NIFTY - 03 Dec 2020 Expiry Strategy01 (Closed with profit)

 

Disclaimer: Investing in stocks/mutual funds or any other instruments are subject to market risks. Any strategies or trades that are described here are only for educational purpose. Please do your own research or consult your financial advisor before investing.

 

THE STRATEGY (DATE: 25 Nov 2020)

This strategy is based on calendar spread where we choose strikes from two different expiry weeks.

Shorting will be done in the upcoming week expiry and hedging in the week next to that.

 

THE SET UP

1) Sell 03DEC2020 13400CE@20.35 (2 lots in the below example)

2) Buy 10NOV2020 13500CE@34 (1 lot in the below example)

3) Sell 03DEC2020 12400PE@19.15 (2 lots in the below example).

4) Buy 10NOV2020 12100PE@22.45 (2 lots in the below example)

 

MARGIN REQUIRED --> ~1,85,000 INR

 

EXPECTED MAX PROFIT --> ~2500 INR 

  

** RISK MANAGEMENT - EXIT CRITERIA --> Close the position if loss is 3% of the invested capital **

 

PAYOFF GRAPH

 

RESULT (Update for 02 Dec 2020)

Below is the premium for the day ending 02 Dec 2020.

1) Sell 03DEC2020 13400CE@1.20

2) Buy 10NOV2020 13500CE@16.90

3) Sell 03DEC2020 12400PE@0.65

4) Buy 10NOV2020 12100PE@2.75

 

Total profit = 1410 INR (~0.7% ROI).

(Please Note: The above profit is inclusive of brokerage and other charges).

Exit the position on 03 Dec 2020. Profit is OK since we waited till expiry day, should have exited much earlier.

 

 

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Account opening links:

To open account with zerodha, click here --> https://zerodha.com/?c=BR8317

 

To open account with angel broking, click here --> https://tinyurl.com/y3pqj339

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Stock Options - 26 Nov 2020 Expiry Strategy 03 (Closed with profit)

Disclaimer: Investing in stocks/mutual funds or any other instruments are subject to market risks. Any strategies or trades that are described here are only for educational purpose. Please do your own research or consult your financial advisor before investing.

 

THE STRATEGY (Date: 22 Nov 2020)

Based on the analysis of stock Tata Motors, the stock is expected to stay neutral to bearish for rest of Nov 2020. Put a covered call (learn more) using the below setup.

 

THE SET UP

1) Sell 26NOV2020 185CE@1 (1 lot = 5700)

2) Buy 26NOV2020 205CE@0.25

 

MARGIN REQUIRED --> ~2,00,000 INR

 

EXPECTED MAX PROFIT --> ~4000- (Expecting the stock to trade below 185 by end of Nov 2020). The stock has remained neutral to bearish through the month/week/day trends.

 

** RISK MANAGEMENT - EXIT CRITERIA --> Exit the position if loss is ~2% of the invested capital.**

 

 PAYOFF GRAPH

 

RESULT (Update for 25 Nov 2020)

Below is the premium for the day ending 25 Nov 2020.

1) Sell 26NOV2020 185CE@0.10 (1 lot = 5700)

2) Buy 26NOV2020 205CE@0.05

 

Total profit = (0.70) *5700 = 3390 INR (~1.9% ROI).

(Please Note: The above profit is inclusive of brokerage and other charges).

Exit the position on 26 Nov 2020.

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Account opening links:

To open account with zerodha, click here --> https://zerodha.com/?c=BR8317

 

To open account with angel broking, click here --> https://tinyurl.com/y3pqj339

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Stock Options - 26 Nov 2020 Expiry Strategy 02 (Closed with profit)

Disclaimer: Investing in stocks/mutual funds or any other instruments are subject to market risks. Any strategies or trades that are described here are only for educational purpose. Please do your own research or consult your financial advisor before investing.

 

THE STRATEGY (Date: 15 Nov 2020)

Based on the analysis of stock Adani Ports, the stock is expected to stay neutral for the rest of Nov 2020. Put an iron condor using the below setup.

