Option Hedging 20/20 for Nifty Weekly Expiry By NK Sir

I am Not SEBI Registered advisory. This blog is written for education purpose. You may apply this strategy on your own risk we will not be responsible or any losses. 

I am sharing this Strategy under the Guidance of Nitish Sir.

This trade is applicable for only low capital investor i.e; Rs 20,000 or Rs 50,000. Investor with higher capital can incurred loss due to the market sentiment and emotions so please avoid this trade. At initial stage investor will do paper trade and once gets convenience with this strategy then can execute this trade with one lot in starting then after 2 or 3 lots.

(if India Vix is 20 to 17)

This Strategy is only applicable for Nifty option buying on Weekly Expiry. In morning we may see nifty strike price and its near by OTM price at approximate Rs 35 to 40 when Vix is 20 to 17. but due to expiry and time decay the price may come down to Rs 10 or Rs 12 between time period 11.30 AM to 2.15 PM. So how we need to execute this trade?

At 11.30 watch the strike price of nifty 50, if it is 16075 than we will make a basket of call , put as mention below of weekly expiry and monitor their price. If  The Sum of Both the Option price is Rs20 or Rs23 than only we will execute our trade. Capital required for this hedge design is approximate rs1700 or rs1800

Nifty Weekly Expiry 16100 CE

Strike Price: 16075

Nifty Weekly Expiry 16050 PE

we need to buy call of 25 point above i.e; 16100 and put of 25 point below i.e; 16050 of weekly expiry only..(Note: Please don't make a mistake of buying monthly expiry call and put. if done so than you may be in trouble)

 Definition of sum of both strike price for your reference. 

Nifty Weekly Expiry 16100 CE is equal to A

Nifty Weekly Expiry 16050 PE is equal to B

Than A+B should be equal to Rs 20 or Rs 23

Stoploss Would be A+B be equal to Rs 10

Market may check your emotion so please don't be greedy. Only execute your trade if you get both sum at this price.

(if India Vix is 14 to 16)

If India Vix is between 14 to 16 than our call and put sum buying price would be Rs 17 and Stoploss would be Rs 9

Nifty Weekly Expiry 16100 CE is equal to A

Strike Price: 16075

Nifty Weekly Expiry 16050 PE is equal to B

Than A+B should be equal to Rs 17 or Rs 18

Stoploss Would be A+B be equal to Rs 9

RESULT

1) If The market is range bound than we may loss our capital invested in it and would hit the stoploss. (Note: We will not keep stoploss in this system but we will exit from the trade when both sum comes to Rs 10)

2)If Market Moves extremely upward or downward direction than we would be in profit. Reason is our OTM call/Put would become ITM call/Put and premium may get added to either of this price and we would earn handsome profit in it.

3) Out of 10 Trade we may incur loss in 2 to 3 trade but in 7 trade we may earn profit.

4) Sometimes it may happen than we can may earn 2 or 3 times of our capital invested in a trade.

Let's Hope you Learn and Enjoy this Strategy.