics & Greeks

A free #webinar on how #options work & how to make money with them.

Also, understand the buzz words thrown around by a lot of twitter traders so you know when they're full of #shit.…
No registration required. Link will be shared 12 hours before the webinar starting time. Cheers!
For details of the webinar, click on the "photo" to open the canva presentation. Sorry for not making this clear in the original post.
Read 3 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
#MetaphysicsOfQuality iⁿtrade:

• Fixed #RiskManagement is Percentage #StopLoss.
• Such a StopLoss is -100% of the initial MarginLevel Percentage.
• So #netting may appear at -50% of MarginLevel Percentage.
• Any #LEVERAGE just offers #DrawDown
kind of limited LOSS.
• A #lever on #fulcrum is
better than leverage!
• My #BreadthScreener™ is
• The #BreadthScreener™ is a #non_forecasting,
#trading #system
#ConstantRisk #FixedRisk #Management SURVIVES!
• Since #practice precedes #theory,
#RiskManagement precedes #trading setups;
• Since theory doesn't make difference between theory & practice,
— Setups' forecasting don't forecast fail;
• Since practice makes the difference,
#FixedRisk precedes #TradingStrategy setups
Read 15 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
#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
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
$SPY selling calls from $283.35
$SPY selling add backs 50%+
$SPY exit 2, try for HOD
Read 55 tweets
$SPY $277.15 11am already locking gains as it attempts to break out of this chop 🌱
$SPY journal everything.

What price did we buy yesterday?

Do you think it holds as resistance today?

Or was that a sick dip buy called out in advance with time for you to take the second chance entry and lock in faster gains?

We never know.

Have a plan ✌️
$SPY auto sold into $278 #tradernap
Read 20 tweets appears to have lost all client money on short options strategies on energy markets.

Watch the full video , I have been there :(

James Cordier to 290 clients here on YouTube.

#shortvol #options #black_swan
Option selling even by the smartest guys are fraught with danger if done without protection . When a black swan hits , you will have no chance to firefight

Not only you lose the full money in your account , you get called for more .
Why ?

Because options selling comes with UNLIMITED LOSS if you are wrong
Read 5 tweets

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