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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