STRAP -

BULLISH STRAP - BUY 2 ATM CE and 1 ATM PE . All legs are purchased at the same strike
price.

BEARISH STRAP - BUY 2 ATM PE and 1 ATM CE . All legs are purchased at the same strike
price.

MODIFIED STRAP STRATEGY - Customised EXECUTION PHILOSOPHY by RAJAN SIR

1.Here we buy ATM CE and ATM PE at ​SAME PREMIUM. ​We buy ATM CE and PE prices as
close as possible.
It is very safe to get strike prices which are symmetrical and also with same premium.
For example when NIFTY was at 10754, 10700CE and 10800CE was at 119.5.
Which is better choice as the ATM Strikes 10750 CE and 10750 PE was not at the same
premium.
2. Place strict Stop loss of 10rs or 7r for both the Legs
3.So next place orders for further OTM strike prices CE and PE at 10Rs ABOVE from CMP.
Executed Order - Leg1 BUY ATM CE say x
Executed Order - Leg 2 BUY ATM PE say x
Pending Stoploss Order for Leg1 - SL SELL ATM CE at x - 10 or 7
Pending Stoploss Order for Leg2 - SL SELL ATM PE at x - 10 or 7
Pending Order - BUY OTM CE - CMP + 10
Pending Order - BUY OTM PE - CMP + 10
4. Wait for SL to Hit in any one side is done on STEP2. Either of the following may happen

Case - 1 IF Case - 2 IF
UNDERLYING UNDERLYING
(NIFTY) GOES UP (NIFTY) GOES DOWN

Executed Order BUY ATM CE say x IN PROFIT Exit - SL HIT

Executed Order BUY ATM PE say x - Exit - SL HIT IN PROFIT

Pending Stoploss Order for Leg1 - SL CANCELLED ​Executed - SL HIT

SELL ATM CE at x - 10 or 7 -

Stoploss Order for Leg2 - SL SELL ATM ​Executed - SL HIT CANCELLED

PE at x - 10 or 7 -

Pending Order - BUY OTM CE - CMP + 10 Executed CANCELLED

-

Pending Order - BUY OTM PE - CMP + 10 CANCELLED Executed

5. Cancel the stop loss orders. Once strategy goes in right direction take profit.
6. If you find after one side has triggered and u r not making money square off by 12:45 or 1:30
latest.
7. This can be done for small profit at least 3 to 4 times a day
8 Best time to make good profit is enter at 12 and exit by 1 and take another position by 1:30.
THe same can be done in selling side to . But when index is in sideways mood , erossion is less
but we are getting higher premium on any 1 side.

Example
When nifty is at 10850.
Buy 10900 CE at 106 with SL 99
Buy 10800 PE at 106 with SL 99
Place trigger price Limit order for 11000 CE at CMP + 7
Place trigger price Limit order for 10700 CE at CMP + 7

STRATEGY1 - SHORT CALL BUTTERFLY

VIEW -​ ​First when we see market is range bound but with a bullish range​ . In bank nifty say gap
up of about 100 pts and market just consolidating and we r thinking long
We can short call butterfly
Let's say market opens at 27900 tomorrow only for number sake
Then we wait till 9.45 see if what view we thought as it's opened gap up and we
think market will move another 100 to 150 pts
VIEW - ​For bank nifty this is neutral trend in my view so only i am taking 350pts as neutral for
study purpose
Diagram can be drawn I will give rough pic

Left point is itm call buy right most is otm call buy and the middle is call sell point
The slopes on both sides are making money and when straightening out is the PT of break
even.The v in between is the point you shd be vary of because here you lose money on
premium decay in buy calls as they are varied but the calls you sold have same strike.. but it's
very minimal and generally u will not face it

Here after 9.45 we

Banknifty at 27900
Buy 1 LOT ITM CE 27800 call 1 lot
sell 2 LOT ATM CE 27900 calls 2 lots
buy 1 LOT OTM CE 28000 call 1 lot

