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SanJeet Kumar

25 May, 8 tweets, 5 min read

https://twitter.com/sanjufunda/status/1307136977129660416

Risk Free Projection (RFP) Ver. 2.0
RFP basically a way where we can reduce/remove our losses from position but it can be only possible by time and profit running only. This is also subpart of Time-Warp option strategy. Lets explore in detail

https://twitter.com/sanjufunda/status/1307136977129660416

1. Locking Profit
When your long call/put position already in profit then simple buy hedge (convert to spread). this addon make spread formation where ur loss almost offset. advice only do when 50% premium gain and view still sideways to directional.

2. Moving Leg
When you have spread and already running profit. you can even move your any leg closure and this will make almost risk free. cons- theta of position reduced; so profit potential going down with this move.

3. Move Overall Position
Even we move overall profitable position with time and view still directional can be done. Objective just using past profit and trying to make some more value on direction side. Cons.- if remain sideways then no meaningful.

4. Reduce winning position size.
Its bring your delta more flat also we can hold position longer duration even after profit target hit to squeeze more theta. Mostly done if you are trading multiple set of lots.

5. Extra hedge on loss side with time.
Typically when ppl trade ratio kind of setup this one can be good. Note: trading with calendar sometimes payoff can be misleading as well.

Few simple tricks can do the magic here. Objective is understanding the view and why and when to do which one is more important. every setup hv some pros and cons- with respect of margin and profit potential increasing/decreasing. So choose wisely.

Few explain process also using more often in adjustment process as well. so read it carefully. There are so many more way like profitable strangle to Ironcondor/fly conversion etc. just increase your thinking ability here more important.
Thanks!

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More from @sanjufunda

SanJeet Kumar

@sanjufunda

15 May

LPT vs HPT
One thing commonly I see in new commers they focus a lot on high probability of trade, for that they try to be prefer big range for trading from start. As static edge of most occurance of winning with you no doubt.

Even I go sometimes HPT strategy but after learning a lot found this is also kind of myth to pick big range. So let's start and sharing my experience about it.
Both hv own pros and cons. Both good as well.

1. Low probability of trade: generally hv low probability of profit (POP), but as per risk reward (RR) very good trade but also enough credit to manage with various scenarios easily. Here edge is not statics but your trade management skills.

Read 9 tweets

SanJeet Kumar

@sanjufunda

19 Dec 20

If you are intraday trader or swing trader then there are some location where you should focus, these area price action most important as it's give high probability trades and good risk reward.
Most of Intraday system works around them even simple to complex.

You should always mark these zone in your chart.
1. Previous day High, Low and Close (PDH, PDL & PDC).
2. High and Low formation of current Day.
3. Major Swing High and Low.
4. Vwap Closing (or HVN high volume node of yesterday).
5. Big Round Number.
6. First hour Range
7. VWAP

1. Always stay sideways 2 bullish above PDC, if script sustain above PDH then Bullish. Basic Trend following system if price not stuck in Range. U can adopt simple system.
2. Current Day high/low mostly keep testing & form double top/bottom which either break with vol. Or fail.

Read 8 tweets

SanJeet Kumar

@sanjufunda

20 Nov 20

Setup and roll written already in first pic bottom.
Simple math 2x0.75 delta - 0.5delta = approx 1delta which is future delta. Payoff diagram posting below.

https://twitter.com/AakashN50/status/1329820646344310786?s=19

No effect of vega. Almost fraction.

https://twitter.com/AakashN50/status/1329820646344310786?s=19

For adjustment:
In profit side: Once in Profit u can lock profit of one long leg and position will convert risk free projection or sell otm call like covered call when view changing.
In loss side: if view unchanged roll down position or sell additional atm so its become spread.

Read 6 tweets

SanJeet Kumar

@sanjufunda

29 Sep 20

I hv seen ppl telling subjective about firsy 15 days buy Option last 15 days sell option etc.
This is actually not a proper way of doing.
Implied Volatility (IV)
Historical volatility (HV).

When IV less than HV go for buying option
When IV greater than HV go for selling

For iv observation keep tracking any Option related websites.

But my simple suggestions dont do it complex simply use spread. Its reduced theta and iv issues almost and also easy to adjust.
For adjustment see Long call repair article tree.

Now spread also hv 2 types either credit or debit one. If ur view sideways to Directional better go credit one. If u r looking purely directional then debit is best.
Note: otm credit hv big risk than Reward but otm debit spread hv low risk setup in Option Strategy.
#option

Read 6 tweets

SanJeet Kumar

@sanjufunda

28 Sep 20

Sometimes 40 can be low PE or sometimes it can be high PE. You cant say buy low PE and sell high PE. Some sector PE trade above 100 and few 20. Whenever u read without comparision actually u r doing incorrect.
IF PE high it means it will outperforming sector than costly Valuation

Mostly good companies keep trading in premium than actual valuation.

#investment

PE = Share price/EPS.
EPS is earning per share.
EPS should not negative otherwise company is loss making company.
If u filtering good stock then EPS should be positive and higher high of atleast last 5 yrs.

Read 7 tweets