Open Share Trading Account – No Acc Opening Fee – No Commission on Mutual Funds and IPOs, No AMC Fee – Set GTT (Good Till Triggered) Orders on System and Forget – The System Will Book Profit. Click Here to Open!!!
I have written a book on Personal Finance. It will help you to know the best ways to invest in stocks, mutual funds and options. Click here to get the book.
My Course Testimonials Year Wise:
Year 2015 | Year 2015 Page 2 | Year 2015 Page 3 | Year 2015 & 2016 | Year 2016 | Year 2017 | Year 2018 | Year 2019 | Instant Reaction Testimonial | Difference Between Othe Courses And Mine | Most Emotional Testimonial | Year 2020 | Year 2021 | Year 2022 | Year 2023 & 2024
Click here to WhatsApp me to know more about my course – if you want to do my free course please fill the form below!!!
Note: Part of my newsletter sent to my subscribers sent on September 14, 2015.
Refer my email dated: SEPTEMBER 10, 2015
You can find it here:
http://www.theoptioncourse.com/todays-view-on-nifty/
I had written to take this trade:
For example consider this trade right now:
Sell: 24-Sep-15 PE 7,700.00 at 152.00
Buy: 24-Sep-15 PE 7,600.00 at 115.00Why? Because INDIA VIX is at 24.88 – which is great for option writers.
Max profit in this trade is if Nifty is above 7700 on 24 September 2015, the expiry day – which will be 152-115 = 37 points and max loss will be 100-37 = 63 points.
So now either you lose 63 or make 37 – there can be no other loss. But what if Nifty goes up tomorrow by 100 points and VIX drops? You will be in 10-15 points profit in one day and close the trade. That’s it – all worries gone and you made a quick profit.
This is what happens when you hedge your positions.
Right now INDIA VIX has fallen to 24.56 and
24-Sep-15 PE 7,700.00 is at 92.00
24-Sep-15 PE 7,600.00 is at 67.90
So the position is making around 13 points profit. 152-92 = 60 and 67.9-115 = -47.1
60-47.1 = 12.9
This is a return of 1.3% in 4 days.
Those who traded, may close the position as this is considered a good return in 4 days itself.
As you can see INDIA VIX was 24.88 and today its 24.56 – so not much of a fall – BUT Delta & Theta made the profit. Nifty moved 100 points up and 4 days passed.
What if Nifty had fallen 100 points?
Depending on VIX, the loss would still be 10-15 points BUT for a naked seller it would be 60 points and thats huge.
He would have stopped out with huge loss in just 4 days with Nifty moving 100 points only. But the hedged trader can wait for Nifty again to go up and take his profits. In any case the max loss is 63 points.
Frankly most of these kind of trades make money.
I hope you understand why my emphasis is on hedging.
Enjoy the profits.
Thanks.
Click to Share this website with your friends on WhatsApp
COPYRIGHT INFRINGEMENT: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement.
INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However, every trade depends on the trader and his level of risk-taking capability, knowledge and experience. Moreover, stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website.
DISCLAIMER: I am NOT an Investment Adviser (IA). I am an Authorized Person (AP) of a Stock Broker. I do not give tips or advisory services by SMS, Email, WhatsApp or any other forms of social media. I strictly adhere to the laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles on this website. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given on this website. I am not responsible for any investment decision you take after reading an article on this website. Click here to read the disclaimer in full.
Find 200+ testimonials of my course:
What Traders Say About This Course