Weekly Banknifty Product

BANKNIFTY LONG-SHORT WEEKLY OPTION PRODUCT

  • One can expect 15-20 trades a month (Maximum upto 2 calls/day, Minimum 0)
  • All the trades would be squared off on intraday basis only
  • Intension is to capitalize 100-150 points on Net basis in the whole month (Around 400 points/
    Quarter) Hence we recommend to at least subscribe to us for a Quarter as any loss arising in
    any month would be taken care off in the subsequent months.
  • Minimum Capital recommended is Rs. 1, 00,000 or in multiple thereof (Maximum of 25L)
  • Recommended Quantity to be traded for every 1 lakh capital is 80. For any Long Option Trade
  • For any Short Straddle or a Strangle Trade (Selling a Call and Put together) the span margin
    required is around Rs. 70,000 for a set of 20 quantity and since it is on intraday day basis any
    broker would allow a set of 2 lots which is around 1.4L margin appx against cash margins of 1
    Lakh which make it 40 quantity each.
  • Brokerage should not be more than Rs. 20/Lot for Buying and Selling options. Lower the cost
    higher would be the yield.
  • A faster execution will always be an added advantage.

Performa of a Long Option Trade:

Buy BANKNIFTY 30500CE at 150 SL 125 Target 200 (PP* @ 180)

  • *PP means Partial Profit and we recommend to sell 40% of the holding quantity at the given
    price and rest 50% at the given target or any revised priced mentioned for Eg:
  • Update: Partial profit booked at 180 for remaining position revise SL to 150 with Target 200
    OR
  • Update: Partial Profit booked at 180 for remaining position Trail Sl to 140 and Target to 215
    OR
  • Update: Partial Profit booked at 180 and exit remaining position at 190
    OR
  • Update: Partial Profit booked at 180 hold remaining position till day end with revised SL of
    130

So these types of update will be sent to call clients once the Partial profit (PP) is booked.
The PP would always be given in advance keeping in mind the speed in the movement of the
underlying.
It is always recommended to keep strict stop loss (SL) as mentioned.

Performa of a Short Straddle or a Strangle Trade:

Sell BANKNIFTY 30600CE and 30400PE 1 lot each at a combined premium of 240 Combined SL is 260 Combined Target 200

In these type of our recommendations one will have to execute both the recommended trades 1 after
one at market price, none of the strike recommended can go on a pending order.
The sum of both the premium sold should be close to the mentioned level of combined premium
which is the initiation price and the client would need to keep a rack of the combined premium only
thereafter.
It is more of a delta neutral trade and the main intention is to gain from the time value eroding during
the day.
It is not possible to keep a SL of a combined premium so it is always advisable to exit the strategy as
soon as the exit message is received or as soon as you spot on that the combined premium (sum of
call and put premium) is hitting the combined premium SL or Target.
As the movement in Banknifty can be fierce it is always better to be alert when executing these short
Gamma trades.

Last 6 Month Performance

MonthSingle Leg OptionMulti-leg OptionTotal Points
Oct-18-40140100
Nov-18 210 -10 200
Dec-18 180 60 240
Jan-19  -180 110 -70
Feb-19 -110 100 -10
Mar-19 240-90150 
Total   610

Since the market is not always trending it is always advisable to execute both type of
recommendation in order to have a net positive outcome which cover all 3 scenarios of the market.