Long Strangle on BankNifty for December 2024Hello Everyone, here is my take on the Banknifty for the month of December 2024!
In this video, I have analyzed the past 6 years of action in December and how market has played out. Taking a deeper look into the volatility, price action, and identifying the best strategy to play in December 2024.
Why you should not play directional?
While directional trading can yield substantial rewards, the risks, psychological strain, and low probability of consistent success make it a challenging strategy. Focusing on strategies with a higher margin of safety, diversified approaches, and non-directional trades can often lead to more sustainable and less stressful trading outcomes. Always prioritize disciplined risk management and a clear trading plan over speculative bets.
Why Long Strangle is best for high volatile market?
The Long Strangle is an excellent strategy for high-volatility markets because it leverages significant price movements while capping potential losses. Its simplicity and ability to profit from directional uncertainty make it a go-to choice for traders expecting market turbulence.
Key Considerations:
High Premium Costs: Implied volatility can make options more expensive. Ensure the expected price move is large enough to offset the premium cost.
Breakeven Points: Calculate the breakeven levels (strike price ± total premium) to understand the range required for profitability.
Timing is Crucial: Enter the position when high volatility is anticipated but has not yet fully materialized, as option prices might still be reasonably priced.
