Hi CB, GA :)
Any idea about ZERODHA ???

Hi Abdullah, Good morning.. no, not sure about them

Hi amolo, Good afternoon. seems may open a bit higher. for now would advice to hold with sl near 5740. if nifty holds onto 5750 after opening, its likely we see some bounce.

Hi CB, Thanx...

ZERO LOSS OPTION TRADING:

Is it Possible? ... YES ... Enter a trade in profit ... Exit in profit

Confusing? ... Read Ahead to know how.

This is my Modified Bull/Bear Spread Strategy ... Currently Paper Trading on it with Excellent Results.

For Long Trades: Buy 1 ITM/ATM Call and Sell Deep OTM Calls enough to cover the cost of ITM/ATM Call

For Short Trades: Buy 1 ITM/ATM Put and Sell Deep OTM Calls enough to cover the cost of ITM/ATM Put

When to use this strategy? ... You expect about a 1.5-2% move in a particular direction.

Which Deep OTM Options to Sell? ... Sell the ones that decay even when the direction is favourable.

e.g.: On 28th April, Nifty broke a support level of 5812. Shorting advised below 5803.
5800PE May Series (ITM/ATM Put) was @ 114 and 5300PE May Series (Deep OTM Put) was @ 14.5.

Buy 1 Lot 5800PE @ 114, Total Outflow: 114 x 1 x 50 = 5700
Sell 8 Lots 5300PE @ 14.5, Total Inflow: 14.5 x 8 x 50 = 5800
Net Profit: 5800 - 5700 = 100 (You enter a trade in profit)

On 29th April, Nifty made a low of 5706 (approx 100 points), 5800PE went up to 158, 5300PE went to 13.2. If one exit's at that level ...
Total Inflow from 5800PE: 158 x 1 x 50 = 7900
Total Outflow from 5300PE: 13.2 x 8 x 50 = 5280
Net Profit: 7900 - 5280 = 2620 (You exit a trade in profit)

Total Profit: 100 + 2620 = 2720.

Had Nifty bounced back, you still would be in profit of 100 (Entry Profit) and can hold the trade till expiry for your desired level.

This trade could have been slightly improved if instead of 8 5300PE shorted, 9-10 5300PEs are shorted.

Pros of this Strategy:
1. Almost no risk of loss.

Cons of this Strategy:
1. Very High Margin required for shorting Options.
2. Trading Charges could be very high (Try to get an economical broker)
3. This strategy could heavily backfire if Nifty Gap Opens over 5%

This Strategy can also be converted into the Modified Butterfly Strategy when you are not sure of the market direction and earn profits in both directions.

Please provide your reviews on these strategies before we can start using them.

Regards,

T. Sunil Rao.

hi Abdullah i have one excel file for brokrage of ZERODHA if u need give me your email address...

Hi Sunil Rao, Can u Explain what is this strategy

i sell 5800 Put @ 138
I sell 5800 Call @ 98

in the morning of friday

@ closing

5800 Put @ 137
5800 Call @ 87 if i cover on same day it gives 750 Rs for one-one lot

can u tell me where is risk in this strategy

Hi Siraj, This strategy is known as Short Straddle. When Sell 5800 Put and Call for a total of 138 + 98 = 236. So the risk becomes unlimted above 5800 + 236 = 6036 and below 5800 - 236 = 5564 at expiry.

If you cover it intraday, your risk starts @ 33% of 236 = 78, so risk starts above 5800 + 78 = 5878 and below 5800 - 78 = 5722

If you hold it for short term, you may increase your risk level to about 50-66%.

This Strategy will be very profitable in range bound or low volatality markets.

Hi Sunil Rao, The strategy requires shorting quite a few number of lots of Options.I dont know about others, but in my case, I would block enormous amount as margin. ( Now, any amount which is enormous for me, may not be so for others ). With that margin I will prefer to enter Futures, taking technical views. Plz understand what I have stated is entirely my personal view and has got nothing to do with the effectiveness of your strategy.