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Diagonal Spreads - Discussion, Q&A, etc |
SwingTrader
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Joined: 11 Aug 2006
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Location: Hyderabad, India
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Post: #316  Posted: Thu Jun 23, 2016 10:56 am Post subject: Re: JUNE 16 8400 PE + JUNE16 8100 PE |
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| Last Crusade wrote: | Thank you ST,
Covered my Diagonal Bull spread.
My Trading set up Signals "SELL",
As you suggested 10days after expiry it wise to initiate vertical spread.
The below selection of strike price is suitable to initiate Vertical Put spread?
JUNE 16 8400 PE@ 193.00
JUNE16 8100 PE@ 60.00
Thank you
-Crusader |
Sorry, missed this message. What did you do then?
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Srikanth Kurdukar
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SwingTrader
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Joined: 11 Aug 2006
Posts: 2903
Location: Hyderabad, India
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| Post: #317 Posted: Thu Jun 23, 2016 10:58 am Post subject: Re: BankNifty Options |
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| NiftyTracer wrote: | Hi ST,
Now since BankNifty weekly Options have started and we have liquidity in these, can we consider these by going long on monthly and short on weekly (week 1 or 2 or 3 or 4 - as the case may be, like June had 4 weekly + 1 monthly). What is your opinion and how would you suggest trading them. |
I will have to test this out before I can say something. The idea makes sense but weekly is going to be a bit tricky so some testing is necessary. I will be able to test only after we collect some more data. So I guess I will have to wait for some more time before I think about trading BNF weekly options.
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Srikanth Kurdukar
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Last Crusade
White Belt
Joined: 09 Jan 2010
Posts: 38
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| Post: #318 Posted: Sat Jun 25, 2016 9:16 am Post subject: Re: JUNE 16 8400 PE + JUNE16 8100 PE |
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| SwingTrader wrote: | | Last Crusade wrote: | Thank you ST,
Covered my Diagonal Bull spread.
My Trading set up Signals "SELL",
As you suggested 10days after expiry it wise to initiate vertical spread.
The below selection of strike price is suitable to initiate Vertical Put spread?
JUNE 16 8400 PE@ 193.00
JUNE16 8100 PE@ 60.00
Thank you
-Crusader |
Sorry, missed this message. What did you do then? |
Since I had taken vertical Put Spread of three strike price difference, I was not sure, so Closed the trade on 14th june :
JUNE 16 8400 PE@290
JUNE16 8100 PE@100
I want to know, can we take diagonal or vertical spread of three strike price difference.? I had taken three strike difference to arrive at 26% to 30% hedge. Have i done it correctly by taking three strike diff?
Below is the performance table.
Thank you ST
-Crusader |
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SwingTrader
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Posts: 2903
Location: Hyderabad, India
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| Post: #319 Posted: Mon Jun 27, 2016 2:10 pm Post subject: Re: JUNE 16 8400 PE + JUNE16 8100 PE |
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| Last Crusade wrote: |
I want to know, can we take diagonal or vertical spread of three strike price difference.? I had taken three strike difference to arrive at 26% to 30% hedge. Have i done it correctly by taking three strike diff?
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Yes, you could take a three strike price wide diagonal / vertical. But do understand that the risk is higher than in a two strike wide spread (of course, the reward also is significantly higher). The P/L volatility also will be higher. When one is taking such a position, one must have a stop loss point and a probable target in mind. This way we won't freeze when market takes off in a direction.
Always have target and exit point in mind when trading spreads because even on the upside there is no use staying in a spread beyond a certain point. To achieve max profit possibility in a spread, one has to stay on until expiry but then if we can get out with 60-70% of max profit early then one should get out and put the money to work somewhere else.
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Srikanth Kurdukar
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Last Crusade
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Joined: 09 Jan 2010
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| Post: #320 Posted: Tue Jul 05, 2016 10:55 am Post subject: Long 8300 PE AUG16 and Short 8100 PE JULY16 |
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Dear ST,
My trading plan,
Long 8300 PE AUG16@ 144(Not triggered yet)
and then Short 8100 PE JULY16
Thank you
-Crusader |
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Last Crusade
White Belt
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Posts: 38
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| Post: #321 Posted: Thu Jul 07, 2016 9:51 am Post subject: Re: Long 8300 PE AUG16 and Short 8100 PE JULY16 |
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Dear ST sir,
Now trading plan initiated , i have taken below put spread
Long NIFTY 8300 pe AUG16@137
Short Nifty 8100 pe JULY16 @42
Thank you
| Last Crusade wrote: | Dear ST,
My trading plan,
Long 8300 PE AUG16@ 144(Not triggered yet)
and then Short 8100 PE JULY16
Thank you
-Crusader |
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SwingTrader
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Posts: 2903
Location: Hyderabad, India
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| Post: #322 Posted: Thu Jul 07, 2016 10:30 am Post subject: |
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Last Crusade,
Is this in anticipation of a down move? The trend is still up though....
