Weekly Banknifty Product

BANKNIFTY LONG-SHORT WEEKLY OPTION PRODUCT

One can expect 15-20 trades a month (Maximum upto 2 calls/day, Minimum 0).

Majority of the trades would be squared off on intraday basis only.

Intention is to capitalize 150-200 points on Net basis in the whole month (Around 500 points/Quarter) with a strong DYNAMIC QUANTITY MANAGEMENT which will enhance the yield even better.

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. 2, 50,000 or in multiple thereof (Maximum of 25L to avoid slippages).

The quantity that has to be traded in every trade would be Dynamic in nature. It would vary from 40 quantity which is the minimum and goes upto 200 quantity maximum (calculated for 2.5L Portfolio)  which purely depends upon a Stop loss for a particular trade.

For example: A trade which carries a stop loss of 50 points the quantity recommended would be 40 whereas a trade which has a stop loss of 10 points the recommended quantity would be 200.

All the quantities would also be messaged along with the trade.

If you notice we would be following a stop loss of close to Rs. 2000 (Gross Basis) despite whatever quantity we recommend.

The above quantity mentioned is calculated for a 2.5L portfolio for a Single long option Trade. So for example, if a trader is having a 10L portfolio deployed, his quantity would vary from 160-800 quantity per trade.

Performa of a Long Option Trade:

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

  • *PP means Partial Profit and we recommend to sell 50% of the holding quantity at the given
    price and rest 50% at the given target or any revised priced mentioned which can be in any form of below given updates :
  • 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 all 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 100 qtty 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 one 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 track of the combined premium only
    thereafter.
  • The recommended quantity would be fixed at 100 quantity for each leg for every trade as the profits are always limited. (Ask For a 3x margin benefit for Intraday Trading from your broker)
  • They will be strictly Intraday trades.
  • It is more of a delta neutral trade and the main intention is to gain from the time value which erodes 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.
  • 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.