Depends on what you want to do. If you are shorting to get Theta, if you do it by Friday evening, the weekend effect would have already kicked in. Weekend selling is exploited by all traders. So the Friday evening sell only gets around 1 day Theta instead of 3 because by the time you sell on Friday, prices are already down.
But if you try to front run it to Thursday, you will end up getting hit by Friday moves.
Tough choice honestly.
As far as when to go long, it is more of a question of what to go long on. If you are playing direction, go long ITM options. No theta, and 1 delta.
Please create/Share a strategy for those who are beginner in option trading (without Selling)
Can you create a strategy for banknifty whereby we can hedge it with its top3 constituentsā¦HDFC BANK, Axis BANK, Kotak Bankā¦ similar thing is done by parmod . can be read at http://optionsnext.com/money-in-the-bank-january-2020-january-09-2020/
but it involves sellingā¦Can a similar strategy be created using Buy only?
I think Greeks is one of those things which are overrated. I think you should not bother much about them. People get so obsessed with making money from math that they forget seeing things right in front of their eyes. Case in point, one of my old colleagues sold options on surgical strike day because IV was 20 and Vega was something
They do make sense for large institutions and delta neutral desks though.
Weekly options are better traded by just looking at the premium, and not Greeks, if you are a retail person. It helps to know your Theta, but that is easily there in any option chain. My 2 cents - Skip the Greeks, focus on getting supports, resistances, etc right. There is more money to be made there than by devoting time to Greeks.
Thanks for the Easyoptions bit We will add more instruments there. The target date part is very complex and best done by Strategies Wizard.
Thank you Kevin. There is no doubt that automated trading is the best way of trading as it involves human emotions. And we are trying to get to a state where we can automate all trading.
However, there is a key point I would want to highlight.
There is a difference between algo trade generation with automation and algo trade execution with automation. The former is easy. And it does not solve the key psychological issues of retail trading. It only helps you to find good trades using a machine. You will still need to execute them manually, which is where all the risks of discipline lie. This is where automated execution comes in. If your trades are executed by a machine, then the risk of psychology, not hitting stop loss, position size etc is gone.
If you ask me automation and algos should come in the latter - which is execution and not in the former which is generation.
The issue in that is that automated execution by algos is not available for retail yet in the country. Perhaps, @siva-reddy or @nithin can throw more light here.
Why i is there no easy way to Backtest on option charts on lower timeframes as data is not available free on popular charting tools? How does it make sense when Sensibul recommend a trade call on options without showing its historical performance like max drawdown, expectancy etc, also instead of just showing a payoff diagram ā¦?do you recommend traders not have a system based trading and instead only follow trade calls and thereby become consistently profitable?
Why are forward dated options like June20 not available on the platform, is it because they are not liquid. for eg. In the US market June20 options are very liquid. My intention is to create long term trades which give my trades enough time to play
Will sensibull show index standard deviation in the coming future, are you aware if index options in the future will have weekly options expiring on say on a weds, Friday or monday
This is because not enough of our users trade long dated index options. To maintain each option series in the platform is a lot of tech overhead, which forces us to choose. Sure we can do some major infra work and overhaul this, but at every stage we are forced to ask ourselves, how many users. This is a problem every company faces in serving a smaller user group. That said, we will do something about this soon.
Honestly I am very conflicted on this one. We decided to not take up back testing. This is because:
I am told by people who trade options in hedge funds that backtesting on options with medium to long term horizon is not as useful as people think it is. These are people who know what they are talking about, and I chose to trust them.
As retailers, it is very tough to stick to backtested systems, maintaining the exact position size, delta etc.
Finally, very few retail investors use backtested options systems.
We will watch backtesting space though for any options opportunities.
Hey Abidā¦Sensibull has been doing a great job.Thanks for the platform.
OI Charts can be made even more easier , at times when I go near the bar it doesnāt show what price the Call OI or Put OI is accumulated at.
Can you please make more awareness on options trading using USD INRā¦as of now I could just a video ( still the best I have seen) ā¦more would be really great. ( Can even recommended under free advice )
I love the advise part and follow interestingly however for retailers it is absolutely difficult to trade these many positions with such a hefty margins since these are two legs position.
Can you try to minimize positions by fine tuning by probably trying to improve the winning ratio.
You could also try to put more index positions which helps retailers to go with less margins.
In my opinion strategies on advice are structured with high winning probability hence the high winning percentage. If this is compromised the win rates will decrease
@Sensibull I know people recommend to trade in Options using some strategies such as strangle, straddle etc. I want to know for a trader who basically play in weekly expiry using theta decay - from risk perspective whatās the difference between short strangle and short naked otm? What kind of strategies (naked with SL vs others) are recommended for traders who trades in weekly expiry options?
I am strongly in support of taking options trading to everyone but donāt you think that the lot size constraint will be a problem for people who are just getting started ?
