muhd_nihal

BN Vertical Call Credit Spread

Short
NSE:BANKNIFTY   NIFTY BANK
Following trade is for educational purposes only. An Iron Condor is an option strategy, where the expected outcome for next week is range-bound.

A CE option mentioned below is a European Call Option, while a PE option is a European Put.

A hedger always buys these options and a speculator mostly sells one.

But when the speculator only sells these options, the risk involved is unlimited and the margin requirement is also high. This is called naked option selling. When both CE and PE are sold, it is called a short strangle.

In combination with this, if we buy much farther CE and PE, the short strangle becomes an Iron condor. Here, the idea is to capture the option premium in a range-bound market with reduced risk and margin compared to short straddle.

The spread between buy and call leg is based on optimum use of margin. Since the option premium is credited to us in advance, it is also a credit spread.

Since this week the view is bearish , we are taking only the CE leg of Iron Condor. As the week progresses, additional trade may be added.

Please leave a comment if you need further clarification on the following trade

---------------------------------------------------------------------------------------------------------

Sell 36800CE, Buy 37400CE


The history of trades of this trade model is in the following link:

https://docs.google.com/spreadsheets/u/2...

My concept of trading is not to be an overnight millionaire, but a disciplined method to grow the wealth that you own.
Please leave a like if you like the trade ideas :)
Comment: Capital has been raised by the drawdown we faced last week.
Finally, wealth creation is more about trade and capital management rather than strategy alone.
https://ibb.co/C5Ls78f
Comment: Sell 35300CE, Buy 34700CE
Convert to Iron Condor
Comment: Exit Iron Condor,
Sell 35600PE, Buy 35000PE
Comment: Sell 36600CE, Buy 37200CE,
Convert to Iron Condor
Comment: Exit 35600PE, 35000PE

Comments

Commendable way of explaining!! Thanks, useful for novice like me.
Reply
muhd_nihal RamaSriram
Reply
are you selling weekly or monthly expiry
Reply
muhd_nihal rkb9860
@rkb9860, Weekly. Please check the sheet.
+1 Reply