opinion on future and options combined strategy

this means BE point would be Strike price -/+ the credit received for selling pair. the future price should be anywhere around this range to book profit?

I have a suggestion here to make.

Use Supertrend v 3 on hourly timeframe. Use the method of overnight holding.
Supertrend is a successful strategy with a strike rate of 40%. From year 2008 to 2011 the supertrend has generated 3722 points with 400 points profit target and SAR method. The underwater equity is of 300 points and maximum system drawdown of 1250 points.

When supertrend gives buy or sell signal initiate Iron condor with 400 points gap on either side with atleast 4 weeks to expiry.

Keep trading Supertrend as usual. Whenever one side of Iron condor is threatened, Supertrend is already holding futures in that direction to hedge short strike. Whenever 400 points profit target is hit, you can consider closing the side of iron condor which is threatened and keep the other side to expire in profit. Alternatively, you can roll down the threatened side by another 400 points (by keeping 4 weeks time to expiry).

Out of 150 signals of Supertrend, only on 20 occasions, 400 points are threatened.

I have not traded this method myself but has been under consideration for a long time.

not sure if this supertrend indicator is available on Zerodha Pi. i will look into it . thanks for your valuable suggestion. :thumb:

it is available in kite, not pi.

Say you sold the

you can not make any profit at all with this strategy.

But at same time your loss is also restricted to the extent of Slippage and Brokerage.

But this limited loss also will eat you accont in long run because you are not going to make profit of single penny in any circumstances.

say you sold 8500 call and put. above 8500 keep future long and below 8500 keep it short till the expiry. one option leg will give you profit and other losing leg will be balanced by future and behave as covered call/ put.

Sounds great in theory.But when market moves 40-50 points up and down around the strike price,the losses in futures will mount in sideways market.I have actually trades this strategy for a few months.Also did experiments such as sell call and put 500 qty and futures buy or sell 100 at 100 points gap...so that loss in future due to market going 50 points above and below the strike price will not be on full quantity...and if market goes up 100-150 points and goes down by equal amount,loss on futures will make this strategy not practical.

Worst case is when we have sold 8500 call and puts and the market goes up 30-40 points and we buy full qty of futures...and next day due to some international event market opens 150 points gap down.as the puts sold will give us losses.Here we have to book loss on futures long position and sell 150 points below the strike price.

Just mentioning the dangers in the strategy as I have traded this strategy for few months. It does not protect us in crash scenario.

Smart_trade

copypaste, it has unlimited risk, if nifty future moves against your expectation on expiry.
i go long nifty future at 8530, sold 8500 strike put 100 n 8500 strike call 130. total credit received 230. current nifty future price is 8200, the loss calculated 8200-8530-300+230=-400, other charges not included.

May be, thanks for pointing it out.