iCharts Discussions

[hansraj456]

Will discuss more probabilities later today.

[vijayakannan]

hi hans , how u are managing gap up/down in opening. as per current position , you have to short below 4900 or buy above 5000 (let us say). what should we do if tomorrow it opens gap up at 5050. should we enter at 5050. and also what should we do if it comes to 4950 same day. Pls dont mistaken me. Just want to know all the possibilities before entering the trade

thanks for a good strategy

rgds
vijay

[hansraj456]

Hi Vijayakannan

I have also experienced such situation. First in August when I was to go long at 4420 but had to go long at 4450. Second instance, in December (current month), I was to go short at 5140, but could do it at 5130 and was short till i exited yesterday from that position.

Under such instances you have to generally enter at around 10:05 and 10:15 hours in the next trading day according to the movement. Let's suppose, if tomorrow Nifty opens at 5020 and at 10:05 and 10:10, it reaches 5040. Go long at 5040 and hold till it comes down to 5040 either same day or in future. It means you have to short nifty at 4950 and Long at 5040 (instead of 5000). In such situation you won't having any position between 4950 and 5040. But if on some other day Nifty comes between 4950 and 5000, you again stick to earlier rule i.e. go long above 5000 and go short 4950.

Suppose, we go long tomorrow at 5040 and nifty always remains above that level during next 2-4 weeks or suppose at 5180 at the end of 1st week of january, our profit will be around 190 points otherwise, it should have been 230 points. Under such situation, our profit may be few points less, but we will never go in loss.

Otherwise, if you wish to cover these 40 points, go long with 2 lots of nifty fut till you get 40 points or exit at 5040 level and see if levels reach 5000. There are somany ways to cover left out points.

Note : Read the call very carefully which means :
Go short in Nifty Future at 4950 and hold it for as many time or days as it remains below 4950. If it again comes at 4950, exit at this level. Under such situation, you won't gain even a single point in future, but you will get somany points in premium erosion.
Go long in Nifty Future at 5000 or 5040 level and hold it for as many time or days as it remains above 5000 or 5040 (whatever is the entry point). If it again comes at 5000 or 5040, exit at this level. Under such situation, you won't gain even a single point in future, but you will get somany points in premium erosion.
It means your entry and exit points in nifty future long or short will remain same till you hold this combo option.

Please pose as much querries as you can and get all your doubts cleared before investing under this strategy. Otherwise, you can trade in dummy way and calculate on spread-sheet the profits you can earn before making actual investment.

[serenshri]

Hi Hansraj

Good Strategy in sideway markets, things to be noted is

1. Liquidity in buying back options at later date, Nifty next month options contract is better but not foolproof in liquidity for contracts as 2, 3 or 6 months

2.margin money should be surplus as instances may happen the sells in Put and call may default

3 Pray for no gap ups or downs more than 80~90 points

4. Entering Future as levels need constant vigil on market atleast on every trading day opening

Regards

Sridhar

[hansraj456]

Hi serenshri

Read my last traded example and check the calculations. Generally, I need 60000/- for one trade (selling both options and hedging with future) but earlier I used to keep 75000/-. But I never required total money more than 60000/- per trade. I started with 2 lots (each in options and future) in August and now having 5 lots. It's a calculative game and money management, not a panic situation or technical analysis. It works in any kind of market.

Liquidity in options for next month is not a problem at all as next month options around 100-150 points away from current price always remain liquid and there is no problem in selling such options.

Additional margin money is not required as if premium of one option increases, premium of other always decreases. and hedging with nifty future points come to your kitty on M to M basis.

If big gap up or down happens, act accordingly, it may reduce your profit but will never give loss, that's sure. That's also a reason, I am now making two trades per month instead of one, to reduce the chances of gap ups/downs more than 1-2 chances in one trade. and such trades give more profit, which covers any such situation.

This strategy works better, if you trade off-line account. I have off-line account and tell my operator on the day of making position. For example, I told him yesterday to go short at 4950 and go long at 5000. There is one more situation, if the nifty entry point comes around 3.00 - 3.30 pm, do it very carefully, or otherwise, you can avoid it.

You will get experience only if you do the trade or watch regularly such situation. You should trade under this strategy only when you are fully satisfied that you can do it.

[psrao]

Hansraj,
once you enter short at say 4950, what is the SL ?

I mean if u enter at 4950 and it goes to just 4940 and reverses to 4950, will u exit?

or say 4949 is the low of the day, where will u put SL?

regards
psrao

[kripalsinh8888]

Hats Off !

to u Hansraj.........absolutely an outstanding strategy.............
no technical........no brains.......only common sense..........

as Time Value is with u............


