Hello friends. I hope you are doing good. Today again I’m here to share an options strategy with you. A high probability options strategy in YESBANK.
From the last few weeks, I’m sharing these Options strategies in Stocks which are giving very good returns. I hope these strategies are helping you to generate some consistent returns through keep volatility aside.
In this post, I will share a high probability options strategy in YESBANK. I will share why I choose that stock and that options strategy in YESBANK. Please read the post till the end and if you find it worthy enough then don’t forget to share with your fellow traders.
- 1 A high probability options strategy in YESBANK
- 2 Looking for the Best strategy for Bank Nifty Future?
- 3 Options Strategies – A Mentorship Program
A high probability options strategy in YESBANK
Before going further, let us look at the chart first. You can see YESBANK gave a very good movement in the last couple of weeks in both directions.
Whenever a stock gave such type of movement, IV starts increasing. Now the question comes in mind,
What is the IV (Implied Volatility) and Why IV is so Important?
In simple words, IV is nothing but the uncertainty in the market or that particular stock. If IV is high, it indicates that there is huge uncertainty in terms of the direction and movement in that particular script.
Implied Volatility is playing a major role in Option Pricing. Option price will increase or decrease with every %increase or decrease in IV (Implied Volatility).
In simple words, If IV is high that means Option price will also high or you can say options are expensive. and IV is low that means Options prices are low or can say Options are cheap.
So what are you doing when things are expensive or cheap. Obviously we will buy when things are cheap and we’ll sell when things are expensive.
The same applies to Options trading. When IV is high we’ll sell options or will initiate a credit spread options strategy and when IV is low we’ll buy options or initiate a debit spread options strategy.
You can learn this deeply in our Options Strategy – A Mentorship Program
Now look at the YESBANK, After the good movement in the last few weeks, we can see IV is high. That means we have to create a credit spread option strategy. Now which strategy we should select and what should be the range? To understand this let us look at Open interest data.
Open Interest analysis in YESBANK
You can see the Highest open interest is at 70 CE and 50 PE. So this could be our range based on current Open Chain data. Same thing we can see on the chart that 70 – 40 is the range for YESBANK.
So 70 – 40 could be our range in Yesbank to initiate an Options Strategy in YESBANK.
One thing we need to keep in mind that whatever data we are looking for or following, every data has its own limitations. It will give you a picture but couldn’t tell you 100 percent accuracy. So you have to keep tracking this data and if you see that there is some change in the range based on data. you can adjust your position accordingly.
So in other words, If you want to make some consistent return, you have to learn these adjustments too. Because without adjustments you can reduce your risk and make some consistent return here.
Options Strategy in YESBANK – Iron Condor
In this strategy, our breakevens are 41.33 & 73.67. So We are safe til YESBANK is trading between these levels. Adjustments required beyond these levels. Risk is around 14k but you don’t need to hold till you lose 14k just do some adjustments or close the strategy if you are losing 5000₹.
You can shift Call spread to lower levels means 1 or 2 strikes below the current strikes after a successful breakdown from 40. Same thing you can do with PUT Spead, Shifty your PUT Spread to 1 or 2 strikes above the current strikes.
To learn these strategies and the adjustments you can join our “Options Strategies – A Mentorship Program
I hope my articles are helping in your profitable trading. If you have any feedback or suggestions please type in the comment box. Your feedback will help me to do something best in the future.
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Much Check this also- Option Buying vs options selling, Modified Condor Option Strategy in VEDL, Bull Call Ladder in ZEEL, Iron Condor in SBIN, Why People Lose Money & Nifty and Bank nifty index analysis with Option Strategy,
Looking for the Best strategy for Bank Nifty Future?
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Options Strategies – A Mentorship Program
On the 1st of September, 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 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