Strategy description

Positional Directional Spread on Weekly Options of Nifty and Monthly Options of Banknifty

This strategy is designed for consistent engagement in the market by maintaining an always-in-trade position using Nifty weekly and Bank Nifty monthly options. It focuses on capturing larger directional moves while staying aligned with confirmed trends for extended periods.

Strategy Details

1. Capital Required: ₹200,000
2. Strategy Type: Positional Directional
3. Inbuilt Hedge: Yes - Fixed Distance 1500-1000 points on Banknifty and 400-500 points on Nifty
4. Counter Configuration: Weekly Counter, exiting on Wednesdays
5. Stop Loss (%SL): Not Defined, as it is a directional spread
6. Target (%Target): Not Defined
7. Entry Time: 09:20
8. Exit Time: 15:25
9. Instruments Used: Nifty, Banknifty
10. Expiry: Weekly for Nifty, Monthly for Banknifty
11. Expected Number of Trades per Month: 140

Key Features

1. Directional Bias with Spread Protection: Employs option spreads to minimize risk while capitalizing on longer-term directional trends. Helps absorb short-term volatility and reduces the impact of unconfirmed reversals.
2. Maximizing Theta Decay: Designed to leverage the natural time decay (theta) of options, particularly in weekly and monthly contracts.
3. Focus on Big Moves: Avoids attempting to capture smaller spikes, instead focusing on sustained trends to maximize profitability.
4. Volatility Absorption: Strategically constructed to handle periods of increased volatility, allowing the position to remain resilient during uncertain market phases.

Strategy Overview

This strategy is ideal for traders looking to balance steady theta decay with the potential for significant gains during pronounced market moves. However, there could be large intraday PNL volatility due to market fluctuations.

Shared Code

ff025060-43d8-4f3e-8547-0c9f2756d0db

Disclaimer

1. This strategy has been designed with risk management in mind, but there is no guarantee of specific financial results.
2. Users should have a solid understanding of options and the associated risks before deploying this strategy in live trading.
3. Past performance is not indicative of future results. There is inherent risk in trading, and users are advised to conduct thorough research before proceeding.
4. It is strongly recommended to consult with a certified financial advisor to assess whether this strategy aligns with your financial goals and risk tolerance.