Sorry for late posting here I have squre off my Nf option heding strategy.
Profit calcualtion as under:-
A.Nf 4800Ce-Buy @125 (sold @ 275)+150
B.Nf 5100Pe-Buy @340 (sold @ 200)-140
C.Nf Future Short@ 4950-4760=190
Total profit A+B+C=200 Points.
Covered whole position in just 4 trading days wow its amazing
Musti:
ReplyDeleteI have a serious doubt in your options strategy where you have mentioned the following:
Quote
Every time when Nf goes above 5000 we wil long & evey time Nf falls below 4950 we will short in between 4950-5000 no action required.
After long if Nf again comes down to 5000 levels we will have to square off our position similarly in short position If Nf comes above 4950 levels we have to cut our position.
Unquote
But there is a flaw here.
During intraday nifty would be moving back and forth and we can not be adjusting the positions to match this.
If we decide that towards end of day only we should act,then on the first day if Nifty closes at 5010 we would buy a lot.Next day if it closes at 4980 we have to sell incurring a loss of about 1500+brokerage.The third day it may again go to 5025 and we have to buy again!!
Do you see my point here?This would eat away all our profits
I request you to reply ASAP
Thanks,Regards,