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Weekly analysis with option hedging strategies for 3rd Dec Exp

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Hey folks! I hope you are safe and healthy in this COVID-19 pandemic. Its a tough time and staying safe is more important than anything else. So, please follow the guidelines shared by the government. In today’s article, I will share the weekly analysis for Nifty and BankNifty along with option hedging strategies for coming week expiry.

In this article, I’m sharing the adjustments too. So read this post till the end to know the option hedging strategies we are creating this week and adjustments you can follow if the market is giving a breakout or breakdown from our range.

Before we go further, I want to share a few points for “Why you should learn and implement these option hedging strategies in your trading and investing?”

We both are trading with our own style, system and techniques. But one thing is common for everyone, that is “Risk Management”. Because risk management is the only holy grail to succeed in this stock market. Why? Let me share something to understand it better.

As you know, we are living in an uncertain world. Any day, anything can happen. And when you are trading with a highly liquid market that can react heavily even with small news or rumour. It is more important that you should always keep yourselves ready for the worst. And to keep yourselves ready, you should keep more and more focus on the risk management.

The reason is obvious: If you don’t have proper risk management rules, anytime, the market can hit you badly. Now, I hope you understand the importance of Risk Management. But why it is important to learn these option hedging strategies to manage your risk?

You can be a trader or an investor having an overnight position; there is always a risk that the market can open with gap-up or gap-down. Your nights can be horrible if you have a naked position with unlimited risk because stop-loss will not work with an overnight position. Here options come in the picture. You can easily hedge your position with the options. And that’s the main purpose to introduce this product called “options”.

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You can hedge your entire portfolio with these options. You can hedge your cash positions, your future positions or even you can hedge options too. To understand it better, let me give you an example.

Let’s say you have a portfolio with different stocks and the value is around 10 lakh and you are expecting some downside movement in the coming sessions. You can easily limit your risk by adding some Nifty PUTs in your portfolio. It will not only limit your downside risk but will increase your overall return too.

In the same way, you can hedge your futures and options. Now, what is the main reason I’m trading with Option hedging strategies only?

When I started my trading career, I was trading futures and keeping my positions open for overnight. But the main drawback with an overnight position is that we have unlimited risk. Only one bad trade can hit you very badly. It can eat your all the yearly profit and capital too. And if a trade is running with a huge loss that you can’t afford that trade will become an emotional trap for you.

You can’t make a proper decision for that particular trade. You will try to hold that trade with a hope that it may reverse and you may close it with some lesser loss but the results you may know already. So if you want to be a successful trader, the first thing you have to learn is: “How to control your emotions?” And you can only control your emotions if you have limited risk.

That’s the main reason I have started these option hedging strategies. These strategies are not only helping to manage my risk but generating my monthly cheque too. When I can make 3-4% monthly with these option hedging strategies why to take an unlimited risk to generate the same return? What you think, M I doing right? Share your thoughts in the comment box.

And if you want to learn and earn with me, can enrol to our Mentorship Program. Click on the below button for more details and offers.

Nifty weekly analysis and Option hedging strategies

Nifty chart today

After a good rally, We can see Nifty is trading in a range. May be restoring its power for the next bull run. But if we talk about the range based on the chart, 12800 – 13150 is the range we can expect for the coming week, until we are not getting any breakout or breakout.

Now, if we got a breakout from 13150, next target will be 13550 and after a breakdown from 12800, next target will be 12500. You can read it like this also: Resistance 2 = 13550, Resistance 1 = 13150, Support 1 = 12800 & Support 2 = 12500.

One thing you should keep in mind that, IV is high so a limited risk strategy is only advisable. Let us look at the OI data to know the range based on Open Interest.

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Nifty weekly option chain analysis

nifty weekly option chain analysis for option hedging strategies

Based on option chain data available at the time of writing this post, the highest Open interest stands at 13000 CE & 12800 PE, followed by 13500 CE & 12900 PE. PCR of all strikes is 0.94, which indicates a neutral market. PCR at 12800 stands at 3.36, which is acting as an immediate support level.

The Put-call ratio at 13200 stands at 0.07, which is acting as a resistance level. Equally, important indicator Option Pain is at 12950, indicating weekly expiry at 12950. A shift in option pain will provide further levels of expiry. So keep tracking max pain.

