Why knowing a Expiry Range on Expiry day for NIFTY/Banknifty is usefull
If you are an expiry trader,
For a Option writer it all boils down to what option will be become zero
For a Buyer it boils down to which option can become a hero
If you are an expiry trader,
For a Option writer it all boils down to what option will be become zero
For a Buyer it boils down to which option can become a hero
If you understand the range for the day you can do the following
For Short Option Seller
- Short a Strangle and eat all points on the range
- Short either CE/PE
For Short Option Seller
- Short a Strangle and eat all points on the range
- Short either CE/PE
Suppose Nifty is trading at 18000
If you can somehow ascertain that range is say 200 points
So expiry can be between 18100-17900
Safe Trade : Take strangle outside the range ( 50 points each side)
You can short a Strangle at 18150-17850 say at 30 and wait for it to become 0
If you can somehow ascertain that range is say 200 points
So expiry can be between 18100-17900
Safe Trade : Take strangle outside the range ( 50 points each side)
You can short a Strangle at 18150-17850 say at 30 and wait for it to become 0
Of course you can take a strangle outside the range but then premiums are low.
Almost Safe Trade : Take strangle inside the range
You can short a Strangle at 18100-17900 say at 50 and wait for it to become 0
Almost Safe Trade : Take strangle inside the range
You can short a Strangle at 18100-17900 say at 50 and wait for it to become 0
Naked Shorting
Either Short CE or PE
You can short 18100 CE, 18150 CE or anything above it
You can short 17900 PE, 17850 PE or anything below it
Either Short CE or PE
You can short 18100 CE, 18150 CE or anything above it
You can short 17900 PE, 17850 PE or anything below it
Risky but Good RR ( Short Selling)
- If you can Sell a ATM CE or Slightly OTM CE at higher end of range
- If you can Sell a ATM PE or Slightly OTM PE at lower end of range
- If you can Sell a ATM CE or Slightly OTM CE at higher end of range
- If you can Sell a ATM PE or Slightly OTM PE at lower end of range
If price comes near 17900, you can attempt selling 17900 PE/17850 PE
If price comes near 18100, you can attempt selling 18100 CE/18150 CE
If price comes near 18100, you can attempt selling 18100 CE/18150 CE
For Option Buyer
- If you can buy a ATM CE or Slightly ITM CE at lower end of range
- Or Buy a ATM PE or Slightly ITM PE at higher end of the range
Taking the same example of range 18100-17900
- If you can buy a ATM CE or Slightly ITM CE at lower end of range
- Or Buy a ATM PE or Slightly ITM PE at higher end of the range
Taking the same example of range 18100-17900
If price comes near 17900, you can attempt buying 17900 CE/17850 CE
If price comes near 18100, you can attempt buying 18100 PE/18150 PE
If price comes near 18100, you can attempt buying 18100 PE/18150 PE
All of these trades do however require a StopLoss.
You cant just take the trade an assume it will right,
The most important factor is finding the range on Expiry
If you understood this then, this is what I basically do on Expiry days by ascertaining the range.
You cant just take the trade an assume it will right,
The most important factor is finding the range on Expiry
If you understood this then, this is what I basically do on Expiry days by ascertaining the range.
Will share the Strategy to find the range soon
Stay tuned
Stay tuned
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