 

THE SET UP

1) Sell 26NOV2020 330PE@3 (1 lot = 2500)

2) Buy 26NOV2020 310PE@0.95

3) Sell 26NOV2020 395CE@3.8

4) Buy 26NOV2020 420CE@1.2

 

MARGIN REQUIRED --> ~2,55,000 INR

 

EXPECTED MAX PROFIT --> ~11500- (Expecting the stock to trade above 330 and 390 by end of Nov 2020). The stock has remained neutral through the month/week.

 

** RISK MANAGEMENT - EXIT CRITERIA --> Exit the position if loss is ~3% of the invested capital.**

 

 PAYOFF GRAPH

 

RESULT (Update for 20 Nov 2020)

Below is the premium for the day ending 17 Nov 2020.

1) Sell 26NOV2020 330PE@0.25

2) Buy 26NOV2020 310PE@0

3) Sell 26NOV2020 395CE@3.15

4) Buy 26NOV2020 420CE@0.90

 

Total profit = (2.2) *2500 = 5500 INR (~2.1% ROI).

(Please Note: The above profit is inclusive of brokerage and other charges).

Exit the position on 20 Nov 2020. Profit is good and but you can wait till 26 Nov too.

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Account opening links:

To open account with zerodha, click here --> https://zerodha.com/?c=BR8317

 

To open account with angel broking, click here --> https://tinyurl.com/y3pqj339

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Stock Options - 26 Nov 2020 Expiry Strategy 01 (Closed with profit)

Disclaimer: Investing in stocks/mutual funds or any other instruments are subject to market risks. Any strategies or trades that are described here are only for educational purpose. Please do your own research or consult your financial advisor before investing.

 

THE STRATEGY (Date: 13 Nov 2020)

Based on the analysis of stock PFC (Power Finance Corporation), the stock is expected to stay bullish for the rest of Nov 2020. Put a vertical spread by selling a put and hedge the position by buying a put.

 

THE SET UP

1) Sell 26NOV2020 95PE@0.6 (1 lot = 6200)

2) Buy 26NOV2020 87.5PE @0.1

MARGIN REQUIRED --> ~54000 INR

 

EXPECTED MAX PROFIT --> ~3000- (Expecting the stock to trade above 95 by end of Nov 2020). The stock has remained bullish through the month/week/day.

 

** RISK MANAGEMENT - EXIT CRITERIA --> Exit the position if loss is ~3% of the invested capital.**

 

 PAYOFF GRAPH

 

RESULT (Update for 17 Nov 2020)

Below is the premium for the day ending 17 Nov 2020.

1) Sell 26NOV2020 95PE@0.25

2) Buy 26NOV2020 87.5PE @0.1

 

Total profit = (0.6-0.25) *6200 = 2170 INR (~4% ROI).

(Please Note: The above profit is inclusive of brokerage and other charges).

Exit the position on 18 Nov 2020. Profit is good and no need to wait till 26 Nov.

 

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Account opening links:

To open account with zerodha, click here --> https://zerodha.com/?c=BR8317

 

To open account with angel broking, click here --> https://tinyurl.com/y3pqj339

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NIFTY - 12 Nov 2020 Expiry Day Strategy (Closed with profit)

Disclaimer: Investing in stocks/mutual funds or any other instruments are subject to market risks. Any strategies or trades that are described here are only for educational purpose. Please do your own research or consult your financial advisor before investing.

 

THE STRATEGY (DATE: 12 Nov 2020)

Based on the Open Interest chart carefully choose strikes which are little near the money.

Put a simple vertical spread on the PE or CE side with a premium of close to ~3-4 INR. Also hedge the position on PE or CE side with a premium of 0.5 to 1 INR.

This is ideal for expiry days. 

THE SET UP

1) Sell 12NOV2020 12500PE @2.85 (31 lots in the below example)

2) Sell 12NOV2020 12450PE @1.45 (20 lots in the below example)

3) Buy 12NOV2020 12250PE @0.6 (Hedging position, 51 lots in the below example).

