Earn Regular Income From this EXPIRY DAY Option Trading strategy | Intraday Option Trading Strategy
Hello friends. Welcome to Day Trade Telugu the option strategy that I'll be talking about in today's video can be used for Intraday and risk will be very low and if you get a loss in the worst case, you can easily convert to neutral most of the chances will be to exit the strategy without the loss dor that, we need to take only some simple adjustments In recent times, VIX is very less. so, even small option premiums are very volatile this strategy is for people who are thinking that there is no scope for adjustment either we'll be in the profit or we'll end up in neutral through this strategy if you are a beginner, don't start this with the money even this strategy is safe at least, paper trade for 4 weeks so that you can avoid doing the same mistakes in the market that experience will make you better I want to talk about the content part and non-content part as well if you want to skip the non-content, skip it to the time displayed on the screen the time is almost 5am It's Saturday and I'll upload this video today I've recorded it and while editing it I noticed the video was a little dull because in the last 2 days, we've uploaded 2 videos every day in the other channel and the work related to it was started from the beginning of the week so, we postponed recording this video in this channel there were a lot of IPO updates and after completing them, If I had touched another IPO video I couldn't be able to upload the video to this channel ao, kept the IPO's aside because some of our channel's followers were deeply connected to the content of this channel I took a gap last week and it wouldn't be right to take a gap this week too immediately after finishing the IPO's, I started working on this video there was very limited rest to us that's why this video has a dull voice over try to avoid the dull voice in this video and focus on the content one more thing. I'm not alone to do this work My brother and I work with equal efforts for the content provided in this video after the trading, we plan to make videos and think about the format of teaching and everything If my brother isn't available, there is no chance I would've made it myself because while I was studying RHP and all, the content related to this channel was provided by my brother so, Day Trader Telugu means, you may hear the voice of Revanth but the efforts are from both Revanth and Lekhanth let's get to the video now we use this strategy when we think the market in the necessary range like going up or going down or staying there for a while or even staying at the same point for a month. when we have this kind of view
then, from this strategy, we can get better returns for example, in the recent times, Bank Nifty was repeatedly in 15500 and 16000 as long as it is maintained in this range we can follow this strategy and mostly there won't be any loss and if this range breaks out, with a very small and simple adjustment we can recover our loss and exit with neutral you can exit at zero, including the charges like brokerage, tax and all, including everything. by this strategy, we can exit either at zero or at a profit this is a low-risk strategy listen to it carefully. I'll explain it point by point even with a base strategy, without any adjustments, we'll need Rs.35,000
If you observe, all of our videos are in a sequence there is a link between every strategy. This is the link to IronFly in the last video if you think how just take a look here. The previously discussed IronFly is Nifty was trading at 15800 the Call and Put at the money is sold and at some distance, we'll buy the Call and Put which is the IronFly In childhood, in mathematics, we took a=b, b=c or x=y to change the equations similarly, we have both Put and Call in the IronFly we combine both the Calls and Puts instead of it, either by replacing Put by Call or by replacing Call by Put C=P, that is, Call=Put is the required equation for us and If we consider it we'll sell both Calls at the money or or we'll sell both Puts at the money from the point of selling, we'd go to a distance and buy Calls if we sold Calls or buy Puts if we sold Puts this is called the Long Butterfly strategy we can apply this strategy by taking either Calls or Puts there is no rule to take only a particular one so, you should select the Call or Put at the money Initially, sell both of them. If you buy a Call at the downside and a Call at the upside, you have formed the strategy the important question here is at the money, is known to everyone that the point at trading is called at the money what is the distance required to go for on the upside and downside? is it 100 or 200 or 300? how