Comment on Theta

Kiran commented on 08 Mar 2019, 11:24 AM

Thank you Karthik. Yes, there is no way to backtest this as you said. I will have to manually track for opportunities. When I say underlying, I limit myself to Nifty50 or Bank nifty. I am not being stock specific. I believe no Index moves only in a particular direction (North/South) even if the long term sentiment is extremely directional. I am trying to cash in on the short term trend reversals (profit booking/bulls getting exhausted/value buying/bears getting exhausted) with considerably large volumes. As I limit my purchases to only Just OTM options, I believe they stand a good chance of ending up ATM or ITM even in a short term trend reversal (say for one or two trading sessions). I’d hold my positions as long as the short term trend is in line with my directional view, square them off once it starts moving in adverse direction. If the trade goes wrong, My stoploss will square them off before they end up extremely OTM. Am i making any sense ? Or Am i just taking a gamble ?

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