How To Use Straddle Strategy to Make Money in Options.
Last week, We discussed why we can trade options even if you do not have any Directional view on underlying assets.
I suggested on first
week of March to take position for Nifty 15000 call and put Writing that time combined premium was @ Rs.700 Plus. Lot Size is 75. Approx Premium received was 50K plus.
See this in below mentioned picture Today Nifty 15000 Straddle combine Closing was @ Rs 460.
You can Such Strategy only if below to criteria is met.
1. Open Interest of Call and Put is Amost Equal. See in picture 19 Laccs Plus for call and put
2. Only if market is on urge of consolidation.
If both this conditions are met then Straddle will give you Best Return if you take your position till expiry.
Anyway, we suggest you to take such type of trade only if you are smart enough to manage your position.
As Options writing always has one disadvantage that your Losses would be unlimited.
However, hidden beauty for writers is that Time would be in there favour only.
Assume that if Nifty trade between 14300 to 15700 range in between till its expiry and at expiry if it is closed around at 15000 Magical figure so you will Make Fantastic money in this case.
However Looking at this week Data 14900 Straddle Looks Impressive.
Market Trends still not in Bearish Trend.
Look at todays FII activities in Market. They are still Buyer in Market.
Retail Investors Should follow only one strategy that all Dips in the equity market shall be bought and wait for market to one swing
From,
Market Learning Academy.
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