Strategy description

GOVARDHANAMU SFT5.0 Strategy

NIFTY50 Weekly Options Directional Positional Strategy

Developed by Sravya Financial Technologies

Overview

The "GOVARDHANAMU SFT5.0" is a proprietary options trading strategy designed for NIFTY50 weekly options contracts. It emphasizes disciplined entry and exit points, robust money management, and risk control to make options selling a powerful method for positional trading. Options trading is highly volatile, offering significant opportunities but requiring knowledge, clear profit targets, and stop-loss methodologies to avoid losses. This strategy addresses these challenges with precision.

Key Takeaways

1. Capital Required: ₹80,000/- for 1x deployment
2. Trading Instrument: NIFTY50 weekly options contracts
3. Trade Timing:
   1. Entry: After 9:15 AM
   2. Exit: 3:15 PM on expiry day
4. Trade Structure:
   1. Long: 2 lots of Out-of-the-Money (OTM) options with different strikes
   2. Short: 2 lots of OTM current week options
   3. Total: 3 legs in one go
5. Strike Selection: Based on NIFTY spot price
6. Maximum Loss: ₹2,500–₹3,500 per expiry week (varies by strikes)
7. Maximum Profit: ₹4,000 per expiry week
8. Rate of Return: Safer, decent returns with higher risk typical of options selling
9. Market Performance:
   1. Strong in trending markets
   2. Underperforms in sideways markets
10. Trader Involvement: Minimal market monitoring required
11. Recommendation: Conduct live paper trading for 1 month before live deployment

How It Works

1. This strategy leverages advanced techniques for perfect entries and exits:
2. Trend Detection: Instant trend-finding tools
3. Momentum Indicators: Combined with price action
4. "One of the worst mistakes intraday traders make is entering an options trade without a strategy. GOVARDHANAMU SFT5.0 is the right approach for options trading."

Risk Management & Position Sizing

Risk Management

1. Core Principle: Contain losses to protect your capital
2. Warning: Even the best strategy fails without proper risk management

Position Sizing

1. Minimum Margin: ₹80,000/- (including buffer) for 1x position
2. Scaling Up:Increase account size in multiples of ₹80,000/-
   1. ₹80,000 = 1x position
   2. ₹1,60,000 = 2x position
   3. ₹2,40,000 = 3x position

Profit-Sharing & Fees

1. Monthly Fee: ₹99/- per multiplier
2. Profit-Sharing: 20% of monthly profits (based on TradeTron platform records)
3. Billing Process:
   • Invoice issued on the 1st of the following month
   • Payment due by the 3rd
   • Non-payment results in strategy suspension until dues are cleared

Profit-Sharing Examples

Profitable Month:

1. Profit: ₹10,000
2. Share: ₹10,000 × 20% = ₹2,000

Loss Carryforward:

1. Last Month Loss: ₹5,000 (no payment)
2. This Month Profit: ₹10,000
3. Net Profit: ₹10,000 – ₹5,000 = ₹5,000
4. Share: ₹5,000 × 20% = ₹1,000

Choosing a Broker

1. Cost Consideration: Options trading can incur high brokerage fees
2. Recommendation: Opt for brokers offering zero or low brokerage to maximize returns regardless of trade volume

Disclaimer

1. Regulatory Note: We are not SEBI-registered advisors.
2. Risk: Algo trading is undertaken at your own risk.
3. No Guarantees: Past performance does not predict future results.
4. Advice: Consult a registered financial planner before live trading.
5. Trial: Conduct live paper trading for at least 1 month.