For someone who has never traded · Conservative · Passive

One night a week.

Your money sits in mutual funds and earns what mutual funds earn. The same money — not extra money — is pledged to your broker as margin, and once a week it takes a single, tightly-bounded position in NIFTY options: in on Monday evening, out on Tuesday morning. The other six days, nothing is at risk.

Written for someone who has money sitting idle, has heard people talk about options, and has no idea where to begin. It starts with the vocabulary and ends with the exact steps — including the five years of tested results, and the parts that lose money.

How to set it up Read the five-year backtest ↗ See the strategy ↗
+44.5% Net return, 5 years, per multiplier
7.7% Net CAGR on ₹1,25,000
−4.5% Worst drawdown of that capital
185 Nights traded in 5 years
01 · Plain English

Nine words, and then the rest is easy.

If you have savings sitting in a bank account and you have heard people talk about options without ever quite understanding what they were talking about — start here. This is the entire vocabulary the rest of the page uses. Nothing else is assumed.

NIFTY

A single number that tracks India’s 50 largest listed companies. When people say “the market went up today”, this is usually the number they mean. Everything here is a bet on that number, not on any one company.

An option

A contract that pays out only if NIFTY moves past an agreed level by an agreed date. It works like an insurance policy on the market: one side pays a premium for cover, the other side collects that premium and carries the risk.

Selling an option

Being the side that collects. You are paid up front, and you keep the money if the market stays roughly where it is. You pay out if it moves far enough. This strategy sells two options and buys two others as protection.

Expiry

Every option has a last day, after which it is simply settled and gone. NIFTY options expire every week. An option loses value fastest in its final day — and that last-day decay is exactly what this strategy is paid to absorb.

A lot

You cannot buy a single NIFTY option; the exchange sells them in fixed bundles called lots. One lot is currently 65 units. Every price on this page is for one lot of each of the four options.

Margin

Money your broker freezes while a position is open, as security. It is not a cost and it is not spent — when the position closes, it is released. This strategy freezes about ₹75,000 for eighteen hours, once a week, then hands it straight back.

Pledging

Formally offering your mutual fund units to your broker as security, so they count towards that margin. The units are not sold, they stay yours, and they keep earning the whole time. This is the trick the whole setup rests on.

Paper trading

The strategy running on real prices at the real times, with imaginary money. Every entry, every exit and every profit and loss is recorded, and none of it is real. It is free, and it is where you should start.

A multiplier

How many copies of the strategy you run at once. One multiplier is one lot of each option. Two multipliers is twice the size — twice the profit, twice the loss, twice the margin. It is the only dial you turn.

02 · The idea

One rupee, two jobs.

When you buy a liquid fund or an arbitrage fund, the money is invested and it earns. That is job one, and it is the job it would be doing anyway.

Now pledge those fund units to your broker. Pledging does not sell them and does not stop them earning — it simply lets the exchange count them as collateral. Against that collateral you get trading margin. And margin is not spent, it is blocked: put on a position, the margin is held; take the position off, the margin comes back.

So the same rupee can do a second job. Not a bigger job — a small one, deliberately sized so that a bad outcome costs a couple of percent, not a life’s savings. That second job is what the rest of this page describes.

JOB ONE

The funds earn

Liquid and arbitrage funds are the boring end of the market — short-dated, low volatility. Roughly 6% a year at the time of writing, and it varies. This is the part of your return that does not depend on any strategy working.

JOB TWO

The margin works

The pledged units become margin. One night a week that margin is used to hold a four-legged NIFTY options position for about eighteen hours. Then it is released again.

THE POINT

You do neither

The strategy is automated on Tradetron. It places the trade, it closes the trade, it skips the nights it is told to skip. There is no screen to watch and no decision to make on a Monday evening.

03 · The money

What one multiplier looks like.

Everything below is for one multiplier — ₹1,25,000. That is the smallest unit that works, because a multiplier is one lot and you cannot trade half a lot. Want to run four? Multiply every number by four. Ten? Multiply by ten. The proportions do not change, and neither does the risk per rupee.

