This product is about momentum trading using options where all the trades recommended would have a holding period of 5-15 days.
This product is suitable for traders who want to participate trending as well as sideways market scenario. In trending market phase the idea is to capture short term sharp movement in the underlying with limiting their maximum risk by buying call or put. And in sideways market the idea is to capture the premium available by selling call or put. This product is suitable for traders having high understanding of options as derivative product and risks associated with it.
Trades would be given in Index Options and in stock options having high options liquidity. The trades could be either Long or Short in Call Options or Put Options based on analysis of the trend, expected move, time to expiry and implied volatility.
The Trades would be generated from in-depth Technical and Derivative analysis of the price, trend-structure, trend cycle in terms of Long-Long un-winding or Short-Short Covering, momentum, open Interest, Volatility, PCR etc.
Risk: Reward is another major criteria which is taken into consideration and we strive to make traders comfortable and at ease by providing low risk high reward trade.
The risk: reward for this product shall be 1:1 for intraday options trade first target and 1:2 for multiday trades. For Index Intraday reward for Nifty would be min 30points, 60 points for Banknifty and multiday index target would be 60 points min for Nifty and 120points min for Banknifty.
With respect to number of open trading positions, at any point of time we shall have a maximum of 7 open positions. And therefore the ideal Margin required to participate in this product shall be 3-4lakh since we also have selling of options which require margins. Traders can take trades in multiple lots based on the their capital size but for reference calculation purpose we shall show Profit and Loss based on one lot of trade.
- What is Option Striker?
Option striker is the product in which we have to buy the naked option (Stock or index) for the horizon of 2-3 days.
- From which universe option is selected?
We look for the suitable risk-reward criteria, check classical technical analysis, Dow theory, PCR, Open interest data, Institutional data and other technical aspects. Stock must be out of Ban period.
- What is the maximum number of open trades?
- What is Risk-Reward criteria?
Risk –Reward for stock is 1:1 and 1:2. Risk-Reward for Nifty is Intraday 30 points and positional 60 points and for Bank Nifty intraday 60 points and positional 120 points.
- What is Margin Requirement?
Margin requirement for the product is 3-4 lakh.
- Is it necessary to trade in all recommendation?
Yes to match with our P&L one has to trade in all recommendation