Yo! Option Buyer! -Nifty – By The Professor | Algo Positional Option Buying Strategy

This is a positional option buying strategy which buys monthly ITM options in NIfty based on the trend using basic trend following indicators. Don’t ask me what? it is so simple yet effective.    

Hard Stop is when the counter reaches -10k in 1x… 

profit booking depends on the trend, it makes good money in trending market but loses out during sideways market. After 5k profit, TSL kicks in to protect from going to loss when market reverses.

Theta is an enemy but as long as trend is captured, it overcomes theta effect. Though 1 lot of option buy would not be more than Rs.20,000, I recommend to have a capital of Rs.50,000 to play with this strategy as the drawdown could be severe. 4-5 loss trades will easily be compensated with one trend which will make it profitable.

Test with paper trade and then go-live if it is interesting. 

Although the algo takes care of the entry, exit, adjustments, you are advised to keep an eye over the account to watch for any errors which could be due to margin shortage or technical issue etc.

Disclaimer: I am not SEBI registered advisor or Portfolio Manager. I do not take responsibility for any losses that might occur as a result of deploying this strategy nor do I guarantee any returns. If you are not aware of risks associated with FNO trading, you are strongly recommended to understand, analyse and then trade on FNOs.