nifty calendar spread strategy
Another factor of calendar spread strategy is you cannot estimate the maximum profit theoretically. Click here to read the disclaimer in full. You can read in details here. Nifty options buying has limited risk but unlimited profit potential, I am going to teach you a trading strategy that can easily multiply your trading capital (money). Remember this option has already been paid off and the trader is at zero risk to keep this till expiry. I have been trading since 2007, but lost a lot of money till 2010. Latest performance with 25 Lot size [JULY 2020 – SEP 2020]: No need to wait for expiry. You learn when to trade, which strikes to sell which to buy, how much profit target you should be looking for, the best place to take stop loss and what to do after taking stop loss – means how to get that money back. The calendar spread strategy in options success for the NIFTY or any index depends on the implied volatility change and underlying price change. I did a lot of research, read books and did countless paper-trading before being profitable. 16.26 lakhs profit in 5 days though results may differ for all. What People Say Just After Reading My Course Moreover stock market investments and trading are subject to market risks. The diagonal spread options strategy is equivalent to calendar spread where short term options are sold, and the long term options are bought. I am sure many of you have traded Neutral Calendar Spreads. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given in this website. Analysis of Long Call Calendar Spread strategy. Reverse Calendar Spread works exactly opposite to Calendar Spreads. We will soon know its not that simple. Assuming you sold an option 200 points up in Nifty current month and bought a next month’s option same strike. I then stopped trading and studied options like college exams. In this trade real Futures are NOT bought or sold. I am a trader like you. For them it is more a Volatility play than anything else. Even if he sells this at break even – he makes good money. ... Let's take an example with Nifty. Calendar Spread Margin: Contracts where futures position at one maturity is hedged by an offsetting futures position at a different maturity would be treated as a calendar spread. This is because the options that are bought are costlier than the options that are sold because the bought options expire later. But please do not attempt just based on what is written here – if the difference is less than 55 on expiry, you will lose money. Bull Calendar Spread: the bull calendar spread strategy can be setup by buying long term slightly out-of-the-money calls and simultaneously writing an equal number of near month calls of the same underlying security with the same strike price. 30 days are remaining for expiry. What Others Charge for Courses 11,200. Crypto Market Cap, BTC/USD, ETH/USD, USDT/USD, XRP/USD, Bitcoin, USD/INR, EUR/USD, GBP/USD, USD/JPY, USD/CNY, DXY, Reliance, INDIABULLS HOUSING, YES BANK, STATE BK OF INDIA, HDFC BANK, TATA STEEL LTD, Nifty, BSE SENSEX, S&P 500, Nasdaq Composite, FTSE 100, DAX Index, Gold, Silver, Crude Oil, Brent Oil, Natural Gas, Bitcoin, US 10Y, Euro Bund, Germany 10Y, Japan 10Y Yield, UK 10Y, India 10Y. The difference is 9000-8945 = 55 points. A Calendar Spread on Nifty Future is traded like this: If you think the difference will be less than 55 on FEB expiry. ... Long added in Nifty and short added in Banknifty. Once you finish the course you can start trading immediately. You can read about me here. If you want to enroll for the course you can do so here. However every trade depends on the trader and his level of risk taking capability, knowledge and experience. Volatility: This is a very important point. The calendar spread margin shall be charged in addition to worst-scenario loss of the portfolio. Simple right? Time Decay factor of near period expiry, if the price of the security remains relatively stable in near period. 6K-7K. PURELY FUTURES CALENDAR SPREAD THREAD. 15.2 – Calendar spread logic. Testimonials Year 2020 to 2023 Look at the image below. . Example on 4 lots or 100 shares): Spot Nifty: 8890 This strategy profits from the different characteristics of near and longer-term call options. In other words I am a sub-broker. The success rate is more than 80%. Yes it can make great profits but one needs some skills to excel in this strategy. Scaling Possible . 