Cheerz ,
keep it up mate
keep posting such strategies >>>>>>>>>

[hansraj456]

Hi psrao

If the time is 3.00 - 3.30 pm, I don't trade and wait for next day and don't bother about gap up or down. If it's time between 9.55 and 3.00 pm, I wait for 3-5 points. For example if i short at 4950 and it goes at 4945, my SL will be 4950. if it goes more than 20 points below 4950, my SL will be 4947 (3 points brokerage). Some times I have to trade 2-3 times in a single day like this and some time only once in a month. You have to trade as many times as it comes that level or if you want to avoid trades, your SL should not be more than brokerage for sell/buy trade i.e. 3-4 points. It's up to your risk appetite whether you want to take chance or pay brokerage. I always pay brokerage. As I told you earlier, I have off-line account and I have told the levels to my operator. He keeps on selling or buying future on his own and some times I don't even come to know and he makes position. As per my previous experience, I have per month paid maximum brokerage upto Rs.1250/- (December) and minimum Rs.180 (Sept) and average is around Rs.700/- per month. My experience says, pay to broker happily so that he should give you best service. I don't trade online and place orders over telephone only.

As I have explained earlier, earlier my target used to be around 300 points in a month and used to make one position in a month and now I have changed the strategy and making two positions and difference between strike prices is now 300 points. By following this, we can earn around 400 points, the additional 100 points for unforseen circumstances

[hansraj456]

Hi kripalsinh

Thanks for your comments. I will be more happier if people begin to earn good profits following this strategy. I am following only this combo strategy and it's share in my portfolio is 50%. Stocks are 25%, Intraday Nifty Future = 15% and Intraday Options = 10%. But these days, I get few chances of intraday trading due to sharp movements in nifty. So avoiding intraday for last few days.

You can see my stock calls in 'Stocks' section of this forum

Thanks

[kripalsinh8888]

hi! Hasraj
I had a small doubt abt 1 thing .............tht suppose we buy at 5000.......nifty goes 5010 .............n again returns back to 5000...........then according to ur strategy exit ...........right ?
correct me if I m wrong ...........n again take the position if it crossses 5000 for the 2nd time............

plz throw sum light on this confusion.........

thanking u,
kripalsinh

[hansraj456]

Hi

As doubts were raised about gap up etc. It didnot give 5000 level at opening. At 10.05 Nifty future was 5020. So I am long at this level and will exit if it goes again at this level. After that if it goes below 5000,my long level will then be 5000 or it will remain 5020.

Thanks

[kripalsinh8888]

hi!
hansraj.......I applied this strategy at 5015........
thank u for this wonderful strategy.........

dear could plz add me in ur msger......

my Id is xxxxxx

thanking u ,
kripalsinh

[suprithvi]

hai hansraj sir,
Really it is an amazing one.could you pl add me in your msgr list.my id is xxxx

[rmsharma]

Dear hansraj ji

Thank you for your strategy and the clarifications. I have been picking my brains on how to benefit from both side option selling strategy but was'nt too sure that it will work because i was afraid the brokerage on covering futures would go too high. But as your experience has shown that it is still within manageable limits.

I will try the strategy on paper for some time before executing actual trade and shall seek your help for more clarifications if required.

Best Regards.

rmsharma

[hansraj456]

Hi

Now I know, few people have made good profit on first day today. I got nifty long in future at 5020 and still hold it. One of this forum reader is long at 5015 and few around 5040 - 5050 levels also.

One disclosure here, as per the plan we should have been long at 5000 but nifty future opened above this level and started running up. I got chance to enter at 5020 at 10:06 hrs. (see timing in such situation I discussed in my previous posts). But here I doubled the lots for nifty long. The idea was that I will exit half of the lots at 5040, so the gap of 20 points from 5000 to 5020 is covered, If nifty had not gone that level, I would have been exited at 5020 from all the lots. The idea was only to cover 20 points, that's it. I have done so for the first time as experienced such situation so many times and this is the proper answer to the doubts about gap up/down opening in nifty.

But it was a luck only that nifty ran up so fast and I exited from half of the lots at 5160, just a few moments before the close. Now I am holding Nifty long for number of lots I have sold in options.

When to exit : Around first week of January (so that next position could be made) OR if premium of one of the options sold comes below Rs.50/-. In that case call of 4800 will be far away from the nifty spot levels and value erosion in 5100 put will be limited. So be alert for exit around first week of January or when premium of 5100 put of jan comes down to Rs.50/-. We should be getting around 200 points in total from this position.

Note : I am not here to prove that I am genius or else. I am just sharing my experience. I again request all the readers to read this column time and again (as most of the things are now already explained here) so that you should be able to understand how this strategy works. I wish people should pose as much querries as they can as this helps me to make the strategy fool-proof.

Thanks