A Thread on How to NOT do blunders while selling Options. 🧵🪡

A thread about STBT options selling,

The purpose is simple to capture overnight theta decay,

Generally, ppl sell ATM straddle with hedge or sell naked options,

But I am using Today’s price action for selling options in STBT,

(1/n)

Its work on both index (Nifty, BNF) as well some standard stock but i used only for Index on every day and Last 10 days monthly expiry i do in stocks only specific,

It’s purely STBT type’s trade sell today and buy tomorrow kind,

(2/n)

Let’s start the strategy,

Every day at 3:15 PM, Open Nifty or BNF chart in daily TF.

See the last candle formation only; we take trade always based on the last candle formation

(3/n)

Case 1:
If Red Bearish candle formation, Mark the high and low of that candle

High 35979, Low 35667. (16th July)

Based on this candle we simply sell credit call spared (Sell 36000 CE and Buy 36300CE) you can make the difference between two calls 300 or 400 as per your risk,

Case 2:
Bullish strong candle

High 35238 and low 34922 (5th July) (Refer the image)

Based on this candle we sell credit put spread (Sell 34900 Put and buy 34600 put)

If you use it right, Iron Fly is the most solid risk-defined strategy in trading.

But most people don't know how to adjust the strategy when it goes wrong.

Here are 7 adjustments you can do to lower risk and increase profitability: 🧵

Collaborated with @niki_poojary

0/ Who is this for?

This will greatly benefit people who freeze when it comes to managing their trades and keep booking losses.

Some trade with too much fear as well when things go wrong.

Knowing these adjustments will give you the confidence to try to manage your trades.

Most of them are to lower risk on the side the market is going in.

Some adjustments even increase the profit potential and probabilities of the trade being in profit on expiry.

Let's begin by having a look at the adjustments.

Here is the adjustment number 1 below.

1/ Don't do anything till your breakeven arrives

One reason these strategies go wrong far too quickly is due to adjusting them too frequently.

You can escape most adjustments if you simply wait for the market to arrive at your breakeven.

This will work well in monthly options.

2/ Remove Risk from Untested Side

If you've taken an iron fly and the market has gone up you can shift your put buy upwards and lock the downside risk to potentially zero.

This way you've secured one side and just need to manage the bleeding side.

Undisputed champion 🏆 in option selling and undoubtedly India's best trader @Mitesh_Engr Sir

Lessons on how to trade in such difficult times from the Indian Options Conclave 3.0 by Jainam Broking Ltd

Time for a🧵

Collaborated with @AdityaTodmal

How to trade in options during high volatility i.e. India vix>22-23 ?

In the current scenario, option sellers who are deploying strangles are unable to make money

E.g.: If a trader is selling a strangle of Rs. 100 each leg then during a fast momentum on either side, one leg becomes 80 & the other one Rs. 200
So overall, the strangle seller is at a loss

Strangles & Straddles are easy to manage in low vix

During high vix, find reversals

Mitesh Sir follows 3min TF in Bank nifty futures chart

Specimen:

In a down trending market people are tempted to sell CE & avoid selling PE's, however it would be disastrous to hold those CE's till expiry

Trailing is the answer during high VIX, as the momentum is faster on both sides

Check past few days charts on 3min TF for more clarity