Short Naked Call for 21st JAN

NSE:NIFTY   Nifty 50 Index
Wild volatility in the market was because of 2 main reasons :
  • Max Pain was at 12200 at Market was at 12350 so it was bound to come down

  • Reliance posted below expectation results and Reliance being a Heavyweight dragged the market

Coming to today's position, I believe as Max pain at ATM Strike was very far this happened but now as Max Pain Point and ATM Strike are at the Same spot this wild volatility won't be there although a little bit of panic is still expected but we won't see a sudden 1 - 2 % breakout or breakdown I think.

In Option Chain Call Side 12250, 12300,12350 levels have very high Open Interest which makes them strong Resistance
On Put Side 12200, 12000 have high Open Interest which makes them strong Support

Most Probably markets will open below Previous Close today and test 12200 Support level


Short Call 12350
Premium = 22
Delta = 0.25

Short Call 12300
Premium = 36
Delta = 0.37

Short Call 12250
Premium = 57
Delta = 0.5

Net Premium = 115
Net Delta = -1.16

I have calculated pay off for this position for the range of 12000 to 12350 level that's the max I think it can swing and we will start incurring loses after 12332 Spot which is less probable today but still to be of the safe side we will add a Stop Loss of 700 Rupees.

Max Profit = 115 * 75 = 8625

Max Loss = 700 * 3 = 2100

I have mentioned link to website where I have calculated Pay off
Trade closed manually: The market is going towards 12200 levels so I would suggest closing this trade

12250 Change in Call Premium = -28.15
12300 Change in Call Premium = -20.05
12350 Change in Call Premium = -13.55
Net Change = 61.75
Net Profit = 61.75 * 75 = 4631

Again a small satisfactory profit ...


Good call bro
@sirusdas, Thank You @sirusdas

Happy Trading
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