May 19, 2020 at 9:08 PM #280656Nitin BhatiaKeymaster
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Option Selling Strategy based on Volatility is more successful compared to any other option writing strategy. Volatility plays a very critical role in derivatives trading especially options trading. India VIX tells us about the annual volatility expected in the Nifty. We should consider the extreme trading range i.e. movement is possible on both sides.
Based on the annual volatility, we can find out the monthly, weekly, or daily volatility range of the nifty. The option writing strategy should be to write an option outside this range after taking a safe margin. You can decide whether you would like to sell an option on Put Side or Call Side with the help of Theta Option Greek.
The option contract with maximum theta % i.e. decay should be chosen for option writing. With the help of this Option Selling Strategy based on Volatility, an options trader can generate consistent returns safely. However, Option Selling can be very risky due to very high volatility. This option selling strategy is taught in some paid programs by charging hefty fees as it is highly profitable.
May 23, 2020 at 12:37 AM #281782Shoumya ChoudhuryParticipant
Sir, Thanks a lot for this amazing strategy.However I have a confusion-1:Gap up ya gap down mei agar nifty options mei intraday expiry mei trade karna hoga to kya us din ka jo opening price hai usse calculate karke analysis karenge ya jo previous day price hai use calculate karenge??
2: secondly,if we think that the market will go up,but as per your instructions we should choose the contract which has higher theta value.So if the call side contract has higher theta value but it will be in the opposite direction of the trend should we still “SELL” the call or go with the trend and sell the put although it has low theta value than that of the”CALL” option.
3.Last but not the least in the theta calculation, should we take -10 or -20% as 10 and 20% or as it is??Sir, please help me by giving a reply.
Thanks and Regard’s,
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