100% Hedged So your profits from Feb Future: 8945-8900 = 45. totally risk free strategy better than nifty and bank nifty. Nifty Calendar Spread startegy | Easy Earn | Hindi - YouTube Loss from March Future: 8970 -9000 = -30. On Nifty Futures the Calendar Spreads are actually traded. Please like & share my blog with your friends: One Of My Client Is Making Rs.25k Per Week, Difference Between Other Courses And Mine, Additional Surveillance Margin ASM By SEBI Explained, Nifty Options Trading Tips Providers Will Not Make You Money. The strategy will be successful 1. Calendar Spread is a slightly complex but an interesting options strategy. To know more Call/SMS/WhatsApp me on 9051143004 or email me now. Before reading please understand that for all 5 strategies, strike selection will be taught. 25*10 = (250/1375) * 100 = 18.18% return in 30 days or less just on 10 points. 1) Sale vs. Buy: There is no need to buy next months options. If done on Futures your broker should block only the maximum loss. Strategy: As expected the index to move in a narrow range with a negative bias due to profit-booking, we advice traders to consider a Calendar bear-put spread on Nifty 50. Of course you can do vice-versa if you think the difference will decrease. Which means they keep on selling the next month’s options as soon as the current months expire – same strike. Margin blocked will be the max loss or the points being traded at that time. Live Technical Charts(Java) Free Cash Charts (Intraday/Daily/Weekly); Futures Technical Charts (IntraDay/Daily/Weekly) (Intraday/Daily/Weekly) Options Technical Charts (IntraDay/Daily/Weekly) (Intraday/Daily/Weekly) Continuous Futures Charts This means you expect not much movement over the next few days on the stock or the index. from where to get the figures for interest rates ? I used to employ this strategy in Nifty but insead of buying the current series i used to write them with buying the next series only if required. Note: Calendar Spreads are actually traded on points difference only on NSE as a single trade. You can sell the Calendar Spread and buy it back for a profit later. Since Volatility affects ATM options more than any other option – they make quick profit in a few days time and get out of the trade. It can be at 8500 or 9500 on that day. What Traders Say About This Course Now we are using a fixed 0.60% as a stop loss to minimize risk and increase the profitability. On expiry day of sold options (26-Feb-2015) Nifty is at 9090. 11. Difference = 45-30 = 15 Points profit. The sold option will expire worthless. 1,00,000 in your trading account, so … A Long Call Calendar Spread is the combination of short call and long call option with different expiry. You can sell the Calendar Spread and buy it back for a profit later. An investor, Mr. A is expecting no significant movement in near month contract, so he enters a Long Call Calendar Spread by selling near month strike price of 9000 call at Rs.180 and bought 9000 call for Rs.250.The net upfront premium paid to initiate this trade is Rs.70, which is also the maximum possible loss. Since trades are properly hedged there is no stress in trading my strategies. I am very confident that you will make money trading my strategies. The stock option trade makes 30,000 in one trade and if SL is hit there is a way to recover losses plus make 30k in that trade. It never happens. I only offer education for free on finance, risk management & investments in stock markets through the articles in this website. Analysts are suggesting a calendar spread strategy, which involves simultaneous buying or selling call or put options for the same stock or index at the same strike but of different expiry dates. , Previous post: Technical Analysis Does It Make Money. See visualisations of a strategy's return on investment by possible future stock prices. No. This looks like an easy trade. Testimonials Year 2019 But depending on the Volatility (repeat that again – depending on the Volatility on that day) the price of NIFTY MAR 2015 9100 CE can be: a) The same – Volatility has increased so Time value (Theta) did not have much effect on the option plus Nifty also moved up 200 points. Calendar Spreads are done when the trader thinks Volatility will increase in the near future. But small money accumulated month after month can become very big in only a few years. Since 2011 I am trading Nifty options profitably. Links to my course testimonials pages: With the diagonal spread, the investor has a near term outlook that is slightly more bullish or bearish. In the above example on the 16 th June if bank nifty trade at 18000 then you enjoy the maximum profit. This strategy profits if the underlying stock is outside the wings of the butterfly at expiration. Market eyes on 13K and will most likely to consolidate at 13K. Long Call Diagonal Spread Implementing Long Call Diagonal Spread Trading Strategy. Continue with Your Job Hope I am able to help you understand that Calendar Spreads are more complex than what most of us think about. When your view is Neutral on the stock but you feel Volatility will increase in future. Testimonials Year 2018 The strategy most commonly involves puts with the same