Strategy description

Live Shared Code: 5546e95f-04f4-4f3c-a4d8-3e7b13fc2b3b

Important Note

F&O trading carries significant risk. It should not be considered a primary source of income, nor should funds be borrowed for trading purposes.

Strategy Description

• Type: MCX CrudeOil Options Selling/Writing (Intraday) in Monthly Expiry Options Contracts
• Trade Entry Timing: Paired short straddle initiated after 4 PM in CrudeOil options following the closure of NFO/NSE markets, allowing for capital reuse
• Capital Requirement: Approximately ₹5.5 lakhs per 1x LIVE AUTO deployment due to unhedged option selling
• Positioning: Shorts nearest OTM strikes (both call and put options) closest to ATM levels
• Single Counter: Only one counter is taken per day. On the first day of a new monthly expiry, it may or may not initiate a trade.
• Reactivation: Algo reactivates after 6 hours following the Universal Exit (Counter Change)
• Final Exit Time: 11:15 PM. No trades are taken on CrudeOil options expiry day, as brokers typically block trades.
• Trade Frequency: Executes 2-3 trades per day (1 trade = buy + sell), with no more than 3 trades in a day
• Market Conditions: Performs optimally in non-directional markets, though it may shift direction after squaring off one leg.
• Order Types: NRML and limit orders only (no market or MIS orders)
• Tranching: Uses a 20% tranching size with a 10-second delay per lot for entry, exit, and squaring off to manage slippage due to limited BID-ASK quantities in Market Depth.

MCX Expiry Consideration: Does not trade on options expiry day for CrudeOil contracts. As MCX has different expiry dates for options and futures, brokers may block trades during the tender period (typically 3-4 days before expiry).

Important Capital Management Guidelines

• Capital Reserve: Users are encouraged to maintain an additional 5-10% capital above the recommended amount to manage potential fluctuations during increased VIX periods.
• Token Generation: Generate tokens between 8:50 AM and 9:13 AM to reduce the likelihood of execution issues, which occur in roughly 5% of cases.
• Error Management: In the event of deployment errors, users will receive notifications via WhatsApp or a call from Tradetron. It is essential to check the notification log in the deployment interface and promptly address any issues. Errors left unresolved may halt the strategy. Assistance is available through the Telegram discussion group if needed.
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Algo Strategy Awareness

Premium-based algorithms, which do not rely on specific trading signals or indicators, may show variations in P&L across users due to differences in entry premiums. Premium discrepancies result from BID-ASK availability in Market Depth and influence SL and TG levels. As a result, one user may book profit while another does not, especially in the event of market reversals. It’s recommended to observe performance through the live shared code or via paper trades, rather than comparing results directly across users. Over time, these variations typically balance out, leading to similar P&L results.

Disclaimer

Sachin Jain Algos offers a carefully structured and tested strategy. However, please be advised that I am not a SEBI-registered advisor. This strategy should be deployed only after consultation with a financial advisor. Option trading carries inherent risk, and this strategy is recommended only for those who fully understand these risks.

Contact Information

• Email: [email protected]