BankNifty Expiry Trade - Setup - 28th Jan

Jan 27, 2021

Monthly Expiry
Pre-Budget volatility
4 days huge red bars
in the last 4 trading sessions, BNF lost around 2700 pts from high

Makes it interesting & high risk

My two cents for friends who asked me about the trade plan

The benefit of having a trading plan is - you know beforehand what you are going to do if the trade triggers. That takes some amount of emotions out of play.
another important suggestion if I may - if you are getting uncomfortable or not understanding how the Market is working - stay out of trading for that day or if you are not confident enough, keep your position size small. There would always be a better opportunity, so save capital and live for another day

My Trade plan for tomorrow

• If BNF gaps up and if it GAPS up huge - say above 30550 . I would go with selling 30400 PE
  
• If BNF gaps down and if it GAPS down huge - say 29950. I would wait till it falls 29500 and then would sell 29200 PE
  
• If BNF does GAPS up or down or say it GAPS only +- 100 pts , I would go with selling an at the money BNF straddle
  

P.S - buying a PE in a volatile market when PE premiums are high is a risky approach.

Happy Trading

Jan 28, 2021

Note

Huge GAP DOWN watch out scenario 2 in play