strike (horizontal spread) but can also be done with different strikes (diagonal spread). So the profit from the sold options should be more from the loss of theta from the options that were bought. It is not. In contrast if the bank nifty fall in a great way then maximum loss will the premium paid by you while initiating the strategy. This is your trade (Real prices as on 29-Jan-5015. Very interesting & full of knowledge article Dilip Sir.Keep writing..!!! Or 8970-8900 = 70 – 55 = 15. Hence, a hedge in Nifty index via a small interval Bear Put spread is advised to safeguard from any possible pull back. c) Is less than 230 – most possible scenario. Basically his view is this: if the stock remains here for the next 20 days – the ATM option that he sold will expire worthless, but, the options that he bought will still have 30 days time to expire – therefore it should retain a lot of value (though less than what it was 20 days back). 1375 + brokerage. A long calendar spread is a good strategy to use when prices are expected to expire at the strike price at the expiry of the front-month option. Not too much money needed to trade So basically it's a calendar spread? Call me if you need any help trading options on 9051143004. You can just sell the Calendar Spread at 55 points and buy it back whenever it comes in profit or on expiry day. One Of My Client Is Making Rs.25k Per Week This course is good if you have a regular job or business. Testimonials Year 2015 Page 2 b) Aligned towards positional strategy. The Bear Call Spread .. Its a bet between two persons. I didn't use to receive credit but because the current series will expire soon i used to write comfortably. For ex: Buy 8600 Nifty CE December contract and Sell 8800 Nifty CE November contract. Before starting with this strategy you need to keep at least Rs. Why? If the difference is less than 55 points you will lose money. As you can see some months they make good money from the sold call and some month from the put depending on the stocks’ position. Therefore there is no guarantee that everyone will achieve the same or similar results. Depending on the loss on this option the trader makes a profit or a loss. 2) Time vs. It is to profit from the difference of Theta (time value) of the current month sold options vs. the next months bought options. Buy 100 NIFTY MAR 2015 9100 CE @ 230, Total debit: 230-112 = 118*100 = Rs. One Of My Client Is Making Rs.25k Per Week Profit from Feb and Profit from March. 10. Thanks Abhishek. Testimonials Year 2016 He profits from both months’ options. If the stock holds steady, the strategy suffers from time decay. This is best possible situation for the trader. Is The Stock Market Controlled By Stock Operators And Brokers? A calendar spread is a strategy involving buying longer term options and selling equal number of shorter term options of the same underlying stock or index with the same strike price. The liquidity in options are increasing every month. Testimonials Year 2017 India VIX (Volatility): 20.02 (Now that we have a major event next month – Budget 2015 – I assume volatility will keep rising till that day and crunch the next day when the news is out. If Volatility drops – Reverse Calendar Spreads usually profit. We all know that Futures carry a premium. To know more Call/SMS/WhatsApp me on 9051143004 or email me now. It is also called as Neutral Calendar Spread because the traders view is neutral on the market or the stock over the next few days or till the expiry of the sold options. Nifty futures - Calendar spread strategy (CSS): (FUTURES CHART NOT POSTED AS TRADINGVIEW DOES NOT HAVE NIFTY FUTURES CHART. Non directional trades are profitable 80% of the times and make 3-5% per trade (Results may vary). Say on expiry day Nifty is at 8900. Now 9100 is ATM option – when the trade was done it was out of money. It does not matter which side the stock moves. Suppose Nifty is trading at 8800. Bear Put spread is a moderately bearish strategy. For now keep in mind that Calendar Spreads has a max profit point we discuss later. Like Our Facebook Page And Get Instant Post Updates For Life. TA Knowledge NOT required Strike selection while trading Options is the most essential part to succeed. Do Course From Your Home MUMBAI: With markets surrounded by uncertainty ahead of the Union Budget on July 5, wealthy traders could initiate a diagonal calendar spread strategy on the Nifty.This involves the sale of an 11400 put option expiring on June 27 and simultaneous purchase of an 11200 put expiring on July 25 as a hedge against greater-than-anticipated downside. Because profits from the sold options are more than the loss from the bought options. Testimonials Year 2015 Page 2 And Volatility too is unknown to the trader. About the author: This strategy would be called bullish