far should I have to go? remember this very simply, for Nifty or Bank Nifty, when you sell it at the money if you sold 190, 190 is between the 100 and 200, which are the multiples of 100 you must always select the round off number on the top side so the round off number here is 200 this was easy but if you are selling at 110 which is also between 100 and 200 we normally round off at 100 but we must round off at 200 only so, whenever you are selling, you should take the topside's 100, which should be a multiple of 100 for example, If the Bank Nifty is at 310 we must round off at 400 so after rounding it off the 190 we took 200. so, we go to a distance of 200 points and buy them suppose, we sold 310 Bank Nifty and rounding it off we get 400 we will buy the option at a distance of 400 points I'll explain it multiple times in the same video so that you can remember it well so that there is no need to spend time here so, when should we enter this strategy? Start this at 9:20am. add everything to your watchlist at 9:20am
what should do on the other days if I had to do this only on expiry day? actually, this is a monthly strategy so every last Thursday of the month on that thursday, we'll form the strategy for the next month to form the strategy for july, we'll take the last Thursday of June on that month's expiry then we place the orders related to july contracts we have the entry and now we must talk about exit and adjustments Adjustments are very simple. there is no need for hardwork there is no need to be confused so we'll first take about the exit and then strategy and after then we'll talk about adjustments exit should be 30% of premium We have to take one of the Call premium's 30% don't expect more than that either Intraday or delivery, it must be 30% don't think about 30% being less value in Intraday we'll get 2-3% if there are no adjustments monthly, you can get 13-14% returns I'll explain everything with the examples too try to keep this in mind. It should be maximum of 30% If you are satisfied with it, you can exit even at 10% or 20% if you are comfortable the profits you can happily exit 10% or 20% but never go beyond 30% as it must be the maximum If you wait for 40% or 50% or even 60% the scope of making adjustments will be very high if you go to 40% or 50%, the time taken to decay will increase at that moment, market may change its direction and forces you to make adjustments when you make adjustments most of the time you'll end up in neutral without any profits to improve your success rate, keep the maximum margin as 30% It is the maximum, so you shouldn't be waiting for 30% you can exit at even 10% or 20% but if you are expecting 30%, you are also adding the risk risk means exiting in the neutral without profits this last expiry was recorded by us to show you all in this video after showing it, I'll explain the monthly strategies of Nifty and Bank Nifty observe the time, it is 9:18am I've started recording the screen even before 9:20am observe the Bank Nifty 34700, the top value is the Bank Nifty spot price but the difference I'm trying to tell you is on normal days, take future as the reference on the expiry day, take spot as the reference remember this difference on what basis should we build our strategy? on expiry day, spot and on remaining days, future so, as it is monthly expiry, the spot is at 34700 so, based on it, the Call at the money is sold and based on the premium from that I'll buy at some distance 34700 Call, as it is nearly 130 I'm rounding it off to 200 34500 Call is added also 34900 after this, to execute everything we have to place a basket order when we go to orders, beside GTT there are baskets click the basket and name it and place them in that basket after naming it, all the strategies are placed in it like, we should sell two 34700 Calls so I'm adding 2 quantities and Bank Nifty at 50 quantity so after that, I've to buy 34500 Call and 34900 Call adding both of them there is an add button below. after adding all of them we must execute the strategy adding 34900 Call added it so, look at the bottom when you swipe everything is executed at a time everything is completed and strategy is completed successfully we can see our positions here present, Bank Nifty is at 34720-34730 we sold the premiums related to 34700 Bank Nifty premiums which was nearly 138 and it was rounded off 138 was in the range of 100 and 200 we select 200 as we don't select the lower range after rounding it off, we got 200 from 34700, I went 200 downside and bought 34500 Call from 34700, I went 200 upside and bought 34900 Call I bought two Calls and sold two Calls in between at the money to apply this entire strategy, Rs.36287 was used If the market is in this range from here, observe the profit/loss changes if you observe the sold Calls had a profit and bought Calls had equal loss to profit so that covers the profit so, we can see there is not much profit on the top. it is only nearly Rs.67
