I used to be testing out a method…
You purchase the deepest within the cash name possibility in NIFTY…
On including the premium worth with the strike worth you possibly can get hold of the break-even level after which you begin incomes…
The final time I attempted this I noticed that after I purchased the 20,150 strike worth name possibility which was at a premium of 3880 (approx.) the break-even level was
20150 + 3880 = 24,030
The spot worth was round 24,230…
Now with this I see that the spot worth is already above my break-even level which means I ought to be in revenue as quickly as I enter…
I examined this on sensibull & opstra & the graph and pay-off tables present the identical conclusion…
Nevertheless I’ve not tried this in an actual account with actual cash…
I attempted digital apps for testing however they present a variety of glitches & I cannot depend on them…
Earlier than placing actual cash I need to affirm if that is true or not or possibly I’m all unsuitable about this…
I searched the web however there aren’t any youtube movies on this nor there’s a concrete weblog explaining this…
Does anybody have any concept about this please assist me out I’m at nighttime right here
Could also be it could be LTP of previuos hours when the spot worth was round 24k , as it could not a lot actively traded , presumably not ask worth of vendor at the moment 24230 spot worth ,
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Askew is true. Such deep ITM choices will not be actively traded and therefore their LTP is usually many hours outdated.
I used to have comparable concepts after I began with choices. I picked ITM strangles the place the “minimal intrinsic worth” was greater than the entire premium however I might by no means purchase it on the listed premium. Such easy arbitrage alternatives gained’t exist in a fairly environment friendly market.
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Are there any adjustments you’ll recommend?
I additionally tried to purchase a put possibility with the identical mentality of getting the break-even level greater than the spot worth so I’d be in revenue alongside aspect the decision possibility which resulted in an at all times revenue hedge…
Nevertheless with the factors you say it implies that it’s not doable…
So is there something we are able to do to make this work? Possibly even one thing else we are able to do…
You can not discover exit when the development goes in opposition to you. Additionally taxes are excessive.
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I run a bot that buys strangles with round 80% “minimal intrinsic worth” in NIFTY/BANKNIFTY and waits if the index breaks the vary.
For instance, proper now, 24150CE (₹237) and 24550PE (₹243) have a complete premium of ₹480 however their complete worth can’t be lower than ₹400 on expiry. So right here your loss is restricted. However you’ll make income if NIFTY goes beneath 24070 or above 24630.
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I noticed a video during which an individual entered such deep ITM however they might not exit as a result of there was no-one to promote the choice to so he needed to wait until expiry for the choice to shut…
So what if I place a hedge and put each order varieties as intraday in order that the dealer will mechanically shut my positions?
Will this work?
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I see however what if I do that methodology on expiry day and even set it the hedge model methodology as intraday orders in order that my postions are mechanically closed by the dealer?
Firstly any possibility that’s within the cash turns into a FUTURE.Hedged ITM is kind of a FUTURE that’s hedged or an artificial fut.
The sport of choices runs on gamma, vega, thetha whereas deep ITM sport runs on reverse delta/ delta or vomma.
You may. However auto square-off comes with a small additional cost and is sort of by no means the optimum technique to exit.
Sure, the nice factor is you don’t have anything to fear- You may permit it to auto sq. off for a charge of 58 and I feel that’s the one comfort.
