How to implement my futures trading strategy with ITM options for tax efficiency?

General
1

I currently trade Bank Nifty futures with a specific system that:

  • Buys when a certain price level is crossed
  • Exits at predefined targets and stop losses

For tax efficiency, I’d like to implement the same strategy using ITM options instead of futures.

My question is: How can I set up a semi-automated system that will:

  1. Monitor Bank Nifty futures price levels
  2. When my entry condition is triggered on futures, automatically buy an appropriate ITM option instead
  3. Apply my same predefined targets and stop losses to the option position based on futures prices.

Has anyone implemented something similar? What tools or platforms would work best for this kind of futures-to-options conversion strategy

2

you can try ATO (Alert Triggers Order) feature available with kite. However, ITM options may have wide bid/ask spread and may cause slippage.

1 Like
3

Deep BN ITM Options dont have good liquidity, has even less if it gets even more ITM (with fav movement), and especially less when more than 2 weeks are left for expiry. If you still want to try, you will have to keep yourself around ITM1(meaning it will not move like Fut) and then delta-drft constantly to keep it not-so obscenely ITM (and still suffer slippages)

1 Like
4

Is there a way I can try ATO on MCX, when will zerodha have ATO on MCX @nithin

5

We will offer it in coming days.

6

Try synthetic futures, but even this comes with its flaws. PL difference between futures and actual synthetic futures trade could differ.