that is the reason, I didn't want you to do Intraday on the remaining days If you do, you can get profits at selling position but at buying position you'll face loss ultimately, you can't find any net profit but on expiry day, when sold at the money, it will become zero that gives you an edge. That is the reason why I wanted you to focus on expiry day let's observe how it changed further When did I tell you to exit? when we get 30% profit of what we sell the sold premium was 138 and 30% of it will be nearly 41 points 41 points multiplied by 25 Bank Nifty lot size is 1035 so when you are nearing 1035, you must exit this strategy thinking you might get more profit if you wait longer as I can see 1000, I'm exiting from everything I'm exiting every position at the same time overally, this strategy closed at 1060 let's observe the Bank Nifty now it might be at the same place when we started it might have changed a bit in between but it is in the same position the advantage of expiry day is if the Bank Nifty is at same place for some time the premiums at the money start falling down but at the same time, we will have a loss from what we've bought if it is at the place over a period of time at the money decays and net profits start increasing, we must wait until then if in case the market is volatile and moves towards another direction through adjustments, we can get out of it without any loss firstly, we wouldn't have a big loss secondly, with a small adjustment, we can exit without any loss or profit we'll talk about adjustments but the essence of this strategy is In the worst case, the loss must be minimum If we have the capital to adjust, we must exit without any loss now, let's discuss adjustments After adjustments, I'll once again explain the Bank Nifty, Nifty monthly strategies execution and range let's see the adjustments of the strategy I'm taking an example for explaining the adjustments to you these are somewhat related to the premiums that I have shown you before not those exact numbers I've taken these numbers to have a simple calculation keep the theme the same. Relate the premiums you take to this and make adjustments similar to them suppose, you sold both the Calls from at the money the Call is on 135 so for both Calls, overall premium will be 270 you are selling, which means you are collecting 270 premium suppose, you've sold them at 34700 you are buying back at 34500 Call, so it would be in the money Call next, you are buying 34900 Call, which would be out of the money Call so, as the in the money call will be more than at the money the in the money will be near to the sold Calls 270 we've collected 170 and in the money will be at 250 and when we get to out of the money, we have to buy there too It will be near 70 points. 250+70=320. we are spending 320 points here we are spending 320 points for buying and 270 points for selling the difference between them is 50 points debit we spend 50 points more on buying than selling this is our max loss, 50*25=1250 overall max loss of this strategy is 1250 if you can do any adjustment, you can easily turn the tables to neutral when you are forming the strategy and if the market moves up like bullish, adjustment is done with Put and if it is bearish, adjustment is done with Call you started this strategy expecting the market would be in a certain range if the market is moving against you to the top side you'll lose only 50 points but add 10 points to it because the charges like buy/sell, and brokerage included after adding all that, if there is only one adjustment, sell the premium which is 60 if you have the money for 2 lots, sell the premiums which are 30 each if the market reverses, the probability of getting loss is very less this mostly doesn't react when the market reverses when should we shart our adjustment? after starting this strategy, the options that we sold have a near value to this then there won't be any problem instead of it, we bought 15500 Call & 16100 Call if the market tries to break this range then the max loss starts max loss is limited there will be a very less loss but the loss starts there If the market tries to move away from the points we bought, then we will start our adjustment so we'll start adjustment even if the market goes down or the market goes up If the market is down, we adjust with Call and if the market is up we'll adjust it with Put okay, let's say we've done the adjustment but the market reverses we sold the Put and we may enter loss. so, when should we sell?
