Hello Guys. Hope you all are doing good. Today I’m sharing the Modified Condor Option Strategy in VEDL.
Condor is a limited risk strategy and it can give you a consistent return but as you know whatever plannings we are doing is based on an assumption that it will happen in near future based on previous price action.
It will happen in real or not only the market knows. So we have to be ready for all the possible situations. We have to create a trading plan to consider all the possible scenarios.
Now the question comes in mind, why the trading plan is important? See, Profit will not come with your entry in a trade. Profit will come based on how you manage that trade.
Just a good entry is not enough, good trade management required to make consistent money from this share market. So if we consider all the possible scenarios and keeping our plan ready for all the situation in advanced then only you can make a better decision between your trade.
And if we can make better decisions that mean we can manage our trade well. Now the question comes in mind that, How can we make a trading plan based on all the possible scenarios in advance?
My answer to this question is: We have to learn all the basics about options and the adjustments. Means how can we do the proper adjustments if script starts moving against our prediction or script starts moving out of our breakeven points? These basic things need to be clear, then only we can create a good trading plan.
So my suggestion is: Before just took a trade randomly without understanding the basic concept, better we should learn, why we are doing this and how we will manage this trade. You will learn all these things in our Option Strategies – A Mentorship Program.
Modified Condor Option Strategy in VEDL
Let us look at the chart first. You can see VEDL is trading in a range (130 – 160) from last few months. Around 140 VEDL took good support on 10 OCT and we say a rally till 160.
Again VEDL is trading around 140 which is a good support level. Now from here, there are three possibilities. Either VEDL will go UP or down or it may consolidate between the range (140-160).
Open Interest analysis in VEDL
Based on Open Interest data, You can see Highest Open interest stands at 160 CE & 140 PE. You can see that there is very good Open interest standing at 145 CE & 150 CE too.
It indicates that 140, 145, 150 & 160 are the most important levels for VEDL. Overall PCR stands at 0.38 which indicates an oversold zone.
PCR at 140 is 2.34 indicating an immediate support level around 140. PCR at 145 is 0.38 which indicates an immediate resistance level for this expiry.
As you can see that 140 is acting as an immediate support level so we can expect some reversal from here. Although we haven’t got any reversal signal right now, we can expect that VEDL will take some halt here.
Now as you can see that there is a good possibility that VEDL can go down from here. So next support might be 130. So we will create a strategy based on both the support levels (140 & 130).
Modified Condor Option Strategy in VEDL
- Buy 135 CE & 150 CE
- Short 140 CE & 145 CE
As I shared in the beginning that we have to keep our trading plan ready based on all the possible scenarios. So what should be our adjustments if VEDL starts moving against our predictions?
You can see our breakevens are 136.5 & 148.5, that means we will not loose till VEDL is trading between this range. Now if VEDL gave a breakdown from 136.50, We will square off 150 CE, will convert 145 CE into a long trade(Means we’ll book profit in 145 CE short trade and will convert this into a long trade) and will short a new lot of 132.50 CE.
Our new position after adjustments will be:
- Long – 145 CE & 135 CE
- Short – 142.50 CE & 132.50 CE.
One Breakout from 148.50, we’ll Square off 142.50 CE and will short 152.50 CE. Keep all 3 legs as it is.
To learn these adjustments in more deeply you can enrol in our Option 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 future.
Please type your queries related to Modified Condor Option Strategy in VEDL in the comment box. I wish you profitable trading.
Much Check this also- Bull Call Ladder in ZEEL, Iron Condor in SBIN, Weekly Analysis & Option Strategies For 10th Oct Exp, Why People Lose Money & Nifty and Bank nifty index analysis with Option Strategy
Looking for the Best strategy for Bank Nifty Future?
We Introduce a new Bank Nifty Future strategy for Intraday. Gave a 90% return in the last 6 months. Please check the link below for more information.
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