Strategy description

Strategy Name: Zeta Index Positional (ZIP)

Strategy Overview:

ZIP is a positional strategy that trades directional option spreads in Sensex and Nifty using a single weekly counter. The strategy may not be compatible with brokers that restrict OTM strikes beyond certain ranges (+/-1500 in Sensex, +/-600 in Nifty). Users should verify with their broker before deploying. We also recommend a paper trade period of 1-2 weeks to observe the strategy in action before live deployment.

• Order Type: NRML
• Stop Loss per Leg: Defined as a percentage of entry price
• Target per Leg: 65% of entry price
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How ZIP Works

• Approach: ZIP is a positional strategy where positions are designed to benefit from both delta moves and theta decay. It’s structured to respond to trending market conditions and to avoid congestion.
• Execution: The strategy applies a fixed SL as a percentage of each leg’s entry price, with a target percentage determined through backtesting to optimize returns.
• Objective: Positions are maintained with patience, allowing for gradual theta decay and the possibility of gains from delta movements.
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User Guidelines

To Get Started:

1. Deploy and Observe: Start by setting ZIP in paper trade mode for one week to develop a comfortable understanding of the strategy.
2. Allow Positions to Run: This strategy is meant to capture gradual theta decay. Be patient and give it time to adjust positions based on predefined criteria. The strategy runs from the beginning to the end of each weekly expiry cycle.
3. Exit and Re-entry: You may choose to exit positions early if you’re satisfied with the gains. However, we recommend letting the strategy complete its weekly cycle to capture theta and delta.

Best Practices:

• Consistency: Commit to a minimum of two weeks in live trading mode before assessing the strategy’s performance.
• Avoid Interference: ZIP is structured to analyze trade conditions throughout the day, selecting positions with low noise and strategic potential.
• Risk Management: Using a multiplier of 1x to 10x is recommended. However, ensure your capital aligns with these multipliers for effective risk management.
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Recommended Portfolio Strategy

For a smoother equity curve and reduced drawdowns, we recommend a diversified approach, combining various strategies based on your risk tolerance. Our portfolio options include:

• Gamma: Positional Option Buying Strategies
• Theta: Intraday Option Selling (Straddles/Strangles)
• Delta: Swing Positional Futures
• Zeta: Positional/Intraday Option Selling

Please reach out if you’d like assistance in constructing a strategy basket tailored to your risk appetite.

Disclaimer

Strategy One is not a SEBI-registered advisor. We assume no responsibility for any trading losses incurred while using this strategy. Please consult with a qualified financial advisor before deploying ZIP or any trading strategy. We strongly recommend paper trading ZIP for at least two weeks before live trading to understand its mechanics fully.