Hope you all are doing good. Finally day has come. So ready to deal with this highly volatile event??
Many were asking for Election Result Day strategy for Nifty. Here is our strategy.
As we all know that this is highly volatile day, so no data can give us proper direction of market. So we need to initiate a strategy which can give us proper hedge in any direction with any movement or any risk / fall in Implied Volatility. Right now Implied Volatility is very high and most of the time IV fall down sharply after event is over. So we need to focus on 3 things, delta, Vega and theta. So in this strategy I’m trying to keep delta & Vega on neutral side and theta on long side. Lets come to our strategy:
Election Result Day strategy for nifty : Calender Spread
In this strategy I sold CE & PE for current expiry (23rd May) 1 lot and bought CE & PE next week expiry (30th May) 2 lots. Total capital required is around 2 lakh and you can see it’s no loss strategy. So no need to worry about breakevens or adjustments.
Why I choose these strikes?
According to option chain data highest open interest stands at 12000 CE & 11000 PE, SO m keeping these levels as support and Resistance and sold my CE & PE AT these levels. Rest two strikes I took to hedge my position.
Election result day is highly volatile event and only suitable for little agressive traders. So stay away from market if you don’t how to deal with this event.
I wish you a safe and profitable trading.
If you need More real-time assistance on these strategies, Can open a trading account with us and you will get real-time assistance on every month on these hedging strategies.
DISCLAIMER: – we are not a SEBI research analyst. Views posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product 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.
8+ Years working as a derivative trader, Option Writer, Blogger, Trader by passion, Keen Follower of Indian share market