One multiplier — how the ₹1,25,000 is split, and why
SleeveAmountWhat it is doing
Liquid fund₹50,000 Earns, and pledges as cash-equivalent collateral
Arbitrage fund₹50,000 Earns, and pledges as equity collateral
Cash in the account₹25,000 Counts towards margin at face value, and pays the daily settlement
Total₹1,25,000 One multiplier · one lot of each option

Why it is split three ways, and how much slack there is

The position blocks about ₹75,000 of margin. Cash counts towards that at face value; pledged funds count only after your broker’s haircut, which is small on liquid funds and larger on equity ones. ₹1,00,000 in funds plus ₹25,000 in cash clears ₹75,000 of margin with a wide margin of safety — and the exchange separately insists a good share of margin be cash or cash-equivalent, which is why the fund half is split between a liquid fund and an arbitrage fund rather than put in one.

That slack is not infinite. The margin moves with NIFTY — most of it is charged as a percentage of the index level — so if the market climbs a long way, the requirement climbs with it. Check the live margin on your broker’s calculator before you size anything. The headroom here is deliberate: it is what stops a rising market from turning into a margin call.

The worst a single night can cost, by construction

The bought options sit 200 points beyond the sold ones, so the most one night can take is that 200-point gap minus the premium collected. Across the five-year test that came to about ₹8,600 a night, and never more than ₹11,134 — roughly 7% to 9% of the ₹1,25,000, in one morning. It has not happened yet: the worst night in five years cost ₹3,578. But it is what the structure permits, and it is the number to size against rather than the one the backtest happened to produce.

What one multiplier earns in a year

Two sources. The fund yield is an assumption — roughly 6% a year, and it moves with interest rates. The strategy figure is not an assumption: it is the five-year tested net result divided by five.

SourcePer yearBasis
Fund yield on ₹1,00,000₹6,000 Assumed ~6%
Cash sleeve₹0 Kept idle on purpose — a deliberate drag
The strategy₹11,160 Tested net result ÷ 5
Total, before tax₹17,160 ≈13.7% on ₹1,25,000

Against that, the deepest drawdown in the five-year test was ₹5,626 — 4.5% of the ₹1,25,000, and the longest recovery ran from October 2023 to February 2025. The fund sleeve is not exposed to it and keeps earning throughout.

Understand where the 13.7% comes from

About 4.8% of it is the funds, and that part is close to dependable. The other 8.9% is a short options position, and it is not a yield — it is payment for carrying overnight risk, and it is the part that produced a year like 2024, which returned almost nothing. Note also that ₹25,000 of the ₹1,25,000 sits in cash earning nothing; that idle sleeve is what keeps the setup safe, and it costs about 1.2% a year. Both facts are the price of the same thing.

04 · The trade

Eighteen hours, four legs, a hard floor.

NIFTY options expire weekly. The day before expiry, an option’s remaining value is almost entirely time value — and time value decays fastest at the very end. The strategy sells that decay overnight, and buys insurance against the one thing that can ruin it.

Mon 15:15 Enter One day before weekly expiry, in a five-minute window near the close.
Mon night Hold The only window of exposure. Nothing can be adjusted while the market is shut.
Tue 09:20 Exit Everything closed five minutes after the open. Margin released.
Tue–Fri Flat No position. No exposure. The funds carry on earning.
Some Mondays Skipped When recent volatility is in its top fifth, the trade is not taken at all.

The four legs

Two options sold close to where NIFTY is trading, and two bought much further out. The sold options are the income. The bought options are the seatbelt — they cost part of that income, and in exchange they put a hard ceiling on how bad one night can get.

