Dear All,
I'm starting this thread to track the performance of vertical spread trading in Nifty options. This strategy involves buying and selling options. There are two types - Credit spread and Debit spread. I think this type of strategy suits beginners and low risk options traders.
There is nothing new in this strategy. Basic idea is lifted from the topics discussed in below two threads -
By AW10 -
http://www.traderji.com/options/30597-low-risk-options-trading-strategy-option-spreads.html
By Dan -
http://www.traderji.com/options/66266-option-trading-danpickup.html
Setup:- If the spread is in the direction of the market we will be benefited. So its advantage if we know the market direction. This is a low risk strategy..hence even if we are wrong we will not lose much.However cutting our loss would be always good. So we need to and identify the support and resistance levels of Nifty.
Debit Spread -
Buy 1 lot ATM option and sell 1 lot OTM option.
Credit Spread -
Sell 1 lot of ATM option and Buy 1 lot OTM option
(Note - this can be ITM option and ATM option also)
All comments and suggestions are welcome.:thumb:
Thanks,
Ananth.
I'm starting this thread to track the performance of vertical spread trading in Nifty options. This strategy involves buying and selling options. There are two types - Credit spread and Debit spread. I think this type of strategy suits beginners and low risk options traders.
There is nothing new in this strategy. Basic idea is lifted from the topics discussed in below two threads -
By AW10 -
http://www.traderji.com/options/30597-low-risk-options-trading-strategy-option-spreads.html
By Dan -
http://www.traderji.com/options/66266-option-trading-danpickup.html
Setup:- If the spread is in the direction of the market we will be benefited. So its advantage if we know the market direction. This is a low risk strategy..hence even if we are wrong we will not lose much.However cutting our loss would be always good. So we need to and identify the support and resistance levels of Nifty.
Debit Spread -
Buy 1 lot ATM option and sell 1 lot OTM option.
Credit Spread -
Sell 1 lot of ATM option and Buy 1 lot OTM option
(Note - this can be ITM option and ATM option also)
All comments and suggestions are welcome.:thumb:
Thanks,
Ananth.
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