Okay once and for all a proper Thread on Strangles and Managing them according to your Patience/Skill
Let's Go
Let's Go
1. The Newbie/Beginner- You just saw How cool Short Vol Bois are and how they relax out and you have an itch to also do short vol and feel that feeling of being a hunter and take that free easy money by doing nothing all day.....this is not for you go back and loose more money
If you are Starting out it is best to first dip in your toes with very cheap options let's say ₹15-₹20 in BNF. Go and sell with mere lots (so that it does affect you when you see the pnl) and just sit and watch you will learn how the options behave on what kind of movements
Then learn yourself what kind of person are you.
1. Your Risk tolerance
2. Patience level
3. How to not jump out of the balcony in 10 diff ways every single hour (not kidding just wait you will know)
You will start seeing what makes you uncomfortable and...
1. Your Risk tolerance
2. Patience level
3. How to not jump out of the balcony in 10 diff ways every single hour (not kidding just wait you will know)
You will start seeing what makes you uncomfortable and...
...your reactions are your trades here.
Let's say then you find out oh well at this movement of BNF of 0.3% i want to shift my strikes To
1. Match the Premium
2. Come Closer
3. Farther away
4. Close out
Let's say then you find out oh well at this movement of BNF of 0.3% i want to shift my strikes To
1. Match the Premium
2. Come Closer
3. Farther away
4. Close out
Now these are the only 4 ways which you have and when you realise what you'll be doing most of the times then you have found your answer. What kind of Short Vol Strangler you are is now for you to decide on the basis of the things mentioned here.....
Now if you are someone who likes to be standing there in the position no matter what because you don't like Adjustments i would say then Take hard stop on MTM and calculate that by putting SL on both sides equivalent to your SL.
If you are someone who like to Match premiums (ME) then Make sure to Check Delta while doing it as on Expiry days you can get hit hard badly and left unconscious. This Trading is not good for Expiry itself that too after 12pm
Also know some Good S/R levels as they will help you
Also know some Good S/R levels as they will help you
Because in a way you have to see whether you are just getting trapped in mean reversion.
Tips-
1. Have Lightning quick speed for this
2. Don't fight back when RV>IV
3. Don't Do this on Expiry
4. Make sure to check your Delta at all times
Tips-
1. Have Lightning quick speed for this
2. Don't fight back when RV>IV
3. Don't Do this on Expiry
4. Make sure to check your Delta at all times
Now you are someone who likes to Go further because you have PTSD of Directional moves and Nirmala is a candle not our Finance Minister for you. Good choice you will be having a slight bit of easier time than most of the others. M
Make sure to keep in mind of Breakout/Breakdown levels here as those one's would really mess up with your mind as you want to get lured by premium but have to sakht as that's not your style or Liking.
Tips-
1. While going away don't go that far that you won't realise any premium
Tips-
1. While going away don't go that far that you won't realise any premium
2. Your SL will be hit multiple times so make sure when you enter you have a fair size of Delta and IV checked already. Risk manage krte krte pata chale ki ek rs bhi nahi bana mahino hogaye
3. Don't have high expectations of ROI through this style as Theta Decay is NOT and edge
3. Don't have high expectations of ROI through this style as Theta Decay is NOT and edge
These were just some tips for beginners will write on for Intermediate as well soon, Experts don't need threads written ;)
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