Strategy description

Options Algo Strategy Description

Overview

This is an Intraday and Positional Options Trading Algo Strategy designed to capture short-term price movements and hedge against market volatility using a combination of intraday and next-week expiry options.

Strategy Logic

Initial Setup

1. Buy ₹5 OTM CE (Out-of-the-Money Call Option) for current expiry.
2. Buy ₹5 OTM PE (Out-of-the-Money Put Option) for current expiry.
3. Sell ₹20 CE and PE OTM to cover the cost. Based on trend, form either a Bull Call Spread or Bear Put Spread.
4. Sell ₹100 CE (In-the-Money or At-the-Money Call Option) for current expiry.
5. Sell ₹100 PE (In-the-Money or At-the-Money Put Option) for current expiry.
6. Buy ₹20 CE (Out-of-the-Money Call Option) for next week expiry.
7. Buy ₹20 PE (Out-of-the-Money Put Option) for next week expiry.

Target & Exit Rules

1. Target: ₹50 profit per CE/PE leg.
2. If CE touches ₹50, sell the ATM CE at ₹10 less than the current ATM price.
3. If PE touches ₹50, sell the ATM PE at ₹10 less than the current ATM price.

Stop Loss & Exit

• If CE or PE price reaches ₹280, exit the respective option (whichever hits the level first).

Next Week Expiry Management

1. Hold the ₹20 CE and ₹20 PE (next week expiry) to hedge against sudden market movement.
2. Monitor next week expiry positions for adjustments based on market trends.

Overall Intraday Target

The total intraday target is set to ₹100.

Strategy Objective

This strategy leverages both current and next-week expiry options to capture short-term price swings while maintaining protection against unexpected market moves. The combination of hedging and directional trades helps to maximize profit potential while limiting downside risk.