Profit and loss of the position at expiry, against where NIFTY finishes A tent shape: profit in a band around the current level, sloping into losses on either side, then flattening into a fixed maximum loss beyond the bought options at roughly 250 points either side. break-even buy PE −250 sell PE −50 NIFTY now sell CE +50 buy CE +250 profit if NIFTY stays put loss stops falling here and here
The shape of one night. Beyond roughly 250 points in either direction the line goes flat — the bought options take over, and further movement costs nothing more. This is the whole reason the setup can be called conservative: the worst case is a number you can work out in advance, not an open question.
Sell Put, ~50 points below Collects premium. Loses if NIFTY falls.
Sell Call, ~50 points above Collects premium. Loses if NIFTY rises.
Buy Put, ~250 points below Caps the loss on a crash.
Buy Call, ~250 points above Caps the loss on a gap up.

And the rules the machine follows

  1. Only the day before weekly expiry The position is opened only when the weekly expiry is exactly one day away. That is where time decay is steepest — and it is why there is at most one trade a week.
  2. Only between 15:15 and 15:20 A five-minute window — late enough that the day’s move has happened, early enough to get filled before the 15:30 close.
  3. Skip the nights that look dangerous Before entering, the strategy measures NIFTY’s recent realised volatility against its own last year of readings. If it is in the top fifth, the trade is skipped entirely. In the five-year test this filter cut the worst drawdown by roughly half.
  4. Close at 09:20 the next morning Five minutes after the open, everything is squared off — win or lose. The position is never carried into a second night.
  5. Two safety stops, rarely used If the position moves far against you while the market is open, it exits early. Overnight, when the market is shut, nothing can fire — which is exactly why the bought options matter more than the stops.
05 · The evidence

Five years, night by night.

Tested on Tradetron’s own backtest engine over minute-level NIFTY options data from 25 August 2021 to 20 August 2026 — one lot, ₹1,25,000 of capital, every fill priced from the actual tape, brokerage taken as zero and statutory charges plus 5 basis points of slippage deducted.

₹55,638 Net profit over five years, per multiplier

₹59,049 gross, less ₹3,411 of costs.

67% Of nights ended in profit

249 winning nights, 121 losing ones.

−₹3,578 Worst single night

2.9% of the capital behind one multiplier — though the structure permits about ₹8,600.

Year by year — including the flat ones

This is the part worth reading twice. The five-year average is good; the individual years are not evenly good. 2024 returned almost nothing across a whole year, and the worst twelve-month stretch in the test lost money.

YearGross P&L per multiplierNights traded
2021 (from 25 Aug)−₹1,0697 Partial year
2022+₹16,64335 Best full year
2023+₹8,16747
2024+₹16634 A whole year of nothing
2025+₹18,96442
2026 (to 20 Aug)+₹16,17820 Partial year
Five years+₹59,049 gross185 ₹55,638 net

Worst twelve months in the test

−₹3,809, or −3.0% of the strategy’s capital, for the year ending 25 October 2024. If you had started at exactly the wrong moment, that is what your first year would have looked like — while the fund sleeve carried on earning underneath it.

Deepest drawdown

−₹5,626 — 4.5% of the ₹1,25,000 behind one multiplier, and the same 4.5% however many multipliers you run. But the number that matters more is how long it lasted. It began in October 2023, bottomed in February 2024, and did not get back to its old high until February 2025. Roughly fifteen months underwater. That, not the depth, is what makes people quit.

Open the full report ↗ See the strategy ↗

The report is the raw thing, not a summary: every fill, the equity curve, the drawdowns, a cost slider you can move yourself, and the strategy’s own JSON so anyone technical can check that the tested logic is the logic that runs.

06 · The other side

What actually goes wrong.

Nothing here is a fixed return, and the phrase “sorted for life” belongs nowhere near an options position. These are the specific ways this setup loses money.

