Discover and read the best of Twitter Threads about #OptionsTrading

Most recents (9)

Don't get into #OptionsTrading with less than 25L if primary engine is #OptionSelling

Don't create focus on return in trades.

Read 20 tweets
The beginning of an expiry series is a good time to sell options.

When you sell options, you want to profit from erosion of option extrinsic value.

This is the highest, the further away you are from expiration.

Instead if you want to profit from a move in the underlying price, you simply buy or sell the underlying.

Or buy the option with high intrinsic value and low extrinsic value.

A lot of option buyers will prefer to buy a 60-70 delta option for trend following.

Read 3 tweets
$Nifty almost takes out the ATM straddle in one session.

Are we in for a slow grind up like 2017.

$Nifty and $BankNifty IVR almost at all year low levels.

Interesting to see Twitter folk still trying to sell index volatility.
As for my book, apart for some #putcalendars got a couple short vol trades that are setup to flip to long volatility by mid September series. These are going to need some dynamic delta adjustments.

Short vol candidates remain in single stock Sep series.

Just for reference, the $NIFTY ATM straddle is now less than 0.8% of the spot.

Last week of expiry.
Read 3 tweets
Traders need to check their ledger not daily MTM PNL statements.

Selling of deep ITM options to hide and carry forward losses is a common practice amongst unscrupulous "sub-brokers" illegally managing others money in #OptionsTrading.
There are no mandates from @SEBI_India on allowing "sub-brokers" or any party to trade and manage client funds in #OptionsTrading.

Certainly no mandate to take leverage of the sorts usually taken.
@SEBI_India Even AIF Category 3 norms don't allow leverage upwards of 2.

Beyond that, even an AIF cannot solicit funds from the public openly.

More on these norms here:…
Read 4 tweets
We are discussing $FB options on the @GreeksCap #GSRCommunity room.

Come and join us there.

We put on a bull put spread for Aug expiry at 160/155 on $FB for a credit of about $0.9

@Naveen_Joshi was gungho and went with a 1:2 Put Ratio with 165/160 PE $3.15 cr.

Sorry typo this was the 165/160 put spread for 90 cents.
Read 3 tweets
Wonderful that our 29-July #Mumbai #ODAP #Workshop attendees now have access to the Platinum plan of @MyFNO, a tool that we use everyday to Assess, Deploy, Manage & Win in our #OptionsTrading

@MyFnO We ourselves use the @MyFnO tool to *Assess* fresh #options opportunities.

We take our underlying view and combine that with our view on #Volatility to determine the range of #optionstrading strategies that can be used.

@MyFnO Armed with our assessment of the underlying and volatility views, we get ready to *Deploy* our selected #OptionsTrading strategy.

We base this on our risk to reward in the trade and our individual trading plans.

There is something for every level of trading capital.
Read 6 tweets
Some answers on trading #straddles discussed in the @greekscap #ama today in our #GSRCommunity (1/n)

Trading #straddles involve critical factors including your DTE for the straddle, the underlying and its historical Volatility, what are 1, 2, 3 SD moves. (2/n)

Take $Bajaj-Auto for example. Now in last two days this underlyings has had a 6SD move followed today by a 3SD move.

You need to ask yourself if your options position and adjustment plan can handle those kind of moves before getting into #OptionsTrading.

Read 3 tweets
The God of #Options #Greeks is often disregarded and has no mercy, especially on #Options #expiration day.

A #Thread on #Gamma.

The primary feature of #Options is their non-linear payout.

Most traders understand that #OptionsPricing is dependent on the price of the underlying, but the response is non-linear. #Gamma is the variable that describes this non-linearity.

Loosely, if #Delta is the speed of the #Options position, #Gamma is the acceleration.

Read 15 tweets
A lot of chatter on my TL about the #edge in #OptionsTrading, specifically #OptionSelling.
A lot of good information but some mis-information being spread as well.

A #thread.
First off, #OptionSelling by itself is NOT an edge.

Simply by selling an instrument that decays in value over time, doesn't give one an edge towards profit. It is accompanied by short gamma and rising #volatility working "against" you.

The #volatility #edge or premium expresses itself when the underlying moves "less" than the move that is priced in the options.

Read 17 tweets

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