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Intra-day Options Straddle Strategy on Nifty

  1. Intra-day Options Straddle Strategy on Nifty

    Click Here to open a Trading Account with "Zerodha" through us and get FREE Training on Futures and Options Trading Strategies.
    This strategy is for all those who love intra-day Options trading.

    Lets say Nifty is currently at 5000.
    • Buy one lot of 5200 Call @ 50
    • Buy one lot of 4800 Put @ 50

    Rules to be followed
    • Buy when markets are calm. Buy at around 11 AM - 12 PM. This is the only time in the day when volume is less and markets are mostly calm and settled down. 9 AM and 3:30 PM are times when people rush into buying and spike up options premium.
    • Book profits on intra-day positions at 3:25 PM if your positions are in gains. If its in slight losses, hold positions and book profits in subsequent day.
    • Buy both Call and Put at similar values. Don't buy Call lot at 90 Rs and Put lot at 60 Rs. Keep it balanced equally.
    • Only trade in current month expiry.
    • Do not trade in the last 2 weeks of expiry. This is when Options premium drop fast when markets stay flat.
    • Avoid holding positions over the weekend. Premiums could drop when markets open flat on Mondays.

    The simple logic used here is, Options premium trade at fair value between 11 AM - 12 PM and trade at spiked up values at 3:25 PM within the day. We buy at a fair value and sell at spiked up value. The straddle position ensures profits even when markets fluctuate either way.


  2. Some more Rules
    • Do not Enter and keep straddle Positions Open when Budget is Announced. Its a good idea to do straddle before and after budget. Don't keep positions open when budget is announced. Normally at 11 - 12 AM on the budget date
    • Try to enter into positions when markets are calm and exit on spikes.
    • Keep intra-day profit targets at 10% when Nifty trades within strike price range.
    • When you exit, exit positions completely.

  3. Dear Manikantan,
    When I exit I exit both the long and put? How can u get the OTM call and put at the same price? eg:@50.
    Thanks

  4. Quote Originally Posted by mar23 View Post
    Dear Manikantan,
    When I exit I exit both the long and put? How can u get the OTM call and put at the same price? eg:@50.
    Thanks
    You may not get to exit both at same price. But, if both put together, you make profits ... That's all you need ...

    Try to enter both call and put at same price ... Exit when you get profits adding both put and call together ...

    Give me an example of your entry and exit points if you need further clarity ...

    Cheers!
    Mani

  5. Hi

    This is anantha raman again regarding my option trading. assume today is 1st week of the month and nifty is trading at 5000. Purchasing 5200CE and 4800PE for example. Now let us assume that call is making profit at 3:00PM. and i exit the call. Shall i exit the put also at the same time? or keep the put for next day and how long you think ican hold this. now since i hv exited the call shall i buy another call immediatly after exited the call or shall I wait till i exit the put also.
    are u in chennai? Thanks in advance.

  6. Quote Originally Posted by mar23 View Post
    This is anantha raman again regarding my option trading. assume today is 1st week of the month and nifty is trading at 5000. Purchasing 5200CE and 4800PE for example. Now let us assume that call is making profit at 3:00PM. and i exit the call. Shall i exit the put also at the same time? or keep the put for next day and how long you think ican hold this. now since i hv exited the call shall i buy another call immediatly after exited the call or shall I wait till i exit the put also.
    are u in chennai? Thanks in advance.
    okay. Lets assume you bought 5200 CE at 80 Rs and 4800 Put at 80 Rs when Nifty is at 5000 ... Investment made is 160 in premium (160*50)

    Then, lets assume Nifty moves to 5150 in next 3 days .... 5200 CE may be at 140 and 4800 Put may be at 40 .... You holding is now worth 180 in premium, both call and put put-together. You should exit both at the same time to book profits.

    You should only exit one side, if you can recover you capital completely in one side. I am in Chennai and i am conducting a training session in Adyar on Dec 1st. I already have one confirmed attendee. You can also join if you are interested.

    To find more details about the Training, Click Here.

  7. can u explain Thomas DeMark Sequential System?

  8. Hi,
    This is Durgaa Prasad Avnii, i like this strategy very much and which one is the best to trade. in-the-money(ITM),at-the-money(ATM) or out-the-money(OTM) strike price? here same strike price is important or premium has to the same, which one is the important? and what is the difference between straddle & strangle strategy?.And is this work for writing strategy? sellcall+sellput.

  9. Quote Originally Posted by dpstavnii View Post
    Hi,
    This is Durgaa Prasad Avnii, i like this strategy very much and which one is the best to trade. in-the-money(ITM),at-the-money(ATM) or out-the-money(OTM) strike price? here same strike price is important or premium has to the same, which one is the important? and what is the difference between straddle & strangle strategy?.And is this work for writing strategy? sellcall+sellput.
    Go for equal premiums with close by contracts, rather than far away ones ... Straddle and Strangle are the same ...

    May not work for writing really ... And writing will require higher margin meaning lower profit returns ... If you want to do writing, write close to expiry and staying far is safe ... Remember that technically speaking, unlimited losses are possible in writing ...







  10. Hi Manikandan sir,

    can u please comment on this strategy.
    Is it possible 15 % returns guarnteed every month.


    Strategy:

    Investment needed: Rs.10,000
    Suitable Trading days: 1st to 20th of every month (Better to avoid last week of expiry)

    This strategy will give best returns when you expect Nifty or any stock to move either ways with big move.

    Example: Nifty Spot (5700)
    Trade: Buy Nifty Call 5800 & Nifty Put 5600.

    Say Nifty CE 5800 is 50Rs. & Nifty PE 5600 50Rs. (Just a rough figure)

    Buy 2 lots of Put & Call options, so total investment = 50*100+50*100=10,000Rs.

    If Nifty breaks resistance and keeps moving higher, Nifty CE 5800 value (Rs.50) will increase.
    If Nifty breaks support and keeps moving lower Nifty PE 5600 value (Rs.50) will decrease.

    Say if Nifty SPOT is 5500 now, then your investment value will be Nifty CE 5800==Rs.9 & Nifty PE 5600 ==Rs.120

    Total value = 9*100+120*100=Rs.12900

    Total Profit=Rs.10,000-12,900= Rs.2,900.

    Your Returns is 29%.

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