Thoughts in Trading

#1
Hello Traderji Members,
I am new to this site. I like to share my new trading thought.May be aware to you. but response needed . is it worth following

Strategy
whenever nifty future premium is maximum ie >30

Short Nifty future and Buy Deep ITM Call optons.

Approximately same margin for both legs.

Cover back both positions whenever future premium is nil.

I Think monthly returns worth 5- 10% is possible.
please share your comments

Renjith Paul
 
#2
Hello Traderji Members,
I am new to this site. I like to share my new trading thought.May be aware to you. but response needed . is it worth following

Strategy
whenever nifty future premium is maximum ie >30

Short Nifty future and Buy Deep ITM Call optons.

Approximately same margin for both legs.

Cover back both positions whenever future premium is nil.

I Think monthly returns worth 5- 10% is possible.
please share your comments

Renjith Paul
Try that with real premiums. In the money calls premiums are as per Nifty futures and not Nifty index. You will not get any difference to make it worthwhile.

Smart_trade
 
#4
But towards expiry ITM's will be almost following index itself isn't it.
Let me give you an example. Suppose Nifty Index value is 5900 and Nifty Futures value is 5930. You will short at 5930 and buy a Deep in the money call of say 5600. This call will be priced at 330-332 and not at 300.

when price in the end converges, and Nifty and Nifty fut both at 5900 you will make profit of 30 in short future....but the call will be trading at 300 so loss of 30 points there....so it cancels out .

Smart_trade
 

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