Consolidated Poll Results from Public/Trading FAQs/My Observations

Here are my observations (but not conclusion). You may have different view and interpretations.

  1. Which spread is more profitable to you? Which one you are more comfortable with?

      Jegan Observation: It is tough to book profit in horizontal as our profit depends on IV. I prefer vertical spreads more now.
2. For what time frame horizontal spread is more profitable? Mention the reasons so that others can benefits
        Jegan Observation: To me shorter one is working well as time decay fights with vega
3. What is the motive of buying options
         Jegan View: It is expected from public. Most sellers buy options only for black-swan event. For wrong view, they can adjust their positions
4. Why do you sell options?
          Jegan View: It is expected from many people. Ultimate goal is to make money that depends on draw-down. I chose selling because of less draw-down.
5. Do you consider volume in ?
Jegan View: Most successful trend-follower do not look at the volume. It is true that winrate will increase, but tough to capture the price based on volume.  For large cap, one can do price action alone.
6. How do you book profit in ?
Jegan View: If you do not trail it, it is not trendfollowing. We can never know the target for trend.
7. Do you hedge your positions in ?
Jegan View: True that most (even) successful trend followers do not hedge their positions because they eye on trend, not in hedge. One should hedge with Collar or buying CE or PE. I personally do not prefer covered call or PE as RR is not good
8. What type of speculation you do?
Jegan View: Most people are break-out traders as RR is good. Personally I do not prefer mean reversion also as you are not capturing the big run. Pull-back will have more win-rate. Need to explore.
9. What is profitable more in long run? Assume that you have hedging for overnight risk?
Jegan View: It is illusion that strangle are better than straddle, but reality straddle will keep more profit. However draw-downs are more in straddle, hence one should learn how to adjust in straddle to get more profit.
10. In which script do you do ?
Jegan: Logically stocks will trend more than index, but liquidity and hedging are the major problems with stocks. Personally I love to do with indices as I can take counter strategy against my trend following positions.
11. Do you do adjustments in option selling?
Jegan View: It is bit surprise to see “None” here. Most option sellers are good dancers who will do adjustments. But doing lot of adjustments will provoke your impulsive behaviors. Better to have system and SL for adjustments.
12. Do you think that it is possible to make money with option buying consistently with less draw-down (20%)?
Jegan View: This answer may surprise you. I also strongly believe that you can make money in option buy because option bought at 1 and closes more than 200 in some expiry every year. This will take care of 200 SL per year (you have only 54+54 (CE+PE) weeks). The killing part is draw-down and volume size. you have to be highly disciplined (Like machine) to make consistent money with option buy.  Tough to be consistent
       Some people buy ATM/ITM options which will come under future segment in my perspective.

Jegathesan Durairaj, a mathematician by qualification, an Ex-software professional and now a full time Risk Defined Option Writer. With his Open Book Strategies, he is the most known identity in twitter as itjegan, with huge followers. He had won Zerodha 60 Day Challenge – 10 Times round-the-clock. He is one of the prime Option Writing Trainer and tutored close to 1000 members till now.

He is the Mastermind of CapitalZone – Active Option Trading where Traders can avail Trading Chart with customised indicators, FNO tools and Payoff analysis. His keynote is to provide whole FNO deets to be handy for Traders in a sole place.

Now he is taking more heed on hedging portfolio in Option Writing where we might subject to more market risk. He is streamlining his strategies often and improving perpetually. At this time unfolding ways to measure good-quality Trend Following System.

Conducting workshop in all Metro Cities (Delhi, Mumbai, Bangalore, Chennai and Coimbatore) often based on queries from Traders.

 

 

2 comments found

  1. Hello Jegan – As you mentioned straddle is more profitable than strangle , could you please let me know how and when to adjust.

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