A THREAD on . . . .

How @ITRADE191 selects strikes to trade in and how he follows risk management.

Short thread explained via pictures with the help of @niki_poojary.

1. At the start of the week

i.e. on Friday and Monday, DJ Sir prefers to sell OTM options of 50 rs premium in Nifty.

- ATM options won't decay a lot at the beginning
- With this premium reward is good
- Since these strikes are 4-5 strikes away they are relatively safer

2. On Tue/Wed/Fri

He prefers to trade in ATM or near OTM options.

- ATM options have the highest theta decay
- Since there are only 2-3 days to expiry options sellers by default have a higher probability of winning
- Huge reward if market stays flat

3. Directional/Trending days

- Capture huge profit via ATM option selling
- Futures only where he has good conviction
- Even if doesn't trend much decay will be huge
- Only on days Tuesday to Thursday

4. Which series to trade options in?

- INTRADAY trades option selling is ONLY in weekly expiry
- Option buying for hedging is done MAJORLY in next week/monthly expiry
- This way we have time to adjust
- Theta decay slower than weekly