let's take the same example as before. Bank Nifty is at 34700 we sold both of the at the money Calls at 34700 bought a Call at 34900 and bought a Call at 34500 the example we took in the market didn't move much so we didn't have any problem but in case if the market moves top side from 34700 the net we are spending means, the premium that is debited when we bought the Calls is for example, if 50 points are debited we'll add 10 points more to the 50 and then we'll sell the premium which is near to the 60 points suppose, if there is 34500 or 34400 Put, we'll sell that Put there so, when the market is going up and again it is coming down the level at which we sold the at the money, when we reach that level, we'll exit the adjustment if the market is moving in the same direction due to our adjustment, the points were are losing can be recovered If the Bank Nifty is changing very quickly If it is quickly changing places there will be some loss even from adjustments If there is a small gap between changing places the premium you sold will be decaying because you selected expiry to sell even if the market reverses and comes back, there are high chances to you be profitable from it The worst case is moving up quickly while you are making adjustments and suddenly dropping If there is some growth and drop and again growth and drop, because of your adjustments there will be no loss whenever this goes up and falls down your overall strategy before making the adjustments that gives you the profit even if the market reversal happens, the adjustments and strategy will give you profits In most cases, the probability of exiting with loss is very low don't try this with money unless you have the four weeks of practice/experience overall, when it's time to close this strategy, the chances of you being in loss are very low unless, when you're buying the Calls/Puts without a systematic manner at the start of the strategy and while doing this market moves in another direction unless you have such uncertainties, there is a very low chance to get a loss that's why I'm suggesting you do a basket order or when the market is non-volatile, place your orders quickly if your broker doesn't allow basket orders. To my knowledge Zerodha, Upstox, and others have this feature when should you exit the adjustments? when you are selling at the money, the buy positions are distant from them if the market is crossing that range, we start adjustments after making that adjustment, suppose this is the point of adjustment If the market reaches at the money sell positions, we will exit the adjustments the Nifty or Bank Nifty moving against is stable for some time or moves more than us, there will be no issue to us If it is coming back immediately because you have to add them very quickly, if there is any exponential growth or decay simultaneously and if it take some time, as the premiums you sold are small when they reach at the money position, they will be decayed and that will generate some extra profit for us when the strategy is out of the range and comes back to your range then it is evident that you are in profits so, when we reach the expected percentage, we'll leave the strategy how much money is needed to do this? for the base case strategy, it will be Rs.35,000. In the example, it was around Rs.36,000 it will be below Rs.40,000. if you want to adjust options without any hedge means, if it's going topside, we will adjust it with a Put and If it's going downside, we'll adjust it with Call without any hedge, it will be around Rs.1,30,000 as I said earlier, If you want to create a sell position, you need to buy a premium that is 10% of that, and then selling it would charge less suppose, you want to adjust a 50 Put premium If you sell a 50 Put premium, it will cost you around Rs.1,30,000
so, now you have to buy a premium of 5 before selling the 50 first, you'll buy it. But Isn't buying this 5 premium also a loss? when we wanted to do through Hedge I said earlier that 10 points should be added as the brokerage charges we'll add these 5 points to that in total, they are 15 points. so, 50 Put, brokerage charges 10 and hedge 5 will sum up to 65 and we will sell at 65 premium it must be more than 65 and the value need to be in the range like 70 or 75 or if you have the capital, we'll sell two premiums of 35 each Today's saturday, yesterday was friday and the day before that was thursday to plan July, we have to start the strategy in June end but now I'm planning for august so I'm taking the last Thursday of july we should select monthly rather than weekly so that you can have a better range If you have a better range, if the market moves in that range you'll have better profits if the market moves opposite to us, the range disperses and turns to loss but we can avoid it as I explained earlier I'll show you that with an example at present, it is at 34700 I've sold both the Calls that are at 34700 each call is near 643 observe the distance from that to the buying position I've bought 34000 Call and 35400 Call. How did I select this?
