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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