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Here is the Holy Grail Options Strategy @katariyaPran and @itjegan have been looking for. Take it with a pinch of salt & sugar.
Once ConAir flight found 100s of snake on the flight. A man came forward & said he has exp. to catch snake but its too risky on flight. He will charge $10000 per snake. All agreed. He soon caught all & was rewarded. Yr later someone asked how, he disclosed they were not poisonous
Morale of the story is while Gurus may say Naked puts are always poisonous, there may be many that are not. Backtest and keep openmind. May be that’s where the money is if not nag mani.
@KatariyaPran @itjegan Note this strategy by default work for all sideways & bullish monthly candles. You need to test it only for the months that show large red candle. In last 4yrs largest candles were in Feb, Sep, Oct 2018 & few in 2015-16. As per my check it works in all these months.
Even before 2014 it seems to work. For 2008 I could not get data. Prelim check showed this should have worked in 2008 if far strikes were liquid. But we always have option not to execute this strategy in Bear market.
Many have asked by why not do the same on Call. This exact formula does not work on Calls, needs research. Premium on far OTM calls may be half the equidistant Put. eg in Jul 2018 the Call trading at Rs.11 (on jun expiry day) was 11100CE and market closed at 11350. Loss of 250
@KatariyaPran @itjegan This strategy formula selects a unique far strike to Short put, that is strongest ever support level of Nifty50 in current conditions & volatility. Selected Strike has never closed ITM in past. In bear market VIX jump & Srike level move too far to safety. But In bear market avoid
@KatariyaPran @itjegan While trading we set our targets for successful trades at high levels like 36-100% or more & know losses will cut it down to say 20% pa. But if you cap your greed to 12-18% & collect anything that give you 1-1.5% pm you many find aplenty.
10 of 12 months this strategy will deliver 1.5% returns like cake walk but in 2 months it may test your conviction. In past wait & watch always worked but risk management principles require a Stop Loss or Adjustment plan to be in place. I will release most suitable plan soon.
On 27 Dec Expiry day, Nifty Jan Put near Rs.11 was 9700PE @ 12.65 BUT in Jan midway margins changed from 55k to 75k, so we need Rs.15 PE that was 9800PE @ 17.90 . Even after a red candle in Jan both these PE crashed below Rs.2 since 24th Jan & Targets met
For Feb also as per strategy you may need to short the 9600PE or 9700PE to get your Rs.15 or 1.5% returns. It need a hell to break, even bigger then what happened in Sept/Oct for the NIFTY to reach 9600 by Feb 28th. Go on holiday & enjoy.
Alert level for the trade