 

MARGIN REQUIRED --> ~200000 INR

 

EXPECTED MAX PROFIT --> ~6000 - (Expecting the markets to be in a range between 12600 and 12800).

 

** RISK MANAGEMENT - EXIT CRITERIA --> Rarely you will get a loss, since it is expiry day and all OTM positions will go worthless. Caution - Please watch the OI change closely for any sudden moves.**

 

Result from the trade placed on 12/11/202

 

Profit --> ~6000 INR (~3%)

 

 

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Account opening links:

To open account with zerodha, click here --> https://zerodha.com/?c=BR8317

 

To open account with angel broking, click here --> https://tinyurl.com/y3pqj339

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NIFTY - 12 Nov 2020 Weekly Expiry Strategy03 (Closed with profit)

Disclaimer: Investing in stocks/mutual funds or any other instruments are subject to market risks. Any strategies or trades that are described here are only for educational purpose. Please do your own research or consult your financial advisor before investing.

 

THE STRATEGY (DATE: 11 Nov 2020)

Put a simple short strangle by choosing a premium of 10-15 INR on the put and call side. No need to hedge the position but ensure you take the position around 10AM (the first 30-45 mins, NIFTY would have already moved and will be getting ready to consolidate into a range.

This is ideal for Wednesdays since Theta decay will benefit us.

 

THE SET UP

1) Sell 12NOV2020 12950CE @11.75

2) Sell 12NOV2020 12400PE @10.55

 

MARGIN REQUIRED --> ~75000 INR

 

EXPECTED MAX PROFIT --> Min of ~1500 - (Expecting the markets to be in a range between 10AM - 12PM on Wednesdays)

 

** RISK MANAGEMENT - EXIT CRITERIA --> Close the position if loss is 3% of the invested capital **

 

Result from the trade placed on 11/11/2020

 

Profit --> 1286 INR (~1.7%)

 

 

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Account opening links:

To open account with zerodha, click here --> https://zerodha.com/?c=BR8317

 

To open account with angel broking, click here --> https://tinyurl.com/y3pqj339

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Predicting NIFTY and BANKNIFTY range for the day/week/month

Disclaimer: Investing in stocks/mutual funds or any other instruments are subject to market risks. Any strategies or trades that are described here are only for educational purpose only. Please do your own research or consult your financial advisor before investing.

INTRODUCTION

This blog outlines the ways of predicting the NIFTY and BANKNIFTY range for a day/week/month. There are multiple ways of doing it; a) By looking into Open Interest chart, b) By looking into ATM premiums, c) By looking into VIX.

All the three are described below. Please note: These methods only gives a rough idea about the range and be aware that markets do depend on lot of other external factors (like some global news etc).

 

OPEN INTEREST CHART (OI CHART)

By looking into OI chart we can rough predict range of NIFTY and BANKNIFTY for a particular week.

Look for highest OI on put and call side and that forms the support and resistance for a given week. It is illustrated in the below example.

As highlighted in the above picture, NIFTY has highest OI at 12000 and 12500 strikes. So it is safe to assume that weekly range for the current week (Example here is for 12NOV2020 expiry) will be >12000 and <12500.

ATM PREMIUM FOR CALL AND PUT

Another way of predicting is by looking into the OI chart we can roughly predict the range of NIFTY and BANKNIFTY for a particular week. 

Look for the premium of ATM strikes on call and put side, add them and minus (or add for upper range) the sum from ATM strike on either side. This will give the range for the week. It is illustrated in the below example.

 

 From the above NIFTY chart, the sum of ATM strikes is 113+138 = ~250 points. Now if we deduct 250 (or add for upper range) from the ATM strike on call and put side, the NIFTY range would be; 

Lower range = 12250 - 250 = 12000

Upper range = 12250 + 250 = 12500

 

 INDIA VIX

Using INDIA VIX value we can arrive at the daily, weekly and montly range of NIFTY or BANKNIFTY. INDIA VIX value can be found here (link).

