- This strategy will give its result in minimum 1 month time frame so you have to patience.
- Entry period is at start of expiry month or 1-2 days before it.
- Exit will be at expiry hours or 1-2 days before it.
- Need minimum 2 lakhs capital for stock options while for index option around 1 lakhs is sufficient to get 10-20%. Or in multiple of this minimum capital.
- In 90-95% times losses does not occurs but in very volatile or on major collapse or rise, minor losses can be expected.
- Always choose very liquid index or stock options to trade this strategy. Traders must keep stop loss as per risk profile or if loss exceed 5% of total capital invested.
- To lock profits if you are having multiple lots capital then can follow accumulate strategy.
- No loss option strategy : “in this strategy, You have to write extreme in the money call and put options at the same time and hold them till expiry. This strategy always pays 10-20% average return on capital”
stock no loss option strategy
For example, take this reliance Aug expiry stock options. On monthly pivot point chart, r2 is 1130 while s2 is 930. So at start of month if traders write, 1120 put option and 940 call options. 1120 put options which was trading at 124 rupee premium on 31 July 2015 .and 940 call options was trading at 71 rupee premium on 31 July 2015. So to write this options, SPAN and EXPOSURE margin will be around 60,000 rupee and total premium paid will be 195. So premium value is 195 * lot size 250 = 48750/-. So total capital required was almost 1.1 lakhs rupee. On 18 Aug 2015, reliance stock is trading at 946 rupee level. Which was trading at 1002 rupee on 31 st July 2015. Now, 940 call option is trading at 21 rupee and 1120 put option is trading at 157. So on 18 Aug 2015, total premium gain will be 17 rupee. Means Rs. +4250/ profit which is almost 4% return on capital till date.at expiry with market movement this will get extend to 10-20% return on capital.
Index no loss option strategy
Now see index option example for this no loss option strategy. As above nifty monthly pivot point chart shows, in august 2015, nifty r2 was at 8840 and s2 was at 8140. So at start of month traders can write 8800 put options and 8200 call options. Right now nifty is trading around 8500 and on 31 July it was trading at 8570. On 31st July 2015, nifty 8800 put option premium was at around 350 rupee and nifty 8200 call options premium was 395. Total is 745 * nifty lot size 25 = 18,625/- Total required SPAN and EXPOSURE margin will be around 25,000/-. So total capital required to trade nifty no loss option strategy was around 45,000 rupees. On 18 Aug 2015, nifty 8200 call options premium is trading at 300 rupee and nifty 8800 put option premium is trading at 280. Total 580 rupee so total gain of 165 rupee premium on 18 the Aug 2015. Means Rs. +4125/- gains. On total capital investment it is almost 10% return till date.