How do you trade Bank Nifty weekly options?

Feb 18th 2019 at 11:19 PM




Weekly bank nifty options have provided exceptional opportunities to trade as futures of bank nifty is still on month-to-month. I trade butterflies which suggests you'd invest in contact of one strike say one example is 23500 sell two calls of next strike in this example 23600 and buy one get in touch with of subsequent strike within this instance 23700. The most effective portion of this approach is your danger reward ratio is minimum 10 times to 25 instances in a single day and it takes place each and every week. In my whole life span of 27 years of trading I have never ever skilled this sort of danger reward ratio wherein your loss is too small say on large amount of bank nifty your worst case scenario loss is 160 rupees to 360 rupees and outcome in maximum 24 hours or perhaps intra day. This strategy would yield benefits only on Wednesday closing time or Thursday intra day. Every week it really is happening like right now. The genuine catch is you should be open to losing the premium you paid. Get much more details about nifty weekly options trading strategies


For freshers or people who can not find out direction of your industry they are able to purchase one place butterfly and one contact butterfly as industry would go either way up or down so your threat reward fairly woukd turn out to be one is always to 10 which means if even after in 10 weeks you hit suitable you might be in profit and you have to begin with only ONE LOT in which even if you acquire each contact n put butterfly your maximum danger will be less than 500 ?. After you get confidant it is possible to raise the quantity and very best component of weekly solution is you've got next week to once more trade following mastering out of your errors.


No product ever in Indian marketplace has generated so much response and no wonder it's the the single most product with maximum trading volume each day.


Apart from butterfly I trade box exactly where we calculate the doable range of bank nifty in one week and we are not concerned which side and would make profit provided that we could calculate range of bank nifty.


So we discussed 3 leg approach butterfly and 4 leg technique box. Apart from this there is two leg strategy. It is possible to trade bull spread in which you obtain one call and sell another contact using a larger strike and if marketplace moves up you'd make profit irrespective that your price tag has come or not. Suppose you purchased 26000 get in touch with and sold 26100call at existing marketplace price of say 25600, if marketplace moves from 25600 to 25700 your deal would immediately are available in profit even though it's far off out of your choice prices and also you can book profit by closing each the positions as should you continue keeping position till expiry you may end up losing your complete premium if market place closes below 26000 which features a pretty higher probability given that it truly is nevertheless 300 points away from current industry value but threat reward ratio is 1:1 so it becomes a lot more riskier in comparison to above two approaches. I am very threat averse person and my all trading strategies are with least possible calculated risk with higher risk to reward ratio.


Very same way it is possible to do bear spread in which you would purchase a place and sell a place of decrease strike price, If industry goes down you would make money irrespective your cost has reached or not provided you close each the positions prior to expiry.


You will need not wait till closing to make profit in all above deals and you Need to close the deal prior to closing time on thursday otherwise you could possibly wind up losing a substantial portion of your profit even when your price tag has come as well as your approach proved to become 100% correct due to differential treatment of security transaction tax on cash settled options wherein you would be expected to spend stt on plus positions and would not get credit of stt on sell position. For instance in above situation exactly where in you had purchased a bull spread by obtaining 26000 contact selection and selling 26100 call solution and final expiry is a lot more than 26100 signifies your max achievable profit predicament has arrived, now should you close your each positions by yourself and would get one hundred rupees but should you let it expire on its own you would find yourself paying stt on 26000 Ce as well as your profit would drop by 30% on exact same situation/ similar value just on account of stt.


Benefit of all these methods is that you might be not exposed to industry as you've purchased and you have sold exact quantity despite the fact that distinctive strike, no influence of premium as you trade by paying premium and in the same time by receiving premium so no effect even of time decay. When you trade selling naked options there's unlimited danger connected with that and when you invest in naked options you might loose as a result of time decay so within this case you will be paying and receiving each with calculated danger at all times irrespective you receive premium or spend and you are effectively aware what best/ worst outcome of approach.

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