Why we sold only CE's today ?

A small 🧵

Collaborated with @AdityaTodmal

• BNF reversed from 32155 (low made on Mar'8)

• One side rally to butcher the CE writers

• Gap up opening by ~1300 points

• From Mar'8 low till today open ~2800 point rally

• 2800 point rally in just 1.5days

• Trend on the larger TF still bearish
• Due to election results we decided no to carry any overnight positions

• Selling PE on the back of 2800 point rally would have been disastrous due to unfavorable R/R

• So we were very clear to short only CE's

• But then need to follow the trend
• We decided to short CE at the break of first 5min candle

• By 9.45 it started to reverse
• Spotted M pattern at the resistance and started shorting CE's thereafter i.e. post 12.12 hours
• Also BNF resisted at the weekly Channel BD re-test zone
• Patterns Made in BNF:

1. W pattern near lows, made on March 8,
(near 32115 lows, which is also the 1st demand zone in weekly)
https://t.co/YGMfQ6TVQt
2. Flag pattern post the BO of W pattern

https://t.co/SqLs3Ve2nU
3. M pattern near the upper levels on March 10
• Hope this helped to understand the logic for shorting only CE's in today's expiry

• If you found this useful, please do RT first tweet

See past 🧵 here:

@AdityaTodmal
&
@niki_poojary

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A Thread on How to NOT do blunders while selling Options. 🧵🪡

1. Never be Greedy in a High Vix Environment.

Sellers selling OTM get lured by higher premiums and sell near ATM or more than they usually do, this will burn your hand as High premiums also mean that you will end up giving higher premium back than usual as soom as it spikes.


2. Hope

Hope drives a man crazy and this is true for trading the most, hoping for a reversal to cut the pain. Humans have a tendency to avoid the pain and one does not accept the pain by not booking a loss

Tom Hougaard explains this well below.

https://t.co/zDbDT2hdej


3. Not having a setup in non directional Selling

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4. Getting Egoistic

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You are a trader think like one and remain one trading a certain way does not make you better.

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