The overnight gap the main one
The position is held while the market is closed. If something happens overnight — a war, a policy shock, a global sell-off — NIFTY can open a long way from where it closed and there is no opportunity to react. The bought options cap what that costs, which is the entire reason they are there — but the capped number is about ₹8,600 per multiplier, which is more than nine months of this strategy’s average earnings, gone in one morning.
Small wins, occasional large losses
Two thirds of nights make a little. The losing third includes nights that lose several times an average win. The backtest engine’s own read on this strategy is “frequent small gains exposed to occasional large losses”. That is the honest shape of selling options, and no filter removes it — the volatility filter reduces how often you meet it, not what happens when you do.
Flat years happen
2024 returned essentially zero across a full year of trading. A year like that is not a malfunction; it is a normal draw from this distribution. If a flat year would make you abandon the setup at the bottom, the setup is not right for you — abandoning it there is how a temporary drawdown becomes a permanent loss.
A backtest is not a promise
Five years is 185 nights. That is a real sample, not a large one. The test also assumes you get filled near the traded price; on a violently moving evening you may not. And the market regime that produced these numbers — particularly the strong 2025 and 2026 — is not owed to you.
The funds are not risk-free either
Liquid and arbitrage funds are low-volatility, not no-volatility, and their yield moves with interest rates and with the futures basis. The ~6% used on this page is an assumption about the current environment, not a floor.
Pledging has its own mechanics
Pledged units are locked until you unpledge, which takes a day or so. Brokers charge a small fee per pledge request, apply their own haircuts, and maintain their own list of accepted funds. If the cash sleeve runs low and margin falls short, the broker can square off positions or invoke the pledge. Keeping the cash sleeve genuinely idle is what stops that from ever arising.
Tax is not one rate
The three sleeves are taxed differently and not all of it is the 12.5% long-term number. Arbitrage funds are taxed as equity; liquid funds are taxed differently again; and profits from options are generally treated as business income and taxed at your slab rate, with its own bookkeeping and audit thresholds. The 13.7% on this page is before tax. Ask a chartered accountant what it looks like after, for you specifically, before you size anything.
Execution is not free of friction
The test assumes zero brokerage — true on some plans, not all — and adds statutory charges and 5 basis points of slippage. Your broker, your plan, and the night’s liquidity will move that. The report has a slider so you can put in your own cost assumptions and watch the number change.

The one rule that matters more than the strategy

Run it on paper first. Tradetron will trade this in paper mode with real prices and no money for as long as you like. Watch it take a losing night. Watch it skip a Monday. When none of that surprises you any more, then decide whether to put a single multiplier behind it — and only then decide whether to add a second.

07 · Next steps

The first month costs nothing.

Nothing in steps 1 to 4 needs a broker, a rupee, or any commitment. You only fund anything once you have watched the strategy trade for a month and decided you like it.

Weeks 1–4 · No money involved
  1. Sign up on Tradetron A free account — a couple of minutes, no broker and no funds needed. The free plan already covers everything in this first phase, including paper trading.
  2. Subscribe to the strategy Open the strategy page and click Subscribe. It is free — no subscription fee, no profit share, nothing to cancel later.
  3. Deploy it in paper mode Set the multiplier to 1 and deploy as Paper Trading. It trades on real prices at the real times, with no money at risk.
  4. Watch it for a month Four or five Mondays. In that time you will probably see a losing night and a skipped one. If either bothers you, stop here — it cost you nothing, and that is the whole point of doing it this way.
Only if you liked what you saw
  1. Fund a broker account Per multiplier: ₹50,000 into a liquid fund and ₹50,000 into an arbitrage fund — both from your broker’s accepted-collateral list — plus ₹25,000 kept as cash in the trading account. ₹1,25,000 in total. Check your broker’s live margin for the position before you size it; it moves with the index.
  2. Pledge the fund units for margin Through your broker’s pledge flow. It takes a day or two, and the units keep earning the whole time.
  3. Move to the Starter plan — ₹300 a month The free plan runs paper trading, but placing real orders automatically needs a paid plan. Starter is the smallest one and it is all this needs: ₹300 a month, or ₹3,000 for the year — one live deployment, one broker. One deployment is all you ever need here, because the multiplier sits inside it: the same ₹300 covers you at 1× and at 10×. Being straight about the arithmetic, though — the strategy averaged about ₹930 a month per multiplier in the test, so at a single multiplier the plan takes roughly a third of it. That ratio improves the moment you add a second.
  4. Email support@tradetron.tech and let them do the rest Tell them you want to connect your broker to your Tradetron account and take this strategy live. They will walk you through the broker connection and the switch from paper to live — you do not have to work out the plumbing yourself.
  5. Go live at 1×. Not four. One multiplier to begin with — ₹1,25,000. Add more later, deliberately, once you have watched your own money do this and know how it feels. Every multiplier you add is another ₹1,25,000 and another copy of the same risk.

