Thread by @Mostly_Momentum

I KEEP A BULLISH BIAS IN OPTION (OVERNIGHT SELLING) SETUPS, HERE’S WHY:
 
#StockMarket #Nifty #OptionsTrading #investing #trading
 
THREAD 🧵:

(Data: 17th Sept. 2007 to 21st Sept. 2022) (Nifty Levels: 4,518.45 to 17,718.35) (data source: @YahooFinance):

From the above chart it is clearly visible that more than actual gains came over night.

Note: Decimals have been ignored, that’s why actual calculation might slightly differ.

Multiplicative Method:
Actual Nifty Returns: 292%
Of which Overnight Returns were: 3,580%
And Live Market Returns were: -89%
i.e., Nifty Returns (292%) = { 1 * (1 + 3,580%) * [1 + (-89%)]-1 }

Additive Method:
Actual Nifty Returns: 13,200 points (292%)
Of which Overnight Returns were: 34,166 points (756%)
And Live Market Returns were: -20,966 points (-464%)
Nifty Returns (292%) = (756% - 464%)

Following are the screenshots via @stockmock_in displaying the same:

(For the time being I am ignoring risk management)
(STBT: 1 Lot at 3.28 PM and squaring off at 9.16 next trading day)
(15th Feb 2019 to 21st Sept. 2022)

Image 1: Selling Naked CE (Bearish Position): Loss of Rs. 1,172
Image 2: Selling Naked PE (Bullish Position): Profit of Rs. 99,595

Conclusion: I am always 1 notch bullish.
 
When setup says: Bearish, I am Neutral
When setup says: Neutral, I am Bullish
When setup says: Bullish, I am Extremely Bullish
(Currently following this only last 3 days of weekly expiry, may change in future)

#StockMarket #Nifty #OptionsTrading #investing #trading

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