My views and plans on Trading any expiry day summed ahead

This will be a long thread, because there are many tiny details about expiry trading which might help you in future. Overall markets are the best teacher and there is no substitute to practical learning

Here we go 🧵🧵

Most of you might know that I'm primarily a directional trader and I'm fine with both options buying and selling depending on market conditions such as Vix, Day, Momentum and overall our positioning in the market structure. I am a strong believer of hedging (Not margin benefit)

1] So I start my Expiry day planning on a Wednesday eve where based on market closing you can have a fair amount of idea where we are headed, I do this analysis on the hourly charts, due to less noise and higher precision for day trading.

This gives an idea of where we are positioned in the market.

2] Next I base my analysis on 3 scenarios, either flat opening, gap up or gap down opening, which kind of opening will affect which market participant the most (Buyer/seller basis). This ensures that I am prepared for

all possible scenarios the next day.

3] Thursday morning, I am all set as per opening, now in the first half I prefer selling options by making credit spreads, this gives me some leverage and I have my orders punched by 9:20. I prefer selling ATM or most of the times mild ITM

Buying/Selling climax is very common in the #stockmarket and it is completely based on the price.

#Volume #Climax is something that I have observed.

In this thread🧵, I am sharing a #trading strategy that I am using based on this.

Like❤️and Retweet🔄 for wider reach.

What is this Volume Climax?

You would have seen some kind of spurt in volume in a day after a up/downtrend. Here, we don't consider any day in which there is corporate action or quarterly result.

Let's see some chart:

Below Chart is of #Metropolis when volume spurt occurred.

Now one to observe in Metropolis chart is after that volume spurt candle, the uptrend had paused.
This means at this candle smart money had offloaded the stock and retailers bought it. Hence stock went in the downtrend and Metropolis went down by 20%.

So this volume spurt on non corporate action day can bring pause in the existing trend and it can start the opposite trend.

In the above example, when price was in uptrend, it went in downtrend and vice versa is also applicable.

In below example, #IOLCP was in downtrend when volume got spiked. After that, the price moved up by 20% in a few days.

Seems easy right?

But there are some rules that I have created for my own trading. Let's see that now.

The most valuable hedging strategy you aren't using:

The IRON FLY STRATEGY.

Knowing how to use it will protect you from gaps and intraday spikes and 10x your hedging experience.

Here's the step-by-step guide:

Collaborated with @niki_poojary

Here's what you'll learn in this thread:

1. What is an iron fly
2. Perks and Drawbacks
3. What to do when in profit?
4. How to adjust when in loss?
5. Thread on How to keep shifting an iron fly for max credit?
6. Risk-free trades benefits

Let's dive in ↓

1/ What is an iron fly?

Sell ATM CE and PE (Short straddle)
Buy OTM CE and PE (Hedge it by buying on both sides)

Look at the picture below for an example of an iron fly in current weekly options.

2/ Why do traders like iron fly?

Many traders want to receive maximum theta or max credit.

This is why they sell straddles.

But straddles have unlimited risk in them, and can't handle gaps or intraday spikes.

This is why traders like knowing the maximum loss in their trades.

3/ Perks of Iron Fly

Low capital required—Possible to buy first, sell later

Limit losses—Know your maximum loss upfront

Adjustments—Can reduce losses to zero or almost nothing

Weekly earnings—Possible on a weekly basis

Jackpot—Potential for a jackpot if it expires in middle