Is This Option Sellers' Market ?

[DataRam]

To make the short strangle risk-free,

To this short strange, i wud like to add a position in nifty futures,
the method will be as follows:

My max profit range is 6250 to 6150.
If nifty crosses 6250 on upside i will make a long nifty fut,
If it crosses 6150 on downside i will short nifty fut,
I will not have any position in between these points.

I assume two problems:
one, if Nifty gaps up/down these levels,
two, if Nifty gaps up/down these levels, i take respective position, and nifty suddenly reverses.

seniors guide me further !!!

I agree with your viewpoint that the Gap is a real problem while deciding about entering with Futures along with the short strangle.

If a trader analyses what kind of gap has happened , especially if a runaway gap has taken place then it would be easier to take a position.

I find in this strategy that the risk of a potential big gap, opens up a greater chance of loss maybe more on the bearish side as market tend to move faster in a downtrend.

 

[nifty.trader.game]

hi

yes.it is.