Try to sell calls premium equal or more than the buy premium

VIEW - ​Have u guys noted we have taken a position where we are thinking long
1 case market goes against our view and comes to 27850
We remain to lose money in both our calls we bought but profit in our calls we have sold if you
calculate the difference overall profit only
2 case market further falls 27800 is breakeven point where you stand no loss no gain
3 case market is at 27850 here our loss is from call sell and profit from buy calls
So when either breakpoints are breached or by experience and individual mentalities we can
square off either side any time during 27800 to 28000 and hold on to profits
This is an intra day and also can be done till expiry with own thoughts of building up on your
winning positions

Student - as you say it can apply in trending market, what is market goes sideways sir
Teacher - No I said neutral market Is the same as sideways
Student - ok sir, after gap up..to neutral

If say market remains just 100 PTS either way u r still in profit Gapup or gapdown
I took bnf as it is volatile and has a movement of 100 to 150 PTS intaday almost everyday

Sir, In strategy1- SHORT CALL BUTTERFLY

i understand that when market moves both up or down, we get profit immediately on THE SAME
DAY, But when market moves sideways, our main source of profit is from the 2 ATM CE
SHORTS. In that case, will the time value premium erosion is going to be our profit. Still will it
give profit in intraday? or we should go for positional ?
The best thing about them is we generally never lose money in them an if we do it's because of
emotions by holding on to wrong side or book earlier. Usually the strategy finishes by squaring
all positions which gives u guaranteed profit or breakeven. It's like I said earlier we hold to
winning positions but that sometimes backfires
sir we read butterfly in books also, but never applied, so want to know its sucess rate from your
learnings..
[10:15 AM, Like u said earlier a strategy is loss and gain . This gives No loss And gain
ok, breakeven or profits..
Yes
Sir at breakeven we should exist or wait for reversal
And if market is down by 100 points Then same thing we should do in puts ??
You must start to think independently 50 PTS before breakeven as at that point u will have
small profit
Or think on which side trend and how old to other positions which is at own risk
Sir actually 50 points movement in banknifty is very sudden
Markets are very complicated as we all know all I try to do is simplify it
Right if you talk intraday you must act fast but even if you miss it you can square off 1 side 100
PTS and hold other
If u want u cannot simplify more buy taking 27700 call and 28100 call
This also complicate it to take it as positional as a complete strategy for next day
Sir can u suggest any low risk banknifty weekly strategy
I usually square sell side intra and if goings good hold on to buy positions. This saves margin
but you must consider time decay in buy call
I usually square of very next day unless there a big positive directions forward and I build onto
that position
This can be done everyday in bnf

Doubt2
all the legs are from monthly expiry or current week expiry or next week expiry?
Could be done in both
When you take weekly then from Tuesday onwards sell next week calls as decay or up will be
less
In bank nifty when to take position at 10 am or ??
Start to study from 9.15 to 9.45 this is 30 mins which generally gives the traders mindset of the
day on index as well as stocks. After the night study the traders take their positions mostly at
that time
Sir confusion whether take weekly or monthly as I thought in weekly decay is fast so we can
earn from atm decay
And if you note down close high low open PTS at that time frame usually the stock moves in
that band and if breaks out of this band then you have the trend up or down
Long poistions can be of the same week ?
When you build up on your strategy you buy month end calls

Sir in banknifty what positions you took in last week if u share day wise it will be more clear
What is the success rate.
Sir take this strategy in bnf almost everyday and on an average I get 700 to 1000 by 2.50
Even market goes down I get the same numbers
That's good. And Max loss in one trade?
If it goes up then hold on till 3.25 then more++
20 point is good
If there is loss u just have to square off on time
Only brokerage u have to work on open up with guys who give low brokerage
How much point risk we have to take
I said 100pts before u must take a decision
U can wait till 150 PTS then u are in such a tightly emotional that you make a wrong decision
which happens out off hand