diagonal spread. However we will see that volatility also has a major role to play in Calendar Spreads. Buying one put option and selling a second put option with a more distant expiration is an example of a short put calendar spread. This is the max profit zone as in the image above. Free stock-option profit calculation tool. Selling Put Options on Nifty Stocks. Difference Between Other Courses And Mine Let me warn you. A Calendar Spread on Nifty Future is traded like this: If you think the difference will be less than 55 on FEB expiry. What People Say Just After Reading My Course This is done by professionals when they think Volatility will decrease. I am not responsible for any investment decision you take after reading any article in this website. HENCE PLEASE VIEW FUTURES CHART IN OTHER SOFTWARES TO HAVE AN UNDERSTANDING OF THE CONCEPT) Concept: CSS is a strategy with an objective of profiting from spreads between far month futures and near month futures. Short Call Calendar Spread. If yes tell me do you wait till expiry or book your profits or losses within a specified time/points? Diagonal spread is a kind of options spread where far month option is bought and near month option is sold. CALENDAR OR ANY. I am Dilip Shaw. 2. It mainly profits from Theta i.e. It is done on same strike. Yes liquidity is an issue in India, but in the US many traders sell 10-15% up/down current month’s options and buy 10-15% up/down options expiring in say next 6 months. We have assumed that Nifty is at 9090 on expiry day just below the sold option strike. 8.1 – Choosing Calls over Puts Similar to the Bear Put Spread, the Bear Call Spread is a two leg option strategy invoked when the view on the market is ‘moderately bearish’. Nice to know you are reading every article posted here. The following image captures the month-long movement: Nifty hasn't seen any sudden action in this month so far with the lowest at 10589.10 INR and highest at 11023.20 INR, the highest being just near the present Strike Price of 11010.20 INR. But in reality it is not the case. Nifty is bullish, Trade bullish view using nifty option spread Strategy; Benefits of Trading with Risk Defined Options Strategies; General Election 2019 Results and Nifty Banknifty Options; Upstox Brokerage Review in 2020; Options Trading Strategies to Deploy for Budget Session; How to trade Nifty … Its a bet between two persons. Selling put options is a really simple way for Indian traders to get started with options.. What Others Charge for Courses. Thus by the time they reach the month in which the options were bought – they may already be in good profit. Margin blocked for one lot will be 55*25 = Rs. P.S: So many years of trading has thought me one thing – it is always better to make small profits month after month, rather than lose money month after month trying to make too much money. We really do not know where Nifty and Volatility will be on expiry day. Now lets discuss the best possible situation. Then Feb Future will be at 8900 and lets assume you were right and March Future is at 8970. INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. Butterfly Spread. Modifications did in this strategy: After took suggestions and feedbacks from our clients, we did some modifications in terms of risk in our Bank nifty future strategy. Testimonials Year 2015 & 2016 Copyright Infringement: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement. If you think on the Feb expiry day this difference will increase you can sell Feb Futures and buy March Futures. Implementing The Calendar Spread Options Trading Strategy I will use Nifty for this example. There is more to it. Now I think you can guess why the trader sells current months options and buys next months options. I started trading stock markets since 2007. Because you lose only if the difference is less than 55 points. So right now you have no other option but to buy next months’ options. Some traders make amazing profits like Rs. Hope it helps. My conservative trading course since 2014 is helping many retail traders just like you who have a job or business make consistent profits like this: What Traders Say About This Course You can start trading from any day. Can be done on Futures. Max loss is 55 points (which is very rare). we are offering best ever currency strategy.totally hedging strategy . If the stock does not go near the short options – they keep eating the premium for the next 5 months. Testimonials Year 2016 4. When I will discuss it, you will think its a great strategy which will almost always result in profits. If you’re not sure how to read option chain information, you should refer to this post.. Suppose the Nifty is trading at 8960 on 10th March, 2017. . If not please read the following paragraph to understand this better: Suppose a trader sells