Lately, I’ve been wondering… do option selling strategies still work in 2026?

General
1

With players like Jane Street and other institutions dominating order flow and constantly moving markets, has retail option selling lost its edge?

Premiums decay, theta works, but one sharp move wipes out weeks of gains. Feels like the market structure has completely changed now.

For those who still actively do option selling:

  • What strategies are still consistently working for you?
  • How are you managing risk in this environment?
  • Which setups offer the best risk-reward with controlled downside?
  • Are defined-risk strategies the only way forward now?

Would genuinely love to hear real experiences from serious traders.

2

Sell far otm far month, outside the usual range for the past month. When in doubt, play safe. Better make less money than giving some to the market.

3

does that work only for nifty? or anyother underlying to?

And thanks for the detailed response :grin:

4

April May have been record breaking profit months for my CTM STBT OS based strategies. Unfortunately I gave a lot of it back with my directional strategies (OB)

1 Like
5

happens. Don’t let profits to go to your head and loss to your heart. Just hang in dere. Best wishes to you.

6

had to use chatgpt to understand it better :sweat_smile:

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7

Good question and one I have thought about deeply after trading NIFTY options for over a year.

Has retail option selling lost edge?
The edge from naked selling has shrunk significantly. Jane Street and similar players have made the tails more expensive and the moves sharper. A 3-sigma intraday move on NIFTY is no longer rare.

What still works:

Defined-risk structures — Iron Condor and Iron Butterfly — are the answer, not because they are safe, but because they cap your maximum loss. Naked selling gives you unlimited downside for limited premium. That risk-reward no longer makes sense.

What I found consistently works:

  • Enter Iron Condors only when VIX is in a stable range — not spiking, not collapsing
  • Adjust the short strikes based on VIX-derived expected move, not just fixed delta
  • Have a pre-defined breach trigger — when price threatens a short strike, roll or exit, do not wait and hope
  • One trade per day, first hour or not at all

On risk management:
Automation helps more than most people admit. The biggest losses in option selling come from emotional hesitation at exit. If your exit rules are automated, you remove that hesitation entirely.

Defined-risk only?
For retail — yes, in the current environment. The premium reduction from buying the wings is worth every rupee as insurance.

8

The tail risk is significantly more with individual stocks.

9

Last year wasn’t as good as the previous years.
This year April and May has been great.

10

thanks that was such a great explanation, do you use any particular automation app? currently iam using zerodha with streak for triggers, wbu? Thanks again

11

no i mean like sensex or bank, will that work good on this

12

even with such high ups and down? wow, please explain me a little on how to do it. thanks in advance.

13

Glad it helped!

I actually built my own automation — a Python bot that runs
on Zerodha Kite Connect API directly. It selects the strategy
automatically based on live VIX, RSI, and VWAP — Iron Condor,
Iron Butterfly, Long CE or PE depending on market condition.
Built-in stop loss, daily loss limit, and Telegram alerts so
I don’t have to watch the screen.

Streak is great for simple triggers but I needed full
strategy logic with risk management baked in, which is why
I went custom.

I’ve actually packaged it for others to use if you’re
interested: NiftyAlgo — Automated NIFTY Options Trading Bot