Stuck at any step?

Write to support@tradetron.tech. Signing up, subscribing, paper-deploying, choosing a plan, connecting a broker, going live — all of it is something the support team does with people every day. There is no step here you are expected to work out alone, and asking costs nothing.

Start on paper. It costs nothing and it tells you everything.

The strategy, the backtest and the platform are all open for you to inspect before you commit a rupee. Read the report first — especially the losing months. Then sign up, subscribe, and let it trade on paper for a month before you decide anything.

Create a Tradetron account See the strategy ↗ Read the backtest ↗
08 · For the tinkerers

It is not a black box. Take it apart.

Everything above is written for someone starting out. If you are the other kind of reader — the one who wants to know what happens if the wings go to 300 points, or if it enters two days before expiry instead of one — the strategy is open. You can copy it and change it, and none of that touches the original or anyone else’s copy.

  1. Hit Duplicate on the strategy page You get your own editable template. Every part of the logic is visible and yours to change: the one-day-before-expiry entry gate, the strike offsets, both exit times, the volatility filter and the Python that computes it.
  2. Change it in plain English, with Claude Tradetron has an MCP server that connects Claude directly to your account. You describe the change in a sentence — “move the long strikes to 300 points and re-test” — and it edits your copy, validates it against the real keyword definitions, and tells you what it did. No code, and no hunting through the builder UI.
  3. Backtest it before you believe it Ask for a backtest from the same conversation and you get the report you have already seen on this page — equity curve, drawdowns, every fill, a cost slider. Compare it against the numbers here. Most changes make things worse; that is the useful part.
  4. Then paper-trade your version, exactly as above A variant that backtests well is a hypothesis, not a result. Run it on paper for a month first, the same as you would the original.

Worth reading first

One idea, thirteen versions is a full transcript of exactly this loop — a trading idea described in a sentence, built, tested, thrown away, inverted and rebuilt thirteen times, with the numbers at every fork that decided what survived. It is the honest version of what “build a strategy with AI” actually looks like. The tool list is what Claude can reach in your account, and the universe page covers what can be traded.

One caution. A duplicated template is yours — edits to it never reach the original or anyone who subscribed to it. That also means nobody is checking your version. The tested numbers on this page describe the strategy as published; the moment you change something, they describe a strategy you no longer own the evidence for.

Important

This page is educational and is not investment advice. Tradetron is an automation platform, not a broker, an investment adviser or a research analyst, and nothing here is a recommendation to buy, sell or hold any security or to adopt any strategy. It has not been tailored to your financial position, your goals or your risk tolerance.

Every figure on this page comes from a backtest of past data. Backtested results are hypothetical, carry the benefit of hindsight, and do not represent actual trading. Past performance is not indicative of future results. Trading in derivatives involves substantial risk of loss, including loss in excess of the amounts shown here, and is not suitable for every investor. Mutual fund investments are subject to market risks — read all scheme-related documents carefully. Pledging, haircuts, margin requirements, accepted collateral and charges are set by your broker and the exchanges and can change without notice. Tax treatment depends on your individual circumstances and on law that changes.

Please make your own assessment, and consult a SEBI-registered investment adviser and a qualified tax professional before acting on anything described here.