current month’s At The Money (ATM) options expiring in 20 days and buys next months At The Money options expiring in 50 days. Reverse Calendar Spreads behave exactly opposite of Calendar Spreads. You need not buy one Future and Sell another. Regular Monitoring NOT Required Bank Nifty Course Testimonials ), Sell 100 NIFTY FEB 2015 9100 CE @ 112 Stress-Free Trading My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website. If the profits from the sold options exceeds the losses from the bought options – the trader keeps the difference. If you change the strike prices they are known as Diagonal Calendar Spreads which I will discuss some other day. That way even if you make 10 points on this, its a great profit. If this option is less than 119 (230-112) on the expiry day the trader will lose money. 3) Can be done on Futures too: Neutral Calendar Spreads can be done on Futures too. I know English and Hindi. Nifty futures - Calendar spread strategy (CSS): (FUTURES CHART NOT POSTED AS TRADINGVIEW DOES NOT HAVE NIFTY FUTURES CHART. Running a calendar spread with calls means you’re selling and buying a call with the same strike price, but the call you buy will have a later expiration date than the call you sell. Directional strategy makes money fast. However my first 3 years were losses. Buying and selling Puts will constitute bearish diagonal spread. 11,800.00. 5. 11 Reasons Why You Should Do The Course: Please consult your broker for more details. Why it looks easy is that the trader thinks that if Nifty goes against the sold options, the bought options will increase in value and save him from unlimited losses (true but he still loses money though limited), and of course if it falls the speed of the profit from the current month options will exceed the loss from the bought options (true and false – because it depends a lot on Volatility and movement of the stock). No need to monitor trades every second. 7. Or if you think it will increase you can buy the spread and sell later. Risk is Limited (But cannot be defined or calculated before the trade is made), Reward is also Limited (This too is unknown; exact profit is known when the trade is closed), 1) Sell 1 Lot Current Month Option Now they can just keep these options as an open free trade of long strangle to look for a quick opportunity to make good profit either side. The spreads are a function of … Hope you understand now. What People Say Just After Reading My Course, Emotional Testimonial by a Young Woman Trader and Her Mother, My conservative trading course since 2014, If you want to enroll for the course you can do so here, lost 7 Lakhs trading speculative trading without knowledge. Its more of a professionals’ trade than a retailers’. For example if they sense Volatility is going to increase for the next few days – they trade the Calendar Spread – mostly on the ATM options. Technical knowledge is NOT required. Diagonal spread options strategy. Testimonials Year 2015 Or if you think it will increase you can buy the spread and sell later. Mumbai: The uncertainty over the market outlook after a 70% rally in the benchmark indices from their March lows has analysts recommending a Nifty options strategy that bets on moves on either sides. its working in all condition market.you can trade also in intra day also but not every day.this is money making strategy no one give you this type of strategy in market. 3. DISCLAIMER: I am NOT an Investment Adviser (IA). For a true Calendar Spread both options sold and buy should be of the same strike price. I am an Authorized Person (AP) of a Stock Broker. Interestingly the above would have been true had the option Greeks remained same for the next few days and the stock remains in tight range. Neutral Calendar Spreads are trade where the trader sells current month’s options and buys next months’ options. The trader has to pay money to trade Calendar Spread. If you still want to try please try on one lot only. When a trader sells a put option, they are obliged to … If you know about Option Greeks, you may know it is because these options have more time value (Theta) therefore they are priced higher. 8) Break-even for calendar spread seems to be very scary to me. For example in the above case its 55 points. You DO NOT NEED to monitor your trades every second. NSE recognizes Calendar Spreads on Futures. They sometimes do it in both Calls and Puts – thus making it a Double Calendar Spread. Since there are just two trades you pay less brokerage. Just a note on margin requirements on Calendar Spreads. However STT is calculated just like its done on a Future trade so that still remains an issue. It is mainly to take advantage of the sharp time decline in options that are close to expiration. I will discuss how you can benefit from this as well. What enticed me towards this was : a) Low margin requirement. I strictly adhere to laws of my country. 