STRATEGY 2 LONG IRON CONDOR

VIEW​ - ​FOR NEURAL / BEARISH ​market means market moves 150 to 200 PTS down
Well long as well as bearish can be done with both calls and puts
Ok so long iron condor is a strategy when we think markets not moving but could do 150 to 200
downward movement
Again a rough pic Guys I will try do give neat pictures later

Banknifty now at 27900

Sell 1 lot itm put i.e 28000
buy2 ATM puts i.e 27800
sell 1 lot 27700 put
Here break even at 27700 and 27900
Here also we start think to square of from 50 to 100 PTS and hold to winning positions
If buy is active profit can be held on If sell side active limited profit so I suggest take profit and
do strategy next day U could be free to do new strategy according to movement of market
Break even at 28000 and 27800
closing prices as on 23-08-2018
SELL 28000 1 LOT PREMIUM Received = 209.85
BUY 27900 2 LOTS Premium spent - 2 x 151 = 302
SELL 27700 1 LOT PREMIUM Received = 120.55
so net premium received = 302-209.85-120.55=28.4 .this is a credit spread

Here either way market moves u will make money till breakeven by then either square off all
positions or hold on to moving direction
If you take overnight position then for selling you will get the premium next day or if not sold the
puts you bought the difference of 13 rs. that is the difference between premium
generally we sold atm pair for intraday to collect some premium about 10 to 15 points... and it
continues..., yours opinion on this sir
sir that is a very good point I hold on sell calls which are far placed like 350 to 400 PTS away in
weekly bnf but you should do both put and call far away strikes this will 100% give u 10 to 15%
returns which is almost 3 to 4 k. I do strategies on that too by hedging buying next strike call and
put This is better
please clear this once again
now market is poised at 27900 ranges and I personally feel market will open gapup and trade
above Thursdays highs so taking this into picture I expect range 28100 to 28300
Max pain should be checked on Monday morning to confirm
ok sir, as per market situation will work on otm pairs, thanx sir... got it
Then if pain is at 28100 say then sell 28500 call and sell 27700 put
U can sit till Thursday to figure out on closing
27700 is 90 rs Now
basically if u analyze it is the writers of put or calls who make 💰
So on that we have to keep tab of the market pain at all times
This is the point where max puts and calls have been written
This changes over a period of time if we understand the max pain the bulk of traders are
angling for then helps us on a intra day basis to close positions
Otm calls and puts are very attractive for retail trading but has its own disadvantages like very
low premium should we take a position for a few thousand rupees but when u invest 1.5 lk and
get 2 to 4 k it's very lucrative
But what happens on an average market of bnf moves only 300 to 400 on an average growth or
fall so enough time to recover
yes, seller has to always keep eyes on market movements even in hedging position..

One thing if we make both at same time?

I mean both strategy short call butterfly and iron condor with put
Which 2 ones
 Earlier short call butterfly was for up and iron condor with put for down
First and second. U try at same time
Yes if one goes wrong then that time second giving profit
No

These strategies are almost loss free so even against your trend you make less money
U can add a strategy to an existing winning call or put

I​ f it can always give profit or no loss...why don't we do same everyday .. why to check for gap
up or down......

STRATEGY 3 SHORT IRON CONDOR

VIEW - ​ markets ​NEUTRAL TO BULLISH/UPTREND ​ market

BANKNIFTY AT 27900
buy 1 ITM pe 28000 and
sell 2 atm puts 27900
buy otm 1 lot 27800 pe
Simple right all books give it but we have to understand it
See the difference in condor strategies
One long one short
Take the market price and fill in please it will help
This again break even PTS are easy to find
209+120=329
329-151-151=27

STRATEGY 4 LONG CALL BUTTERFLY

VIEW - Now we go for ​NEUTRAL TO BEARISH​ or no trending market and build strategy with
calls

