Best Option selling Strategy for Monthly Income

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Hello folks! Hope you are safe and healthy in this COVID-19 pandemic. On our website, I’m sharing some good options strategies, so that all can make money together. Today I’m, sharing one of the best option selling strategy for monthly income in DLF.

The best option selling strategy is “Iron Condor”. Iron condor strategy is a limited risk option strategy to get the benefits of a range-bound activity in the stock. Why I’m saying it the best option selling strategy? These are the reasons:

  • It’s easy to learn and impliment.
  • Its easy to adjust if script is breaking UP or Breaking down from your range.

I have shared a detailed article about how to deploy an Iron condor strategy in any stock. You can go through that article for better understanding.

I’m dividing this article in 2 sections. In first section I will answer why I choose DLF for this best Option Selling strategy i.e. Iron Condor Strategy. We will find a range based on the chart and the Open Interest data.

In the second section, I will share the strategy with its adjustments. So read this post till end to understand better. If you have any query, question or suggestion, can type in the comment box.

Contents

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Best Option Selling Strategy in DLF

Let’s start with the first section. The first and the main criteria to choose an iron condor strategy is that Stock should be in a range. To understand this lets look at the DLF chart.

DLF chart

After a good rally, we can see DLF is trading in a range of 320 – 280. We can expect further levels only after a sustainable breakout or a breakdown from the said range.

So based on the first criteria, DLF looks good for our best option selling strategy. Now to confirm this range, we can analyze open interest data of July Expiry.

Open Interest analysis for the best option selling strategy in ADANIPORTS

DLF Open interest analysis

Based on the Open interest chart, we can see that 300 – 310 is acting as an immediate resistance zone and 280 – 270 is acting as an immediate support zone. Max pain is at 300 indication expiry level.

This is confirmed with Open interest that 310 to 270 can be the range in DLF for the coming sessions. So we can use this range to make the best option selling strategy (Iron Condor strategy).

Best Option Selling Strategy for DLF: Iron Condor

Best Option Selling Strategy

Possible adjustments for this best option selling strategy

You can follow these adjustments:

First, you can follow these breakevens (265 & 320) as a stop-loss means you can close your strategy after a breakout or breakdown from this range.

or

If the loss is more than 5000₹, close this strategy.

or

Shift your call spread to 280 after a breakdown from 265. Means book profit in existing call spread and initiate a new call spread with 280 CE SELL and 290 CE BUY.

Same thing you can do with PUT spread after a successful breakout from 320. Means shift your put spread to 310 i.e short 310 PE & BUY 300 PE

If you want to learn these option strategies with proper adjustments you can enroll in our Option Strategies – A Mentorship program.

I hope my articles are helping to trade with these options strategies. Which strategy you are using to generate your Monthly Income? Do let me know in the comment box.


Options Strategies – A Mentorship Program

On the 1st of September 2019, We have launched a new mentorship program for Option strategies, in which we are discussing how can we deploy these strategies? What rules we should follow before taking a trade? and what should be our adjustments if the script is moving against your direction?


DISCLAIMER: – we are not a SEBI research analyst. Views and the iron condor strategy posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this article or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods.  This information should only be used by investors and traders who are aware of the risk inherent in securities trading.

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Sachin Sival is the founder and CEO of Replete Equities, an options trading company that specializes in delta hedging. A self-taught trader, Sachin has a passion for volatility trading and stock trading. Sachin loves to hone his skills by reading up on new strategies and techniques as well as taking part in industry events. In addition to being a successful entrepreneur, Sachin also takes pleasure in photography - as a hobby.

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