DUDE !!
I dont agree even on writing 1900 CE. But I m answering considering a hypothetical case.
(I would never have wrote 1900 CE on 3rd October considering the underlying price not far away. I m only taking this as an assignment, a hypothetical case here .)
Now, when u already have long positions in delivery, you are writing a call of 1900.
Both your positions are hedged to the premium amount received by writing 1900 on 3rd October.
Now if you further buy PUT, you are only wasting money by increasing your overall cost of buying because you have already hedged your long positions by writing 1900 CE !
Now that you have bought PUT of 1840 or 1860 & underlying is going up daily for one week.
You will suffer losses in PUT for one week or more.
So when the underlying has been going up continuously for 1 week, your PUT premium would be eroded fast.
And the call you wrote at 1900 would give u nightmares when underlying is reaching high at 1985.
You are in big loss of 85 + time value. Assuming you have 10 lots then total loss as per M2M equals around 85x5000 = more than 425,000 as I have not included time value & taxes!!
Also note I have not included the losses in PUT position. They will also be significantly high.
You seem to be living in dreams.
Realtime trading is far from past data backtesting.
Who wants such type of roller coaster ride wherein you are in big losses as per M2M and just managed to end up safely by expiry!
It only reflects very poor timing while making entry or making wrong entry.
AND I AM NOT POSTING WHAI I DO , I AM GIVING THE SOLUTION FOR THE PROBLEM.
Now, when u already have long positions in delivery, you are writing a call of 1900.
Both your positions are hedged to the premium amount received by writing 1900 on 3rd October.
dude … writing 1900 CE is no way HEDGING your long equity
as far as i have long equity i wont get any nighmares .
on the contrary you would have got nightmares when it went to 1750
Who wants such type of roller coaster ride wherein you are in big losses as per M2M and just managed to end up safely by expiry!
just assume the scenario , BAJFIN goes directly to 1750 instead of moving towards 1975 ( and then to 1750 ) …
dont go by just looking at the data that it went to 1975 first …
real time or not , here you are making a grave mistake by not considering the downside risk ( which actually happened here )…
if you had not HEDGED with puts , and if you were with some company like FutureFirst they might have given you pink slip on october 26th
PS:
dude…
THIS IS THE ASSIGNMENT AND IT IS STARIGHT FORWARD THAT YOU ARE ASKED TO PROTECT YOUR LONG EQUITY POSITION.
you cant make a blind guess about the direction by seeing the date. on october 3rd , you really dont know where BAJFIN will be heading towards ( 2000 or 1700 ).
your assignment is a classic case of implementing a protective collar ( needed google to get the strategy name though )…
Protective collars therefore are particularly useful when the broad markets or specific stocks are showing signs of retreating after a sizeable advance. They should be used with caution in a strong bull market, as the odds of stocks being called away (and thus capping the upside of a specific stock or portfolio) may be quite high.
I m done arguing with someone who is deluded in his own false beliefs. Many strategy experts pop out here on forums knowing nothing about realtime trades!
Buying PUT of 1860 @ 192.4 , (closing price) 10 lots for 192.4 x 5000 = 9,62,000 !!!
Unnecessarily wasting money 9 Lacs whopping amount hahah ROFL!! Putting big amount at stake when OTM puts may expire to ZERO If underlying doesn’t falls significantly.
Even if we waste money for just 3 puts even then 3Lacs at stake!!
I m seriously loving it.
Now biggest surprise is in the pic attached.
Actually there’s no trade done in few strike prices puts!! If there’s no seller/ liquidity means no possibility of buying PUT.
(God really saved the person from buying puts! )
As per assignment, we have to devise a strategy considering historical closing prices. But here, there would have been no possibility even of buying unnecessary PUTS
I didnt understand how do I get unrealize profit/loss for daily positions, in Question it says compute the daily unrealized gains and losses on the strategy assuming that
the positions are entered at closing prices of October 3 and unwound on expiry date of
October 2017.
So can you for 1 day explain how to compute ? assuming we are undertaking a covered call
Download the bhavcopy for October 3rd from the link I shared earlier. See the closing price of 1900 calls on that day. Use that closing price and then mark to market it to everyday closing from the 4th.
there is no MTM settlement for NSE options unlike futures. but additional margin will be blocked or released…
but there is a MTM settlement for premiums in NASDAQ options as far i know ( prepared for CFA long back form which i can recollect )
also for heavens sake , dont mislead to cover your mistakes. most of the stock options will be iliquid be it call or put …
anyway you took november 1860 PE ( not october 1860 PE ) to prove that put was iliquid …
this is how november 1700 CE looks FYKI ( both 100+ point deep indise )
DUDE u dont know what others know so stop underestimating others! Yes we are blessed to see your posts & strategies!! But I doubt if anyone would waste buying OTM worth lacs which can expire to ZERO .
I dont want to waste more time here!
Ok dude, one more thing. Do me a favour, I also posted the pic from nse website. But I m not getting the historical data which u posted.
I have also clicked on historical data for strike 1860 PE but NSE showing different page to me.
Secondly still I wont agree buying n wasting puts for 58 rs. which makes 58 x 500 = 29000 per lot.
Its a poor strategy rather blindly putting up money at stake when OTM puts can expire to zero.
NOW this is getting even more funny. I m wasting my time with some school going joker! U r acting like one only to mislead others n still arguing about your useless strategy putting what many people might have as their entire bank balance at stake!
Read the pic, the dates are mentioned of October.
Ohh I m loving it more n more.
People can be that dumb to go on & on indefinitely arguing to prove their crap strategies when they are not even worth 20,000 rs of trading capital.
Arguing n advocating strategies to put lacs of rupees at stake which have high chances to expire worthless. I m laughing seriously.
I love u @nithin for this wonderful forum which at times gives me strong boost of laughter. Hahaha !!
There’s a small flaw on nse. If we click on historical data TAB & select directly date range, it gives incorrect data. But if we click on MORE DETAILS & then enter details, this way it gives correct data.
Dont think i dont know these basic errors in NSE which was there for quite sometime ( maybe 2 years ).
Even a guy who is in the market for 5/6 month know this issue…
Button next to the data range wont work in chrome and firefox based browsers and this is a known issue.
SOLUTION:
Use INTERNET EXPLORER and select the date , it will work like a charm.
Check the screenshot i posted earlier , i selected the date range
Dont worry child. We know todays world, new traders do get excited after making 1 - 2 profitable trades. But I doubt if u had any!
Whatever I posted is from nse. Check yourself, I said there’s a small flaw in the website. I have already figured out how to get data the correct way.
See my pic attached from nse, The contract is showing dates of October in the list. If u click on historical data TAB, & select 3 months data, it shows what I posted. I agree this is a small flaw. But if we click on MORE data , then we are shown correct figures.
Dude grow up , seriously u r getting nowhere only making a clown of yourself!!
I have a life beyond this forum but seems you don’t have any! U r running after me like some angry boy.
@Bhuvan kindly lock this thread. Its getting nowhere. I don’t waste time arguing with kids!
Some people hate u because you are a successful trader!!
I will stop sharing my profitable trades so that some kids dont get burnt!
LOL someone is really angry with me because I strongly disagree with his crap strategy.
Even he himself won’t ever use that strategy even if he had all the money!!
We have preachers, kids, advocating all nonsense all day long!!
I have nothing personal with anyone but seriously some kids get really mad at u!!