Sell itm ce 27800 ce

buy 2 atm 27900 ce
sell 1 otm 28000 ce
Again break evens 100 PTS and squreoff anytime after 50 PTS and hold to winning positions
Ok all these strategies should be understood and worked on and 2 days in a week u will analyze
the right trend

every strategy which were discuss here requires that we need to have a view on the market.
if we are neutral to bullish we have a strategy
if we are neutral to bearish we have a strategy.
Sir , please help us how to develop you view on the BANKNIFTY , once this is ready, then we
can deploy the right strategy.
1. How to develop the view from charts ? or Option chain ? or any other
I work on oi and max pain to square off positions
Another point which option trader misses is if there is a lot of gap in future price to spot price say
like 50 and above then you will find more decay in puts and calls as it adjusts to the extra
premium in futures

STRATEGY 5 Short put butterfly

Banknifty at 27900

Here we are going long with puts

Buy otm lower strike 27600 pe and sell otm HMS put 27700 and sell Lms put 27800
This break evens are at 27800 and 27600

Here we have avoided 27900 as we think longish so sell calls will make money so try to finish
intaday or if market reverses then hold on to put buys
hold any one wing only
But u still suggest close all positions to take min profit
Yes here we work on premium decay
We can do this on Tuesday for weekly expiry or like parent scenario on Tuesday
On decay values this is calculated so concentrate on sell

We have 2 short position legs to help in our upmove. But to protect against our downmove, we
have only one long put position. but that too it is far OTM . almost 300 points away.

Hold on to buy put is only when our view is wrong

[6:16 PM, As profit is limited but loss we have to understand
[6:17 PM, U shd cut off at the third point 27600 and we are breakeven
when you explain different cases , we will understand better. i think
case -1 Banknifty fall by 100 points
case - 2 Banknifty fall by 200 points
case - 3 Banknifty fall by 300 points
current price
27800PE 120
27700PE 92
227600PE 68

So even if Banknifty crashes by 200 points we are in profit.

another 1 points, on any day before expiry, the short positions will not be zero and our buy
positions will be in profit.

Sir this I do on Tuesdays for expiry keeping in mind max pain and oi
Sir can u pl.elaborate on the word "max pain"
Max pain refers to max no of traders who have sold puts and calls at some stirke price
Highest oi strike prices ,right?
No max people selling puts and calls at a particular strike
See writers have an advantage in the market to decide on points of support and resistance
Sir just follow max pain in bnf.
Can you please explain under which market conditions we should prefer SHORT PUT
BUTTERFLY ?
I do short put butterfly almost everyday. It's my favourite.U have to implement it the right way
As markets are bullish right now

Example

27-08-2018
I did 27900 buy sold 2 lots 28100 and bought 1 lot 28200
Ok so I missed 1 strike price as I knew market was up
This increased the range for cross over

