I am going to paper trade nifty stradle buy/sell here fo 6 montha and based on the results will do actual trades
Straddle : Call/Put of same strike price
Stangle : Call/Put of ifferent strike price
Strategy 1:
Sell nifty straddle 5 sessions before expiry of prev month. For Feb, you need to trade this around 22nd jan (aound 5 sessions before curent month expiry). Stop loss 50% of investment, target 50% of investment. You need to do this close to present maket rate to get equal premium on both legs
on 22nd jan , sell for 2700 feb series
Call : 157
Put : 170
Covered in 2373 - 3027 nifty
Need 2 times margin
Strategy 2:
Buy nifty straddle 5 sessions after the start of curent series . For Feb series, buy around 5th Feb. Stop loss 50% of investment, target 50% of investment. You need to do this close to present maket rate to get equal premium on both legs
Its possible you may end up squaring off these trades in 2nd strategy against 1st if there is no movement in nifty or its avaialble to same strike after 10 sessions. I am traking both these stategies independantly to see which one is better.
I will also log the highest/lowest combine premiums fo both strategies even though our sl/target is 50% of investment
Pl be aware for selling options you need to maintain margin of nifty and carries UNLIMITED risk, even though we have 50% stop-loss, due to high gap up/down our stoploss may be useless. Also you can consider selling strangles for Strategy 1 to incease your range. You can also consider far month, but longer the time frame, higher is your risk
PL DO NOT TRADE THESE , WE ARE DOING IT ON PAPER ONLY
Straddle : Call/Put of same strike price
Stangle : Call/Put of ifferent strike price
Strategy 1:
Sell nifty straddle 5 sessions before expiry of prev month. For Feb, you need to trade this around 22nd jan (aound 5 sessions before curent month expiry). Stop loss 50% of investment, target 50% of investment. You need to do this close to present maket rate to get equal premium on both legs
on 22nd jan , sell for 2700 feb series
Call : 157
Put : 170
Covered in 2373 - 3027 nifty
Need 2 times margin
Strategy 2:
Buy nifty straddle 5 sessions after the start of curent series . For Feb series, buy around 5th Feb. Stop loss 50% of investment, target 50% of investment. You need to do this close to present maket rate to get equal premium on both legs
Its possible you may end up squaring off these trades in 2nd strategy against 1st if there is no movement in nifty or its avaialble to same strike after 10 sessions. I am traking both these stategies independantly to see which one is better.
I will also log the highest/lowest combine premiums fo both strategies even though our sl/target is 50% of investment
Pl be aware for selling options you need to maintain margin of nifty and carries UNLIMITED risk, even though we have 50% stop-loss, due to high gap up/down our stoploss may be useless. Also you can consider selling strangles for Strategy 1 to incease your range. You can also consider far month, but longer the time frame, higher is your risk
PL DO NOT TRADE THESE , WE ARE DOING IT ON PAPER ONLY