Options modified strategy works well with price action trading or technicals

Hi friends. This is girish once again.

Many of us know that there are many strategies available to trade in options . Many are confused to select which strategy to trade or not . Some wonder how the pro select strategy and trade .

Some pro select a particular strategy depending on their view and greek based and adjust according to view while some work on delta adjustments and some work on volatility.

One another way is instead of adjustments, one can pre hand only create modifications in the traditional strategy which later require minimal or no adjustments. Here one needs to make use of the technicals .

Amateurs or the new comers in options need to understand that there is not a single holy grail options technique . One needs to work on a selected 2 or 3 strategy , adjust it or pre hand modify it . Such strategy then needs to be implemented as per technicals , greeks etc. Adjustments if required needs to be done . But one must know what kind of adjustments needs to be done for that particular strategy .

I will share one example of a modified strategy and it was traded as per technicals.

See the image below

To maintain patience for a little upmove , i was also long on 11200 ce of september series .

Later on nifty went up and it showed a reversal . See the nifty daily chart below

After the reversal signal confirmation , i shifted my position from 11900 ce  to 11700 ce depending on the basis of price action.

Next day the market fell  down and i covered my position .

Now my capital is free and once again i can work on another strategy to make further profits .

The main purpose was to show the amateurs that options require skill and proper knowledge to make money on a consistent basis . There is nothing like fancy or every day or every month jackpot in options . Making small and consistent returns safely every month and keeping on compounding is the key required to become a successful trader no matter whether one does delta adjustment in options , position adjustments , volatility trading , pre modified strategies etc.

 

Friends i am providing my own views. You plz trade as per your own views. Don’t blindly follow me .

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Nifty daily chart view

Hi friends. This is girish once again.

Plz see the below attached image.

Nifty has reversed from the resistance zone around 10900 and has fallen down . In the image , there are two support zones marked .

Look for buy signals and confirmation in those zones to go bullish. Without both, avoid blind trading.

Now we have entered into the third week with the effect of the theta getting stronger . So, option buyers better be with the debit spread strategy. To maximize the profit or avoiding losses , one can do position adjustments with option if required .

Those who are already in profits from the future sell or put buy , can go for put selling to lock the profits in case sudden upmove happens or market remains sideways. The strike selected should be of lesser delta.

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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Some of the students trade

Hi friends. This is girish once again.

Below is the option buy strategy (debit spread) for a stock .

Below are the options buying of banknifty options.

Market is not fancy . It requires hard work, patience, discipline , money and risk management.

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Credit spread strategy explanation

Hi friends. This is girish once again.

Credit spread is a strategy used to benefit from option selling. Here, we sell high delta options and buy low delta options. In simple way, we sell high strike and buy low strike .

There are two types of credit spreads:

• Vertical Call Spread – used when you have a bearish assumption of the market
• Vertical Put Spread – used when you have a bullish assumption of the market

Max profit is the credit you receive for selling the spread.

One needs to have chart analysis to improve accuracy as when to create a credit spread .

Below is one example of a credit spread taken by my student for banknifty weekly expiry on 7 june 2018.

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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Gamma effect in options

Hi friends. This is girish once again.

Gamma an options greek plays an important role in helping to earn more profit in options . One needs to understand it and use accordingly .

Jackpot trades can be earned but needs a strong discipline.

Nice gamma effect near ending time on expiry day . If traded options properly as per price action, one can make good profits for gamma effect .One of my students trade.

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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Option strategies works well in combination with price action trading

Hi friends. This is girish once again.

Chart analysis(price action) is one of the key factors for creating profitable option strategy. Let me explain you with an example.

This month on the third week i created a modified diagonal spread option strategy by selling may 10300 pe at 12.75 and buying june 10500 pe at 76. I changed the lot sizes to get a credit.

Why i did this ? The reason was simple . I was expecting a downfall according to the chart .

Below is the pay off chart of this strategy as a reference.

This strategy was such such that even by modifying it as per the price action, profit would have generated even if nifty would have been went upwards.

Nifty as per price action , fell downwards.  Since theta was getting stronger , the may option rose and then again came back to the level down . The next month option due to low theta was not under good time value decay .

I covered my trade with profit from the june option and may  option at near cost to cost .I earned profit of 143.50-76 = 67.5 .

Later on in fourth week ending time, i sold further otm put options of the may month and earned further profits.

Options strategy works well with price action and greeks combination. If required , modifications or adjustments can be done .

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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Nifty going perfectly as per price action trading

Hi friends. This is girish once again.

In one of my earlier post i mentioned the nifty view that it will come to around 10500 level as per price action .

Nifty daily chart view

now see today nifty exactly came and bounced from 10500

Nifty has now formed a spinning top . Tomorrow check for confirmation to go long and if not , better avoid long. But if you check the nifty weekly chart it has formed a bearish engulfing pattern. This week closing will decide its strength.

So , longs better be hedged as trend is not looking strong uptrend as per weekly chart . Daily chart might give a small rise and then fall . So, unless nothing is clear on daily chart , don’t trade on hope . Go as per the price action . Daily chart when it shows a bearish reversal, go bearish .Options of this month are now under theta action . So, debit spread is essential for option buyers. Option sellers can do modified calendar spread just like i did this month .

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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A must do course for every option trader

Nifty daily chart view

Hi friends. This is girish once again.

Plz see the below attached image.

Nifty on daily chart has now entered into the support zone after reversing from shooting star . Now look for buying signals and confirmation in this zone to go bullish . If no signal then wait.

Those who are short in future or long in puts can now sell one otm put to lock your profits. You can select its deepness accordingly.

Nifty now entering near the open interest lower boundary. So locking profits is better as now writers will try hard to protect the lower boundary.

Also half of the month is already passed with the effect of the option greek “Theta” getting stronger . So option buyers better be hedged with debit spreads.

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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Banknifty daily chart view

Hi friends. This is girish once again.

Plz see the below attached image.

Banknifty is already  running into an uptrend from the past month. Now it has entered into the gap resistance zone . One can better wait if retracement happens to buy on dips with buy signals and confirmation if required.

Nifty is also into uptrend with writers creating 10500 and 11000 boundaries.

Those who are already long in future can now sell call options to form a covered future strategy and options long can form a debit spread with profit locked. Even if the retracement happens , profit of longs will be protected by strategy . Also if market goes up, delta difference of the strategy will still make u profit.

Options is really nice if one can understand the practical meaning and applications of greeks and how to use in combination with charts and open interest. 

Always lock your profits with options position management and carry your trade comfortably.

 

Friends i am providing my own views. U plz trade as per ur own views. Don’t blindly follow me .

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