Best strategy to trade in nifty options
Though we dont have an idea of the direction, historically, the maximum change in Nifty from the budget date to the next expiry date is quite decent in either direction. So, we can fairly assume that the move post budget is going to be big as it always is.
A long straddle strategy is when you buy a Put Option and a Call Option of the same expiry and at the same strike. Yeah, offcourse, there could be a loss. But, definitely we can identify strategies with bear minimum losses and with a good potential of profit. The above depicts the Volatility and Range Expansion Nifty has witnessed in past 20 Budget session and Bank Nifty is past 10 Budget Session.
Madison County Courier
Just by going at the sheer number its looks mind boggling. So Stop Losses are must for traders on Budget day.
From IIT to intraday options on Nifty « Z-Connect by Zerodha
Traders who are weak heart having small capital till 5 lakhs and cannot digest the bout of volatility you are going to witness just stay away from market for Budget day. I know its difficult to control your emotions not to trade on such volatile day but if your caught on wrong side of trade you can lose big chunk of your capital in matter of minutes. As soon as the event is over the IV will come down drastically and there will be huge fall in Option Premium. The goal is best strategy to trade in nifty options profit if the stock moves in either direction.
Typically, a straddle will be constructed with trading option binaire boursorama call and put at-the-money ie.
Suppose Nifty is trading at so trader will eye on Call and Put. Buying both a call and a put increases the best strategy to trade in nifty options of your position, especially for a volatile stock. By having long positions in both call and put options, straddles can achieve large profits no matter which way the underlying stock price heads, provided the move is strong enough.
For a traders their is no Thumb rule that he need to keep position till Expiry even before expiry if trader is seeing profit in the position can exit the trade. Follow on Facebook https: Like Us to Get Real Time Update.
Bramesh's Technical Analysis Gann Price and Time Strategies Class of its own. Option Trading Strategy for Union Budget By Bramesh January 29, Price of Underlying — Strike Price of Long Call — Net Premium Paid Strike Price of Long Put — Price of Underlying — Net Premium Paid Loss Calculation: On expiration in Feb if Nifty is still trading atboth the Feb put and the Feb call expire worthless and the long straddle trader suffers a maximum loss which is equal to the initial debit of Rs taken to enter the trade.
If you are interested you can LIKE the page to get Real Time Updates.
Leave a Reply Cancel reply document. Bramesh contributes actively to the renowned Futures Magazine,Chicago and Hispatrading Spanish Magazine Read All the Articles By Bramesh in Futures Magazine. All readers of this site must rely on their own discretion and consult their own investment adviser.
Iconic One Theme Powered by Wordpress.