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Srikanth Kurdukar
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Last Crusade
White Belt
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Posts: 38
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| Post: #323 Posted: Thu Jul 07, 2016 1:53 pm Post subject: |
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Dear ST,
I have initiated PUT spread, in the anticipation of a down move , on my own trend identifying method. Have i chosen correct strike price?
Thank you
-Crusader
| SwingTrader wrote: | Last Crusade,
Is this in anticipation of a down move? The trend is still up though.... |
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SwingTrader
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Location: Hyderabad, India
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| Post: #324 Posted: Thu Jul 07, 2016 4:44 pm Post subject: |
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| Last Crusade wrote: | Dear ST,
I have initiated PUT spread, in the anticipation of a down move , on my own trend identifying method. Have i chosen correct strike price?
Thank you
-Crusader
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It depends on how much of a decline you expect. A long 8300 PE means you expect price to go below 8300, the lower the better. Diagonal looks fine if that is the idea. If market breaks out above 8400 then look to adjust or close position as the position can lose value quickly.
Good luck 
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Srikanth Kurdukar
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apka
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Posts: 6137
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| Post: #325 Posted: Thu Jul 07, 2016 11:58 pm Post subject: |
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Hi ST,
do you still draw those charts of you specialize in? If yes, can you share with us what they are projecting for near to long term future for now? |
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SwingTrader
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Posts: 2903
Location: Hyderabad, India
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| Post: #326 Posted: Sun Jul 10, 2016 8:44 am Post subject: |
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| apka wrote: | Hi ST,
do you still draw those charts of you specialize in? If yes, can you share with us what they are projecting for near to long term future for now? |
Apka,
Nice to hear from you. I regularly update breadth charts and use them but I have not updated options sentiment since a while as I did not find much use of it. In any case, I will shortly update all and post just to see how they have done.
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Srikanth Kurdukar
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Last Crusade
White Belt
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| Post: #327 Posted: Tue Jul 12, 2016 10:37 am Post subject: Re: Long 8300 PE AUG16 and Short 8100 PE JULY16 |
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Dear ST,
Closed the spread near to the closing price yesterday,
| Last Crusade wrote: | Dear ST sir,
Now trading plan initiated , i have taken below put spread
Long NIFTY 8300 pe AUG16@137
Short Nifty 8100 pe JULY16 @42
Thank you
| Last Crusade wrote: | Dear ST,
My trading plan,
Long 8300 PE AUG16@ 144(Not triggered yet)
and then Short 8100 PE JULY16
Thank you
-Crusader |
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umeshlp
White Belt
Joined: 08 Sep 2011
Posts: 14
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| Post: #328 Posted: Tue Aug 23, 2016 6:30 pm Post subject: Can we take position now for Sept / Oct? |
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I am bullish on Nifty. Can we take position now for L OCT8600CALL + S SEPT8800CALL
Spot Nifty = 8632
OCT8600CALL = 264
SEPT8800CALL = 90
264/90 = 2.93
Is it too early?
BR,
Umesh |
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SwingTrader
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Posts: 2903
Location: Hyderabad, India
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| Post: #329 Posted: Tue Aug 23, 2016 7:04 pm Post subject: Re: Can we take position now for Sept / Oct? |
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| umeshlp wrote: | I am bullish on Nifty. Can we take position now for L OCT8600CALL + S SEPT8800CALL
Spot Nifty = 8632
OCT8600CALL = 264
SEPT8800CALL = 90
264/90 = 2.93
Is it too early?
BR,
Umesh |
It is perfectly fine, expiry is this thursday so it is not early at all. One point to make clear about the above. To decide on the strikes, look at NF futures price (long option one - Oct 16 fut). It closed around 8738. So 8600-8800 or 8700-8900 are both fine.
The ratio should be checked using (short option premium / long option premium). In your case it comes to 0.34 or 34% which is fine (more conservative). The hedge ratio for 8700-8900 could be a bit aggressive.
Good luck!!!
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Srikanth Kurdukar
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neerav1234
White Belt
Joined: 30 May 2013
Posts: 8
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| Post: #330 Posted: Fri Aug 26, 2016 10:38 am Post subject: |
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Dear ST Sir..
Once we close a spread in last month..what are the ways to initiate next diagonal ??
Shall we just close the current diagonal and immediately initiate the next diagonal in the direction of trend or wait for pivot break above or below and enter the diagonal then..
As in current series its uptrend according to 13/233 in hourly what should be done after closing previous bullish diagonal..
Thanks |
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