the sold premium for that was 643 rounding it off on the topside, we get 700. from 34700, 700 to the downside gives 34000 Call and 700 to the topside gives 35400 from 34700 I'm buying both of them when I'm adding it, It will show you the pay off graph Now if the market is against us, with how many points shall we start the adjustment? this is 643.85 we sold two of them we collected 1288 points with that, we bought a Call which is 1088 and we've to buy another one at out of the money at 344.5 i.e, 345
if we calculate this too in the worst case, if the market moves in a certain direction we'll lose our strategy at 145 points suppose, the Bank Nifty has moved topside from here we have to select the premium that is 145 Put and if it is going downside, we have to do the same adjustment with Call if there is a break-even, how did this come? 34145 or 35255? how much are we losing? 145 we bought a Call from the downside of at the money, we have to add it to 145 34000+145=34145 in the same way, we bought a 35400 Call on the topside subtract 145 from that 35255. These will be the breakevens there is no advantage to us with it but we should know what is breakeven and at which point you would get the loss so, this is Bank Nifty related monthly strategy along with how to act on different levels if this strategy closes like you thought profit will be around Rs.13,800 and max loss Rs.3,620 and the risk-reward ratio is 1:3.8 and If you like to follow this strategy, you'll need Rs.35,400 so mostly, It'll be between 35000 to 40000 when you collect the 30% of the premium that was sold by you and 30% sold be of each of it, not when both are combined only the Call at the money should be considered at the money, Call is 643 and 30% of 643 is nearly 193 when 193 is multiplied with the lot size of 25 It would be nearly 4820 this will be your monthly target by following this strategy we are spending Rs.35400
but if your broker took you for Rs.37000 in the worst case with this strategy, you are generating 30% profits this is low-risk strategy which means you shouldn't expect high return from this strategy we, personally don't follow this because we are active in the market We do straddles or In the money or Out the money in the Intraday because we are active In case we have some work like video recording or editing or any other personal work, we opt for this strategy because there will be no need to be tensed in this strategy even if we are late, we can make adjustments and exit with neutral and if you are lucky you can end up in the profits so, this strategy is low risk and generates minimum returns so, the conditions that I talked about earlier, they can follow this strategy this was Bank Nifty related. Related to Nifty, its future is at 15785 means, 15800. I've two Calls at 15800 each call is 184 and rounding it off to 200 I'm buying a Call at 200 points downside and I'm buying a Call at 200 points upside overall strategy changes this way and break even is 15637 to 15963 960 is the highest in recent times and if it crosses that, we should start adjustments and in the downside, if it crosses 637, we should start adjustments in recent times, even when it is down to 600, the market suddenly reversed after breaking the range of 630, we shall start the adjustments and when the market is reversed, only at 15800 you'll exit your adjustment when it is going down we should make adjustments with Call and when it is going up we should make adjustments with Put I hope, you got a clear idea about this the risk-reward ratio will be very favorable risk will be very low and we can manage that easily so, Which premium Call or Put must be adjusted here? for this, we have to evaluate the sold Call and Put so, we've sold two premiums of 185 we gained 370 points and bought 309 Call from In the money and again we bought a premium of 97 Call the premium of 36 Call or Put. If it's going up Put and going down Call ideally, what is the capital we have? should we sell one premium in that lot or should sell two premiums? which one of it should be adjusted will be decided by the capital we have i hope you understood this strategy remember that when you start the strategy, in the early days you won't notice high profits because they will be decay in which you are buying and by expecting high returns don't exit from the strategy carry it till the end. If the market is against, make the adjustments try to experience by making adjustments practically practically doesn't necessarily mean in the market. you can note it down from time to time
and check out the results. If the results are attractive, then you can follow this strategy one more thing is, the previous strategy had good returns Stangle, Straddle and IronFly had better returns than this but they don't have the flexibility to undo the losses with simple adjustments but this strategy has low risk and hence fewer rewards I hope you understood this video post your questions in the comments section I'll try to answer some of the most asked questions which is the best strategy according to you to date? Strangle or Straddle or IronFly or Iron Condor or this Long Butterfly? I'm reminding you again, the name of this strategy is Long Butterfly if you want to open a Demat account at any point in the stock market the referral links related to the channel are given below in the description as well as in the comments section If you think this channel is teaching you something, then try to use these links to open your account This is today's video did you like it? then like it and share it with the beginners if you think this will be useful and if you haven't subscribed to this channel observe the content in the channel and if you think this content is interesting subscribe to the channel and hit the bell icon I'll be back with another interesting video. until then take care JAI HIND