if i am doing intraday trading in index(nifty and bank nifty) option . I want to use bull call spred .
should i do spred in ITM or ATM or OTM
1 Like
For Intraday ATM is BEST
- You get maximum profits in both intraday as well as on expiry.
I advice you to push yourself to little bit of learning and make use of free youtube videos/books/courses etc as this platform is not one stop destination for getting trading education.
7 Likes
Thank you Goutam for the explanation, I was reading the vertical spread as i have less capital to trade, Found out Credit spreads are more useful than debit, and one more thing i found we can increase our profit and widen the break-even if we make more gap in between strike price
Example If in a hypothetical situation if I am bullish on nifty and do below bull put spread i have bigger breakeven
1 Like
Indeed Doing Credit spread is better than debit spread.
This is little bit contradictory. The more you widen the gap between strike the higher will be your max loss. So your risk reward ratio gets screwed a little bit but it yields more profit in Intraday.
2 Likes
If the move is quick, same day, and if it is early in the expiry week - Naked Long OTM generally offers the best ROI.
3 Likes
I would like to disagree here. If you are getting credit for your spread your risk is higher. In market there is never a free lunch. So if you have to reduce your risk you have to pay the market. So higher the debit, lower is your risk. I am only talking from risk point of view. When it comes to return, I agree credit spread gives better return. That way even selling ITM option also gives great return, but we all know the risk associated with it.
Just my view. I always believe that risk and return move in the same direction.
2 Likes
I have not tried both credit or debit spread in market , using sensibull stertergy builder i can see in credit spred if i widen the strike price my break even point is far from the spot so of my technical analysis doesn’t work i can exit the trade with small loss
1 Like
It is difficult to determine the stop loss in naked buy
1 Like
If you see the sensibull stertergy builder i heve used, it seems the break even is far from the spot price so if technical doesn’t work i can exit with minimum loss or no loss
1 Like
you are right Nifty 350 gap between buy and sell is working quite well, what is the ideal gap in bank nifty
1 Like
The above I used 350 points randomly.
When I’m doing trading I give more attention to support & resistence and OI buildup.
A bull call spread is a great way of making a profit. You have to follow the option chain data in order to trade in bull call spread.