Comments on Trading Steps: Taking advantage of Time Decay in Options

hello sir nifty seems to have broken down from a r...

2010-07-31T19:32:54.413+05:30

hello sir
nifty seems to have broken down from a rissing bearish wedge with negative oscillators on the daily chart
i think this is a good place to take a long term short position with a SL above the highs, the risk is 100 points to the upside and reward is atleast 500 pts over time
check this chart
http://stockcharts.com/h-sc/ui?s=$BSE&p=D&yr=1&mn=0&dy=0&id=p69901023178&a=182867862&listNum=6&listNum=6

Thank you sir.

2010-07-30T21:13:29.214+05:30

Thank you sir.

In my personal experience, Covered Puts (or Covere...

2010-07-29T23:28:26.316+05:30

In my personal experience, Covered Puts (or Covered Calls) are better when markets are range bound. For eg. Write 5200 Puts and Short 5400 Futures. Also hedges your long-only portfolio. The premium received can be used towards stop-loss for the futures. A 200 pt gap works well for me.

Sir, It really was an frustrating experience from ...

2010-07-29T23:15:52.913+05:30

Sir,
It really was an frustrating experience from July 7th till expiry, barring a period from nifty's travel above 5400 to 5460 and back to 5400. The range was 5360 to 5410 rest of the time.

In last 3 years I have not seen such a close move of nifty like this, with your experience you may provide more light on trading during such a time.

Also sir, I would like to have your suggestion what should be done on an expiry day like today, the period between 2.53 p.m. to 3.01 p.m. the nifty along with many puts and calls went nastily from one direction to other, while nifty came swiftly from 5408 to 5390 and then back to 5408 .

bkm

hello sir -- the point raised by krishna is very v...

2010-07-29T23:13:36.727+05:30

hello sir -- the point raised by krishna is very valid indeed -- i prefer to sell out of the money STRANGLES -- instead of straddle-- say sell aug 5600 CE @ 70 + as welll as 5200 PE @ say 50 + == a total 120 points upfront cash flow into the account-- wide range of safety -- 5080--5720-- and also protect the losing position -- like -- if nifty drops to 5300 -- then again can sell 5400/5500 calls to protect short 5200 PE -- IF DONE WITHPROPER MONEY MANAGEMENT AS WELL AS POSITION SIZING --this is one of the best strategies in RANGEBOUND MARKETS --RESPECTED SUKHANI JI -- your valued and expert opinion is requested -- dr vaibhav