iCharts Discussions

[vince]

MTNL has made a symmetrical triangle on the charts. Please see chart attached. Breakouts from triangles are usually violent.

My strategy would be to buy a strangle at the tip of the triangle and wind up the loosing side after the breakout.

[vince]

Update on this trade.

MTNL broke out on the upside. I have squared off my long strangle (150pa - 160ca) on 9-oct at Rs. 2.20 / contract net.

[SwingTrader]

Cool, that was a good trade. Are there any other conditions that you look for when you select stocks for trading strangles? I mean other than symm triangles.

Anyway, thanks for the update on that trade.

[vince]

For any strategy involving buying of options the tricky part is the timing, since an early purchase and the decay eats it away, and if you are late the IV has driven prices too high to be profitable.

That is the reason I prefer to use strategies involving buying of options for any triangular formations since they virtually give away the time of the breakout (the tip of the triangle).

For rectangular ranging moves for example the nifty right now a short strangle taken at the beginning of this month has paid well so far.

[ramtrade]

Vince,

Have couple of questions....Can you briefly introduce the Strangle/Straddles stratergy?

Do you use any software to analyze your trades before confirming...for ex. i happened to register with thinkorswim.com which has a wonderful software tool to analyze your option trades ranging from simple to complex trades. You can analyze the trade w.r.t time decay, volatility fluctations, price fluctuations etc....

Thanks
Ramesh