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SanJeet Kumar 🐦 Profile picture
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14 Jul, 7 tweets, 2 min read
Case Study of Mine Mindtree Earning trade
1. Started with 1:3 Call ratio of 4k credit approx.
2. In dip volume missing so converted to 1:2 yesterday.
3. after morning gap when ORB trigger converted into butterfly.
4. Also took CSP sell OTM put. (optional)
Overall stop 3k holding.
without CSP.
Trade started with following things in mind, liquidity on put side poor unlike call side really good liquidity also looks good vol short trade but high beta stock and as per chart and data wise choose to sell R2.
As hv to trade only liquid and round strike choose such strike and one of my fav system ratio. Took 1:3 call ratio as IT looks weak from few days. But technical it's making low without good volume so as risk averse book one short leg and carried 1:2 almost flat credit.
Objective was will see further formation and earn from vol drop + skew. But underlying moved on tested side and got opportunity to convert trade with technical orb; so converted from ratio to butterfly.
Still very good position to hold and max loss after convertion only 5k, so anyone can hold with as per capital allocation and proper risk. For minimise loss someone can take additional short at untested side side.
This is whole thought process behind the trade.

If I m unable to manage on time then I will happy to carry trade with overall stop is best idea. Future can offset loss but no profit at all with block margin.

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More from @sanjufunda

SanJeet Kumar 🐦 Profile picture
25 May
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
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.
Read 8 tweets
SanJeet Kumar 🐦 Profile picture
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 🐦 Profile picture
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 🐦 Profile picture
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. ImageImage
No effect of vega. Almost fraction.
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 🐦 Profile picture
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 🐦 Profile picture
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

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