created : 2 weeks ago| | live deployment: 1
Strategy description
Nifty Weekly Positional AIVCN1
Delta-Based Weekly Option Spread Strategy:
Recommended to start deploying this strategy on the first day of new expiry (Friday) to capture good momentum, theta and expected results.
Overview and Purpose
This is a systematic, delta-based weekly options spread strategy applied primarily to Nifty options. It is designed to capture time-value decay and market moves within the weekly cycle. The strategy appeals to investors preferring algorithmic or less hands-on trading with strong risk management and a focus on consistent gains.
Target Users
- Investors seeking systematic, low-effort options income
- Suitable for both trending, range-bound, and volatile market conditions
Core Trading Framework
| Parameter | Details |
|---|---|
| Initiation (First Day of Weekly Expiry) | Buy 2 lots each of ITM Calls and Puts Sell 4 lots each of OTM Calls and Puts Hedge with 2 lots each of deep OTM Calls and Puts |
| Initial Capital | ₹5,00,000 per multiplier (keep 10% extra more margin to avoid peak margin issues) |
| Exit Strategy | Close positions at a 2.5–4% target or a maximum 1% weekly loss |
| Adjustment Triggers | Adjust when a leg nears its SL, profit target, or delta breach; capture 50–70% of targets |
| Drawdown Control | Maximum weekly drawdown capped by hedging and systematic stop-losses |
Investor Benefits
- Defined Downside: Fully hedged to cap potential losses
- Active De-Risking: Partial profit-booking and tactical adjustments reduce risk exposure
- Minimal Monitoring: Requires brief daily reviews, not continuous screen time
Risks and Mitigations
| Key Risk | Mitigation |
|---|---|
| Overnight/Weekend Gaps | Deep OTM hedges limit exposure |
| Volatility Spikes | End-of-day stop-loss and profit-booking |
| Liquidity/Slippage | Only trade highly liquid index instruments |
Compounding Illustration
The strategy’s value compounds over time due to regular reinvestment of profits—a demonstration of patience leading.
