Subhasish Pani earned +1,41,25,022 profit in Option Buying on Expiry day yesterday.
He captured the down move in both futures and options.
Here's a breakdown of how he earned this profit: π§΅
Collaborated with @niki_poojary
He captured the down move in both futures and options.
Here's a breakdown of how he earned this profit: π§΅
Collaborated with @niki_poojary
1/ Breakout Failure
Above 42700, all traders were expecting a breakout.
But do you know failed breakouts are more powerful than breakouts?
Sharp selling will happen if a failed breakdown occurs and he was fully prepared for it.
Above 42700, all traders were expecting a breakout.
But do you know failed breakouts are more powerful than breakouts?
Sharp selling will happen if a failed breakdown occurs and he was fully prepared for it.
2/ Hints
He was giving hints from 1-2 months for Option Buyers regarding when they should buy options at a low IV.
The current market scenario was one where the premiums were too low.
According to him, one should plan for a buying trade during such scenarios and target big.
He was giving hints from 1-2 months for Option Buyers regarding when they should buy options at a low IV.
The current market scenario was one where the premiums were too low.
According to him, one should plan for a buying trade during such scenarios and target big.
3/ Gap down sharp selling
Prefers 12 o clock momentum usually whenever there is a gap-down scenario.
Already the market above 42700 buyers weren't strong enough. So on Thursday in a gap-down scenario, he was expecting a big downfall.
Prefers 12 o clock momentum usually whenever there is a gap-down scenario.
Already the market above 42700 buyers weren't strong enough. So on Thursday in a gap-down scenario, he was expecting a big downfall.
4/ What trade he took?
He bought 36,000 qty of puts of 42500 strike at 92 and exited them at 391.
(43200 qty is an error by him, correct qty should be 36,000)
He bought 36,000 qty of puts of 42500 strike at 92 and exited them at 391.
(43200 qty is an error by him, correct qty should be 36,000)
5/ Order Book
Here is the order book with the timings of when he bought and also the timing where he sold.
Bought the puts at 91 of strike 42500, and sold them at 391.
Here is the order book with the timings of when he bought and also the timing where he sold.
Bought the puts at 91 of strike 42500, and sold them at 391.
6/ Future positions profit
Because of a bearish bias, he had already taken some future shorts home on Wednesday.
When the down-move started immediately post-opening, he was already in 20 lakhs profits in futures.
Because of a bearish bias, he had already taken some future shorts home on Wednesday.
When the down-move started immediately post-opening, he was already in 20 lakhs profits in futures.
7/ Risked those profits
Since he made 20 lakhs in futures, he decided to risk those profits to earn higher for the day.
So he bought 42400 puts at 92 with the intention of only risking 20 lakhs in them and finally exited them near 391, thus making a huge profit.
Since he made 20 lakhs in futures, he decided to risk those profits to earn higher for the day.
So he bought 42400 puts at 92 with the intention of only risking 20 lakhs in them and finally exited them near 391, thus making a huge profit.
8/ IV less (premium are damm cheap)
Option buying premiums are low for the last 10 expiries and in many of them, we have seen very good momentum on expiries.
If premiums are cheap and a big movement comes, its the best thing for option buyers so they should be prepared.
Option buying premiums are low for the last 10 expiries and in many of them, we have seen very good momentum on expiries.
If premiums are cheap and a big movement comes, its the best thing for option buyers so they should be prepared.
9/ Option sellers will be scared
He says a buyer should plan a good R:R trade for buying either when Option Sellers are scared (due to low premiums) or stuck (in round number strikes).
When premiums are low, sellers are easily trapped as there is very less scope to adjustments.
He says a buyer should plan a good R:R trade for buying either when Option Sellers are scared (due to low premiums) or stuck (in round number strikes).
When premiums are low, sellers are easily trapped as there is very less scope to adjustments.
10/ Market should increase premiums before budget
Usually, before an event what happens is there is an increase in volatility and premiums shoot up on both sides to compensate for the risk associated with the BUDGET.
This time the premiums had not increased.
Perfect scenario!
Usually, before an event what happens is there is an increase in volatility and premiums shoot up on both sides to compensate for the risk associated with the BUDGET.
This time the premiums had not increased.
Perfect scenario!
11/ Drawdown recovery
In January, he is just coming out of a drawdown.
No one likes to always be in a drawdown, and one should risk profits made already to make more going ahead.
So from a month or two he might have been flat, so he risked less.
In January, he is just coming out of a drawdown.
No one likes to always be in a drawdown, and one should risk profits made already to make more going ahead.
So from a month or two he might have been flat, so he risked less.
12/ Risk to Reward was great
He hates an R:R of 1:1 & usually prefers it to be 1:6 and 1:10.
Today he got out at 1:3 approx.
Only in scalping does he trade with low R:R.
He hates an R:R of 1:1 & usually prefers it to be 1:6 and 1:10.
Today he got out at 1:3 approx.
Only in scalping does he trade with low R:R.
We are finally on Youtube!!
We have a free Youtube Channel where we cover our analysis of the markets.
If interested feel free to join using this link: youtu.be
We have a free Youtube Channel where we cover our analysis of the markets.
If interested feel free to join using this link: youtu.be
We also have a free telegram channel.
Link to join: t.me
Link to join: t.me
That's a wrap!
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If you enjoyed this thread:
1. Follow us
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We've got you covered.
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I appreciate it!
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