Thread by @niki_poojary

Few weeks ago @Ronak_Unadkat Sir conducted an exclusive session for me & @adityatodmal to explain how he trades.

He was kind enough to share all his trade strategies and was patient enough to answer our doubts.

Thought of making a 🧵for the benefit of the larger audience here.

@Ronak_Unadkat Sir's Option Selling Logic 🧵:
• Reversals in Intraday Option selling
• Strike Selection & SL
• Hedging for any Black Swan Event
• Positional Option selling
• Ratio Spreads
• How to manage the positions
• Capital mgmt

In collaboration with @AdityaTodmal

How to play reversals
• Always look at the chart as a starting point
• Spot the Swing low
• Sell Strikes 300-400 points below that swing low
• Buy a proper hedge

• Example on how to play reversals on Intraday
• Instead of the selling the support strike sell a bit far

• As the strike is far from the support you get enough cushion

• As soon as the SL is hit, you can exit the positions

• without your strike coming into ITM

• Greatest fear of any option seller is the Black Swan event

• Especially if that risk plays out overnight

• Importance of hedge over buying a margin

• Hedge is to protect your capital from any overnight adverse news/event - Black Swan

• How selling Rs. 45 option and buying a Rs. 15 option is a superior strategy

• than selling Rs. 30 option and buying a 5 Rs. Option or

• just selling a naked Rs. 30 option

• Hedging is an insurance premium paid to get a good nights sleep 😴

• And also to protect your capital from any extreme events 👹

• If hedging is too expensive for you, then here’s a hack

• Ratio spread strategy when moderately bullish & expecting a gap up

• Ratio spread strategy when strongly bullish & expecting a huge gap up

• Ratio spread strategy when neutral to slightly negative & expecting a flat to slight -ve opening

• Always important to book the buy legs first as theta works against in option buying

• Prefer to sell straddles in monthly over weekly as you have a huge range plus theta decay will work in your favour

• In weekly you will be caught adjusting due to gap up and gap down scenarios

• In case of gap down no need to worry on the spreads as they are in net credit or most likely at 0 cost

• Capital management is the key

• Keeping a buffer of 15-20% for any adjustments

• Always be aware of the total risk of your open positions

• Prefer a good nights sleep 😴 over watching SGX Nifty & Dow in the night 🥴📉📊

• Never jeopardize your capital & mental peace🤠

This was a 🧵on @Ronak_Unadkat Sir's option selling strategies curated & presented by

@AdityaTodmal

&

@niki_poojary

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Retweet the first tweet and help others find this 🧵

Happy learning 🤓 to everyone!