SBIN – Bearish Bias with Heavy CE Shorts and Weak Call Structure

Jul 20

________________________________________________________________________________📈 SBIN – Bearish Bias with Heavy CE Shorts and Weak Call Structure
📅 Setup Date: 17.07.2025 | ⏱ Timeframe: Daily
📍 Strategy: Short-Term Bearish Momentum Setup with Defined Risk
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🔍 Overall View
Spot Price: ₹823.35
Trend: Mildly Bearish – Spot facing resistance at 830–840 with weak CE premiums
Volatility: IV ~18%–22% (stable to slightly elevated)
Ideal Strategy Mix: Bearish directional trades or credit spreads near resistance
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1️⃣ Bullish Trade (Contrarian Setup)
Best CE: Buy 820 CE @ ₹12.65
Why:
• ATM strike with highest delta (0.56) among CEs
• Smallest short build-up in CE chain (OI ↑0.73%, vs ~+4%–12% on other CEs)
• If spot reclaims 830+, this option will respond fastest
• IV is lowest (17.73%) = cheapest in premium vs other strikes
Contrarian Setup – Not ideal unless spot crosses 830 with strong volume
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2️⃣ Bearish Trade
Best PE: Buy 820 PE @ ₹8.65
Why:
• Strong Long Build-Up (+29.5% OI), volume-led spike (+46.6%)
• Solid delta (-0.44) with decent Vega → responds well to downside
• IV is relatively low (19.6%), allowing room for expansion
• Ideal strike as spot sits slightly above – quick delta pickup expected
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3️⃣ Strategy Trade (As per trend + OI data)
Strategy: Bear Put Spread → Buy 820 PE / Sell 800 PE
            → ₹8.65 / ₹3.00
     Net Debit: ₹5.65
     Max Profit: ₹20 – ₹5.65 = ₹14.35
     Max Loss: ₹5.65
     Risk:Reward: ≈ 1 : 2.54 ✅
     Lot Size: 750
     Total Risk: ₹4,237.50
     Max Profit: ₹10,762.50
📊 Breakeven Point: ₹814.35
📉 Exit If: Spot closes above ₹832 (invalidates PE strength and bearish structure)
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Why:
• Heavy CE short build-up across 820–850 strikes (Bearish Call Ladder)
• 820 PE has strong long buildup + clean delta = momentum PE
• 800 PE still holding OI, good strike to sell for defined risk
• IVs are still in mid-range = spread cost low, R:R > 1:2.5
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📘 My Trading Setup Rules
Avoid Gap Plays
→ Check pre-open price action to avoid trades influenced by gap-ups/gap-downs.
Breakout Entry Only
→ Enter trades only if price breaks previous day’s High (for bullish trades) or Low (for bearish trades).
Watch Volume for Confirmation
→ Monitor volume closely. No volume = No trade.
Enter on Strong Candle + Volume
→ Execute the trade only if a strong candle appears with increasing volume in the direction of the trade.
Defined Risk:Reward Only
→ Take trades only if R:R is favourable (ideally ≥ 1:2).
Premium Disclaimer
→ Option premiums shown are based on EOD prices — real-time premiums may vary during execution.
Time Frame Preference
→ Trade with your preferred time frame — this strategy works across intraday or positional setups.
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⚠ Disclaimer (Please Read):
• These Trades are shared for educational purposes only and is not investment advice.
• I am not a SEBI-registered advisor.
• The information provided here is based on personal market observation.
• No buy/sell recommendations are being made.
• Please do your own research or consult a registered financial advisor before making any trading decisions.
• Trading involves risk. Always use proper risk management.
I am not responsible for trading decisions based on this post.
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Aug 12

Trade closed manually

Good Trade on the downside