Calendar don't work like normal straddle or vega negative. Calendar means shorting high iv and long low iv set-up if trading atm or little offset classic calendar.
Even today example, once fall create difference, then again fall make almost 5 pts iv difference as well delta mgmt avg. Eod gained quick 1% on margin within 2 hrs.
Also few experience observation. Weekly iv spike normally giveup early than monthly. Payoff tool in India generally don't hv such detailed option to plot different iv for calendar, they believe if iv gain then gain for both expiry same.
Even delta bother little bit; both option ITM still gain good.
Leverage Thread 🧵
Leverage can make or break people.
Specially when we talk about derivative product which already leverage. If not aware about effect and side-effects then definitely.
Inspired by Wayne (Famous Portfolio and strategic builder).
As we know derivative product approx 6x leverage which means for 6L we normally pay 1L for taking it delivery in account. What if we take without leverage, less leverage risk exposure or even 10x leverage. Any system robustness checked by its drawdown properties.
When we can no leverage or 2x (small aggressive) most probable chance of survival in market higher, when we go by 5x-10x exposure which can easily kill in few drawdown phase, even completely.
Warren Buffett also emphasized so many times about leverage and risk.
#derivatives#nse
Data analysis not an easy task as it's look like.
Today I am talking about specially long or short buildup only. Everyone knows including book says when price going up with oi up is long buildup.
But in reality only few mins or one day buildup not enough to summarise it also confirmation required after any kind of buildup.
Let's explore more...
Any big players in intra or swing trader can't enter in mkt at once it's slow process.
And took almost good time for swing trader sometimes 3-7 days even more. For intraday it's in range of 30-60 mins.
Never judge direction so soon, until after buildup range not break or if some technical combination much better (optional).
Wat today happen with nifty 16450 ce and yesterday bnf option, it can happen to anyone. Either you trade any time with sl-m. Even in stocks further worst.
Every type of system hv some limit. Suppose someone hv 100cr aum for one trade then impossible to exit at price sll or slm.
Even in urgency you can think wat will happen. Also nowadays one kind of quick money scheme like intraday option selling very famous along all ppl and everyone hv little various like 20-50% series stoploss. When they start hitting; huge demand of buyers n no sellers to fill.
Definitely smart ppl already taking advantage. Now question is how we can survive with slm? Answer is straight No. Few execution system can precise but can't ignore this problem.
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.
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.