Example to calculate NIFTY range from INDIA VIX: (As of 12 NOV 2020 expiry)

1) INDIA VIX = 20.49

2) NIFTY SPOT = 12250

3) Formula = (VIX/Sqrt(T))%  -  [T = 365/N and N= No of days, For Week N = 7 and for Day N=365 and for Month N=31]

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Account opening links:

To open account with zerodha, click here --> https://zerodha.com/?c=BR8317

 

To open account with angel broking, click here --> https://tinyurl.com/y3pqj339

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NIFTY - 12 Nov 2020 Weekly Expiry Strategy02 (Exited with loss)

Disclaimer: Investing in stocks/mutual funds or any other instruments are subject to market risks. Any strategies or trades that are described here are only for educational purpose. Please do your own research or consult your financial advisor before investing.

 

THE STRATEGY (DATE: 08 Nov 2020)

Put a simple calendar spread where you are simultaneously running an OTM short put spread and an OTM short call spread. Choose a premium of close to 20 INR on either side and sell the OTM for the current week expiry. Also hedge the position by buying OTM with a premium of <10 INR (>5 and <10) for the next week expiry

 

 

THE SET UP

1) Sell 12NOV2020 11800PE @ 20.7

2) Buy 19NOV2020 11550PE @27.3

3) Sell 12NOV2020 12550CE @13.55

4) Buy 19NOV2020 12700CE @20.25

 

MARGIN REQUIRED --> ~55000 INR

EXPECTED MAX PROFIT --> Min of ~2000 and Max of ~7500 INR - (Expecting the markets will be between 11636 and 12651 at the end of expiry day - Details to calculate range can be found here (click) )

** RISK MANAGEMENT - EXIT CRITERIA --> Close the position if loss is 3% of the invested capital **

 

 

PAYOFF GRAPH

 

 

RESULT (As of 12 Nov 2020):

As mentioned in the exit criteria, position is closed since the loss crossed 3%. Loss with this strategy was ~1650 INR.

 

 

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Account opening links:

To open account with zerodha, click here --> https://zerodha.com/?c=BR8317

 

To open account with angel broking, click here --> https://tinyurl.com/y3pqj339

-------------------------------------------********************--------------------------------------------------------

 

 

NIFTY - 12 Nov 2020 Weekly Expiry Strategy01 (Exited with loss)

Disclaimer: Investing in stocks/mutual funds or any other instruments are subject to market risks. Any strategies or trades that are described here are only for educational purpose. Please do your own research or consult your financial advisor before investing.

 

THE STRATEGY (DATE: 07 Nov 2020)

Put a simple iron condor where you are simultaneously running an OTM short put spread and an OTM short call spread. Choose a premium of close to 20 INR on either side and sell the OTM. Also hedge the position by buying OTM with a premium of <10 INT (>5 and <10).

 

 

THE SET UP

1) Sell 12NOV2020 11800PE @ 20.7

2) Buy 12NOV2020 11550PE @ 9.5

3) Sell 12NOV2020 12550CE @13.55

4) Buy 12NOV2020 12700CE @ 4

 

MARGIN REQUIRED --> ~55000 INR

EXPECTED MAX PROFIT --> ~1500 INR (~2.5% ROI) - (Expecting the markets will be between 11780 and 12570 at the end of expiry day - Details to calculate range can be found here (click) )

 

** RISK MANAGEMENT - EXIT CRITERIA --> Close the position if loss is 3% of the invested capital **

 

PAYOFF GRAPH

RESULT (as of 10 Nov 2020):

Option1: Following the process of exiting if loss is 3%

As mentioned in the exit criteria, position is closed since the loss crossed 3%. Loss with this strategy was ~1650 INR.

Option2: Adjusting the positions to reduce the loss or come out with minimal profit.

•  Exit the CE position  "12550CE SELL" and add new position on PE side "SELL 12200PE @ 7.25 INR" and add a hedge with "BUY 11700PE @  3 INR".
  

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Account opening links:

To open account with zerodha, click here --> https://zerodha.com/?c=BR8317

 

To open account with angel broking, click here --> https://tinyurl.com/y3pqj339

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