Significant open interest buildup on both side. Indicating good pressure from higher levels. So based on the OI, the possible range for this week should be 12800 – 13200.

Keep tracking change in open interest to analyze market participant’s behaviour, so that you can adjust your position accordingly. If you don’t know how to do weekly analysis to find the best Weekly nifty and bank nifty weekly options strategies. Just enroll for our Option Strategies – A Mentorship Program.

Nifty Weekly options Strategies: Iron Condor

nifty option hedging strategies

Possible adjustments for Nifty options strategies:

Initially, you can keep a stop loss of 12750 & 13250 for this strategy. Means square off if you find nifty is giving a breakout or breakdown. Or you can do this adjustment too. ( Do not hold this strategy is loss is more than 2000₹).

If you find that Nifty is giving a breakdown and sustaining below 12750, then square off call spread and bring it down to 400 points lower levels. and make it an iron condor.

The same thing you can do with put spread means if you got a breakout from 13250. You can shift your put spread to 400 points up.

If you want to learn how to do weekly analysis to find the Weekly nifty option hedging strategies with adjustments in more practical ways with live mentorship, You can enrol in our Option Strategies – A Mentorship Program.

BankNifty weekly analysis and Option heading strategies

banknifty support and resistance for tomorrow

After a good rally, BankNifty is taking some rest and trading in a range of 28500 to 30800. A breakout from 30800 will lead to the next target of 33600.

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On the downside, 28500 is acting as a strong support zone and a breakdown from 28500 will lead to some lower levels at 26800 & 25500.

The overall trend is UP and there is no sign of weakness, so do not initiate a short position. Look for a long opportunity and trail your stop loss and keep your positions with a proper hedge.

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Weekly Bank Nifty options chain analysis for option hedging strategies

banknifty option chain analysis

Based on Bank nifty option chain data, the highest Open interest stands at 30000 CE & 29000 PE, followed by 31000 CE & 28500 PE. PCR of all strikes is 0.88, which indicates a neutral zone. PCR at 28000 stands at 5.08, which is acting as an immediate support level.

The Put-call ratio at 30000 stands at 0.08, which is acting as a resistance level. Equally, important indicator Option Pain is at 29500, indicating weekly expiry at 29500. A shift in option pain will provide further levels.

If you don’t know how to do the weekly analysis to find your bank nifty weekly option hedging strategies, Just enroll for our Option Strategies – A Mentorship Program.

BankNifty weekly options Strategies

banknifty option hedging strategies

Possible adjustments for Bank nifty weekly options strategies:

Possible adjustments for this weekly Bank Nifty option Strategies are:

  1. Follow a stop-loss if the max loss is above 2500₹, close this strategy.
  2. If you find that Bank Nifty gives a breakdown and sustaining below 28800, then shift your Call spread to 1000 points down. The same thing you can do with put spread means if you got a breakout from 30400. You can shift your put spread to 1000 points up.

If you want to learn these bank nifty option strategies with adjustments in more practical ways with live mentorship, You can enrol in our Option Strategies – A Mentorship Program.

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Post your comments in the comment box if you have a query related to the weekly analysis and Best Nifty and Bank Nifty options Strategies. You can ask any question related to option trading in the comment box.

If you need More real-time assistance on how to find the Nifty and Bank nifty options strategies, Can take our premium subscription or open a trading account with us and you will get real-time assistance every month on the weekly analysis with Nifty and bank nifty options trading strategies. You can contact us on WhatsApp

*( Please avoid any question like which Call or Put we should buy in the coming week).


Options Strategies – A Mentorship Program

On September 01, 2019, We have launched a new mentorship program for Option selling strategies, in which we’ll discuss how can we deploy these Options strategies? What rules we should follow before taking a trade? And what should be our adjustments if the script is moving against your prediction?

The best strategy for Bank Nifty Future Intraday

We introduce a new BankNifty Future best strategy for Intraday. Giving a decent return consistently. Please check the link below for more information.


DISCLAIMER: – we are not a SEBI research analyst. Views or the weekly analysis with nifty and bank nifty options trading strategies 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.

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8+ Years working as a derivative trader, Option Writer, Blogger, Trader by passion, Keen Follower of Indian share market

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