[10:14 PM, So then at around 12 waiting for European market saw futures up so squared off
sell calls ie 28100 calls and 28900 buy call held 28200 call still carrying forward
At the time of square off of 1 call buy and 2 call sell was -700
Then the 28200 call rocked so I carried it now in profit of about 2500
Guys, as per the data received we can see BNF expiry @ 28500-28600 levels & Nifty expiry @
11700-11750 levels !!
ok, so move with trend and cut the leg in loss
So I can add up to my call tomorrow with a buy 28200 and sell 28400 call
This increases my position with a hedge at 28400
I could close it when 28400 is achieved
No decay will start the day after as market will move higher tomorrow
Put decays are more today and will continue tomorrow till half session then once highs r
reached we can see erosion in calls
is there any logic in decay
Yes if u notice today the premium in futures of bnf was 10 pts down so erosion less the day
before on Friday premium was almost 40pts so erosion more
Fno both are correlated
Future traders giving a premium means stock or index going up. In a contrary it may go down.
So calls will not get premium when future had higher premium and when it gets lose Luke today
the calls will have values
[10:49 PM, 8/27/2018] +91 98131 91403: tell me effect of difference between future and spot
price on calls and puts decay
[10:50 PM, 1 thing to note is if future running at premiums you will have erosion in calls an puts
both..
[10:51 PM, There is a maths involved in it
[10:51 PM, Iam still learning the exact correlation
[10:52 PM, 8/27/2018] +91 98131 91403: ok
[10:52 PM, U guys can help me
[10:52 PM, 8/27/2018] +91 98131 91403: will search sir 🙏🙏
[10:53 PM, When market falls u see premiums high and when it goes up premiums fall
[10:54 PM, On flat markets they do both like if tomorrow gapup premium will be below spot
[10:54 PM, 8/27/2018] +91 98131 91403: sir we are taking only two positions by selling put/call
1 lot each away 200 stirke prices or by identify support/resistence, so it is right way or wrong
[10:55 PM, This happens as more calls written at 28500 and above
[10:56 PM, 8/27/2018] +91 92234 19160: Which premiums ?
[10:58 PM,
sir we are taking only two positions by selling put/call 1 lot each away 200 stirke prices or by
identify support/resistence, so it is right way or wrong
No in strategies we take positions and wait for directions.i no movement we wait for decay as on
that day surely future premium will be high anything above 30 to 40 gives 10 to 15 pts eros5
Well when traders book in highs like today the premiums decrease and equate towards spot
price. But then tomorrow new buys will come in morning session based on European and
American markets which will react by more buying in index giving us premiums

[6:24 PM, 8/29/2018] +91 98432 54289: Put values or call values will differ with how much
premium it has in the futures . Below spot means puts dry up above spot calls dryup
[6:24 PM, 8/29/2018] +91 98432 54289: As expiry gets spot and future the same
[6:25 PM, 8/29/2018] +91 98432 54289: So in the directions you think do a put or call strategy
STRATEGY 6 Long condor spread with calls

This is done when we expect min movement in index during the whole day frame

Strike Price Lot

Buy 28000 CE 1
sell 28100 CE 1
Sell 28200 CE 1
Buy 28300 CE 1

Breakeven at 28000 and 28300

STRATEGY 7 JADE LiZARD STRATEGY

Initially we short ce and pe otm At atmost same strikes . strikes that are at equal distance from
CMP.

And then further otm ce should be bought

bnf around 26900 to 27000
Say as multiple of 50 we take

BULLISH

Buy 27200 ce
Sell 27100 ce

Bnf 26950

Sell 26800 pe

Further otm is basically we try to concentrate on higher premiums collected

This is the amount you think bnf will go long
Here in the case of our view right we are always in profit..sweet spots if 27200 ce is bought
would be between 26900 to 27100

We short 26800 pe and short 27100 ce

Or our view goes wrong at breakeven i.e 26800 either we squareoff by 26850
Or in the strategy we can further improve by squaring off short call and long call .. which as a
separate hedge would be in profit..
And then build the shot call position 100 PTS below in this case 27000 ce and buy otm call
again
But here plss be careful as we are hedging repeated so again if market does not recover then
book loss which should be minimal my presumption is 20 pts

Yes sir always better to have bigger spread in bnf

BEARISH

Sell 27100 ce

Bnf 26950

Sell 26800 pe
Buy 26700 pe

Same if it is a bearish view we need to buy 26700 pe ryt sir

Right do the same with puts in mind
I.e market at 26950 and we think
Then short 26800 pe and
short 27000 ce
buy 26700 pe and

Here too if market goes against your thoughts u can build on after 100 pts

Initially sir we have to view the market in the opening 30 mins and check the strike prices and
then calculate our entry prices .. before placing order.. if calculated with care your orders should
execute unless there is sudden spike either way in the market at the time you place the order...
So I would suggest who do these initially to place orders after 10
U certainly can do in nifty when the IV is high or increasing higher than previous days
I most of the times caught in the wrong direction of the trend.