Weekly bank nifty options have provided exclusive possibilities to trade as futures of bank nifty is still on month-to-month. I trade butterflies which signifies you’d purchase contact of one strike say as an example 23500 sell two calls of subsequent strike in this instance 23600 and buy one call of next strike within this example 23700. The most beneficial component of this technique is your threat reward ratio is minimum 10 times to 25 instances in a single day and it takes place each and every week. In my entire life span of 27 years of trading I have never ever knowledgeable this kind of danger reward ratio wherein your loss is also smaller say on large amount of bank nifty your worst case situation loss is 160 rupees to 360 rupees and outcome in maximum 24 hours or perhaps intra day. This approach would yield outcomes only on Wednesday closing time or Thursday intra day. Every single week it is actually taking place such as nowadays. The true catch is you should be open to losing the premium you paid. Get much more details about nifty weekly options
For freshers or people who can not discover direction with the marketplace they could invest in one place butterfly and one contact butterfly as industry would go either way up or down so your risk reward fairly woukd come to be one is to 10 which means if even once in 10 weeks you hit proper you happen to be in profit and also you should get started with only ONE LOT in which even if you acquire both call n put butterfly your maximum risk would be less than 500 ?. When you get confidant you can increase the quantity and greatest element of weekly option is you have subsequent week to again trade immediately after studying from 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.
Aside from butterfly I trade box where we calculate the probable selection 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 three leg strategy butterfly and 4 leg tactic box. Aside from this there is two leg tactic. You’ll be able to trade bull spread in which you purchase one contact and sell one more get in touch with using a larger strike and if market place moves up you’d make profit irrespective that your value has come or not. Suppose you purchased 26000 contact and sold 26100call at present marketplace value of say 25600, if market moves from 25600 to 25700 your deal would quickly are available in profit despite the fact that it is far off from your selection prices and you can book profit by closing both the positions as in case you continue keeping position till expiry you could possibly find yourself losing your whole premium if marketplace closes under 26000 which features a very high probability because it is nonetheless 300 points away from present market price tag but threat reward ratio is 1:1 so it becomes more riskier in comparison to above two techniques. I am very risk averse particular person and my all trading techniques are with least feasible calculated risk with greater danger to reward ratio.
Very same way you could do bear spread in which you would acquire a put and sell a place of reduced strike value, If market place goes down you would make money irrespective your cost has reached or not supplied you close both the positions ahead of expiry.
You’ll need not wait till closing to produce profit in all above deals and also you Ought to close the deal ahead of closing time on thursday otherwise you could wind up losing a substantial part of your profit even if your price has come as well as your method proved to be 100% right as a result of differential treatment of security transaction tax on cash settled options wherein you’d be necessary to spend stt on plus positions and wouldn’t get credit of stt on sell position. One example is in above situation exactly where in you had purchased a bull spread by getting 26000 call alternative and promoting 26100 call selection and final expiry is additional than 26100 indicates your max attainable profit predicament has arrived, now when you close your each positions by yourself and would get one hundred rupees but should you let it expire on its personal you’d end up paying stt on 26000 Ce as well as your profit would drop by 30% on very same situation/ very same cost just on account of stt.
Advantage of all these approaches is the fact that you might be not exposed to market place as you have purchased and you have sold exact quantity while different strike, no effect of premium as you trade by paying premium and at the very same time by getting premium so no effect even of time decay. If you trade promoting naked options there is limitless threat connected with that and for those who acquire naked options you may loose as a consequence of time decay so within this case you might be paying and receiving each with calculated threat at all times irrespective you acquire premium or spend and also you are well conscious what best/ worst outcome of approach.