9. Testimonials Year 2017 It is more common among professionals and institutional investors because full margin is blocked. In the course you will learn how to select the strike prices. I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other forms of social media. Emotional Testimonial by a Young Woman Trader and Her Mother This is known as Reverse Calendar Spread. One of them wins other losses. In fact you make more when you are wrong in the Future trade. Or. The max profit can be attained only on the expiry day. Please ask your broker for more information. FREE Support For Months. Started trading again from 2011 and never looked back since. Then Buy Feb Futures and Sell March Futures. Testimonials Year 2019 There is a sag otherwise. the risk is here the future premium, it might increases if sentiments improve, it use to be 30 points per month, thus might become 60 points and bring loss, Moving Average Convergence Divergence (MACD). They do not wait till expiry like an amateur trader looking to profit from the best possible situation on expiry day, that rarely happens. Option Greeks especially Volatility plays a major part in deciding what happens to these options; and this is where traders fail. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. (We will soon know the margin requirements on Calendar Spreads.). 6. This strategy is called a Butterfly Spread due to how the Options Graph always looks like. 2) Buy 1 Lot Next Month’s (or any months option expiring after the options that were sold). You get two conservative non-directional strategies on options, one conservative stock option strategy and two conservative directional strategies on Future & Option combination. You need not sell one Future and Buy another – you can accomplish this in a single trade. In India this may not be possible now but who knows what may happen in the next few years. I hope why this trade is made is clear. Testimonials Year 2015 Testimonials Year 2015 & 2016 I know English and Hindi. On options unfortunately NSE does not recognize Calendar Spread as a limited loss strategy therefore full margin will be blocked for selling options. b) More than 230 – Volatility has exploded, increased too much, so much so that it surpassed the option premium eaten by the time value. The trader keeps 112*100 = Rs. You will make profits consistently. Calculate the value of a call or put option or multi-option strategies. This course helps you learn to trade conservative option strategies for monthly income. Yes they pay good cash to trade this – but they also get amazing protection. TheOptionCourse.com Copyright @ All Rights Reserved Dilip Shaw, Founder. This is not as easy as it sounds. One Time Fee For example Nifty is at 8890; NIFTY FEB 2015 Future is at 8945 and NIFTY MAR 2015 Future is at 9000 (real prices as on 29-Jan-2015). You’re taking advantage of accelerating time decay on the front-month (shorter-term) call as expiration approaches. In this article, we will get a basic understanding of a popular, but complex Options Spread Strategy: the Butterfly Spread. Description. Testimonials Year 2018 8. To help you succeed I offer few months support for FREE. This premium gets to zero on expiry day. But that may not be true. Calendar spread is boring strategy wherein we are trying to exploit premium melting speed in shorter and longer expiration. Some amazing profits possible here. 1. If you have read the chapters on pair trading, then understanding the calendar spread logic is quite straightforward. Emotional Testimonial by a Young Woman Trader and Her Mother Testimonials Year 2020 to 2023 NO Software Required I was exploring various option spreads strategies and was checking the margin requirements for spreads on zerodha site, when i came across the nifty futures calendar spread. HENCE PLEASE VIEW FUTURES CHART IN OTHER SOFTWARES TO HAVE AN UNDERSTANDING OF THE CONCEPT) Concept: CSS is a strategy with an objective of profiting from spreads between far month futures and near month futures. This simplified approach assumes that the current price of futures is a reflection of everything known in the market. It only looks easy. I would be explaining the example using Diagonal Spread with Long Calls and for this, I will use the example of NIFTY (Ticker – NIFTY) Following is the Option Chain for NIFTY We would now take 2 Call Prices from April 2018 and May 2018 For April 2018: For May 2018: In this trade real Futures are NOT bought or sold. You can do this course from your home. The current month option will expire before the next month options, and the trader can profit. If the implied volatility will increase. Volatility remained the same or decreased.
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