Hello ,
Interested in Credit Options Spread for passive income.
Have gone through most threads (including primarily , Sticky by AW10) and have a decent idea about Options.
Re-inforcement of Belief :
1. Options have a component of time value , and time is surely constant in the stock market , unstoppable.
2. Selling OTM Options gets us that money as against buying and expecting a move. And only to safeguard we buy another option.
3. Profitable in 4 out of 5 cases
( For BullPutSpread - Large Up , Moderate Up , Sideways , Moderate Downward)
( For BearCallSpread - Moderate Up , Sideways , Moderate Downward , Large Downward)
4. Not much research required , about Individual Stocks or disturbed by daily fluctation or small news.
5. Profit or Loss is settled within the month instead of uncertaininty over a long term in case of those investments.
Objective :
1. Return of 2-3% per month. To beat (FD-8% pa , MutualFund-12-15% pa, RealEstate-15-22% pa)
Issues :
1. I intend to create simple credit spreads at the start of the month at strike prices breakeven of 5% away from the current market price.
And let it expire.
Now , even at this price point , 5-6% away. The number of times market has not moved more than that in last ten years is 70% -
30% of the times it has moved more than 5.5%.
That doesnt seem promising. I was hoping for around 90% probability of success.
Also , at these points - the max possible loss is around 13 times the gain.
2. Determining Bullish / Bearish
As said , I am looking for minimum profit , only credit spreads. At 6% away from strike price.
Now , only criteria is to determine whether to be bearish or bullish for the month.
I am not a firm believer of TechnicalAnalysis , but nevertheless - what would be the best , simplest way to do so.
3. Large Sum of Money - 30 - 50 Lacs
Is this usable. Considering availbility to purchase at the mentioned strike prices.
Would there be enough availibility.
4. Zerodha requires approximately 40,000 per lot of shorting Nifty Options
Other Tips :
1. Any other instrument , securities
2. Suggestion - which field to work on for target of 2-3% per month
I understand , generally profits are not well quantified in the market but at least I can get a guideline.
3. Whether to go for 10 day , 20 day , 40 day durations
Appreciate , the learning from the community and response.
Thanks.
Interested in Credit Options Spread for passive income.
Have gone through most threads (including primarily , Sticky by AW10) and have a decent idea about Options.
Re-inforcement of Belief :
1. Options have a component of time value , and time is surely constant in the stock market , unstoppable.
2. Selling OTM Options gets us that money as against buying and expecting a move. And only to safeguard we buy another option.
3. Profitable in 4 out of 5 cases
( For BullPutSpread - Large Up , Moderate Up , Sideways , Moderate Downward)
( For BearCallSpread - Moderate Up , Sideways , Moderate Downward , Large Downward)
4. Not much research required , about Individual Stocks or disturbed by daily fluctation or small news.
5. Profit or Loss is settled within the month instead of uncertaininty over a long term in case of those investments.
Objective :
1. Return of 2-3% per month. To beat (FD-8% pa , MutualFund-12-15% pa, RealEstate-15-22% pa)
Issues :
1. I intend to create simple credit spreads at the start of the month at strike prices breakeven of 5% away from the current market price.
And let it expire.
Now , even at this price point , 5-6% away. The number of times market has not moved more than that in last ten years is 70% -
30% of the times it has moved more than 5.5%.
That doesnt seem promising. I was hoping for around 90% probability of success.
Also , at these points - the max possible loss is around 13 times the gain.
2. Determining Bullish / Bearish
As said , I am looking for minimum profit , only credit spreads. At 6% away from strike price.
Now , only criteria is to determine whether to be bearish or bullish for the month.
I am not a firm believer of TechnicalAnalysis , but nevertheless - what would be the best , simplest way to do so.
3. Large Sum of Money - 30 - 50 Lacs
Is this usable. Considering availbility to purchase at the mentioned strike prices.
Would there be enough availibility.
4. Zerodha requires approximately 40,000 per lot of shorting Nifty Options
Other Tips :
1. Any other instrument , securities
2. Suggestion - which field to work on for target of 2-3% per month
I understand , generally profits are not well quantified in the market but at least I can get a guideline.
3. Whether to go for 10 day , 20 day , 40 day durations
Appreciate , the learning from the community and response.
Thanks.
Credit Spreads / Standard Deviation - Advise Required
Established in 2010, Zerodha small case is known for its rebate valuing model and creative utilization of technology. It is headquartered in Bangalore and has physical nearness in all real Indian cities. As of 2017, it is the biggest markdown intermediary in India[6] and contributes up to 5% of retail exchanging volumes on Indian stock trades, producing day by day exchanging turnovers crossing $2 billion.
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