Nifty & Bank Nifty strategy contest thread for the week ending November 14, 2019

Hi there!

Post your Nifty/Bank Nifty trading strategy for this week below and stand a chance to win a ₹5000 Amazon voucher every week. The post will be judged on the quality of the content, ease of understanding, and engagement.

We will announce the winner on this thread on Friday evening, and create a separate topic with your post to open it up for discussion the following week.

3 Likes

A simple strategy for Nifty50 for week ending Nov 14, 2019.

I sold 12150 CE weekly options at premium Rs 7 when nifty50 was trading at around 11900 today. Reasons/Trading Signals -

  1. 12150 is more than 1 SD (Standard Deviation) away for the week ending Nov 14. It means, there are more than 67% chances that the strike will expire OTM (Out of the money) i.e. more than 67% chance of winning.

  2. The Delta of 12150 is around 10 i.e. there are 10% chances that the strike (12150) will expire ITM (In the money). It means, there are 90% chances that the strike will expire OTM

  3. The market has almost touched its ATH (all time high) and there are chances that the market will consolidate before moving up further high (chances for which are dim especially in the expiry week of Nov 14)

  4. In the option chain for Nov 14, highest number of option contracts are available for 12000 strike and second highest at 12100 strike. It means that in all likelihood, Nifty50 will not cross 12100 by Nov 14. Selling 12150, hence, is at a safer side.

  5. By selling 12150 at Rs 7, I received the total premium of Rs 525 which is around 0.5% weekly return (after deducting brokerage/taxes/etc) of the total capital (i.e. the margin money) required for selling this contract. It also means around 2% monthly return If one can repeat this again and again over time.

  6. its a relatively safe trade and until a green swan event such as cut in the corporate taxes takes place, the return is quite attractive)

  7. It suits the risk profile of retail traders like me who have limited capital to buy/sell options and capital preservation is the primary concern.

  8. Nifty50 is among the least volatile derivative products and hence the chances of Stop Loss (I have kept 4 times the premium earned as stop loss i.e. Rs 28) getting hit is relatively lesser especially at a time when the strike price of the 12150 call option is more than 250 points away for just 4 trading sessions (Tuesday being holiday). The theta decay will be much faster.

  9. I will exit this trade when the premium becomes worthless or when the premium shoots up to more than 4 times the premium received (i.e. Rs 28). I have no plans to adjust this trade.

5 Likes

Trading Set Up for Banknifty on 13/11/2019

1. SET UP to Trade Nifty Bank.

  • Trend:
  • Market is not trending anywhere.But there is Mild bies on downside.
  • Market set up:
  • Today Bank nifty Force set up is Supportive for Selling. So Today is Good set up to Sell. Today, you should look to sell.
  • Bottom Line :
  • The Trend is Not define, But Last day Positive move can support today's down-move & give follow up on downside >> Good set up to Sell.

    2. Sentiments

    • Global markets:
    • Dow Jones future is Extremely Negative & Hang Seng is Extremely Negative.
    • What is on News/TV
    • Today, we wil get dips, which can be bought or not -it have to seen.
    • Positive News-flow::
    • More Loose policy from RBI due to Bad SEP IIP number & lower future growth forcast.
    • Negative News-flow::
    • SEP IIP number & Forward looking number has been cut as well. PSU bank will correct today due to postpondment of meeting. Fiscal deficit is Major concern for GOVT for this year.
    • Bottom Line:
    • Sentiments is very Much Negative. Sentiments are supportive of on going Down bias Trend.

    3. Game Theory ( Tug of war between Buyer & Seller)

    • From where New Buying comes?
    • A. Since Sentiments are Very Much Negative, the Outside Trader will postpone their Buying.
    • From where new selling come?
    • A. Since Sentiments are very much Negative, Aggressive short Selling expected from outside Trade. B. Trader's with Long Position- "Great" chance for Long unwind today.
    • Will there be Resistance from Seller sell on rise?
    • On rise-Since trend is not perfect!, There will be a higher number of Sellers at higher end which propels the market to go down on the intraday rise. Moreover, on Rise, a Buyer who wanted to buy has already bought. So Selling on the rise is a Dominant Strategy as more Seller & lack of Buyer on rise of this Downtrend Trending market

    4. What I am going to do Today (In Bank Nifty)

    • Set Up:
    • Today Bank nifty Force set up is Supportive for Selling. So Today is Good set up to Sell. Today, you should look to sell.
    • Sentiments:
    • Sentiments is very Much Negative.
    • Trading Edge:
    • My Today Trading edge points clubbing Setup & Sentiments is -97 Point. Since My Trading Edge is less than -70, I will be only looking for shorting opportunity for Today.
    • Entry on Edge:
    • Sell- When BN is Between 31063-31156
    • Exit on Fair price:
    • Fair Price for Today's Trade is at least 30834.55
    • Stoploss:
    • One you get a entry, You should follow 70/100 point stoploss, without fail.
      It's Significant intellectual property & New way to Analyse the Market which use Unconventional Instruments Like Behaviour Finance & Game Theory for getting clear & Unbies idea for Traders.

    Abhikumar Patel

    1 Like

    You don’t explain how you derive this levels.
    For me, you just post global news and sentiment and give your calls. It doesn’t help me to derive the levels.

    If criteria of this challenge allows giving calls then you are perfect candidate as winner.

    1 Like

    Excellent view… Bank-Nifty was on negative bias from 9.30 onward and shut shop more than 500 points down.

    I can’t provide calls or trend every week for BANKNIFTY.
    My strategies are useful for lifetime. Profit & loss are parts of trading.
    Select CE & PE OTM (depends on remaining days for expiry).
    Note the open price. Buy strictly @ open price + 20%. If activates, s/loss will be open price & target 40% ++ !
    (Backtest it before taking any trade.)
    I AM NOT PARTICIPATING IN THE CONTEST. I JUST SHARED MY STRATEGY WHICH ‘MAY BE’ HELPFUL FOR NEWBIES & SMALL TRADERS !
    Dear Zerodha, please do not count me for the contest.

    3 Likes

    Trading Set Up for Banknifty on 14/11/2019

    1. SET UP to Trade Nifty Bank.

  • Trend:
  • Bank Nifty's bullish trend seems exhausting now. Here seller/supply try to make a comeback & demand also gets reduce on rising.
  • Market set up:
  • Today Bank nifty Force set up is Supportive for Selling. So Today is Good set up to Sell. Today, you should look to sell.
  • Bottom Line :
  • The Trend is Up, But it is end of uptrend. The Trend can change itself to downside Today.>>Good set up to Sell.

    2. Sentiments

    • Global markets:
    • Dow Jones future is Flat to Negative & Hang Seng is Flat to Negative.
    • What is on News/TV
    • Bank nifty was falling , but nifty was stable. This is Mild downmove corrective phase on ongoing uptrend. FII data is nagative, Major dips will be bought into.
    • Positive News-flow::
    • CORE inflation is Down to 3.5%. which is lowest. December rate cut is expected from analyst, but than after it will be very hard to cut.
    • Negative News-flow::
    • CPI is at 4.62% due to food inflation. It is higher than expected than MPC mandated expectation. However, this could be one of due to Onion crop. GOVT asl telcos to pay 1.3lks & Bank have some exposure to this telcos.
    • Bottom Line:
    • Sentiments is Mild Negative. Sentiments is also supportive to downmove

    3. Game Theory ( Tug of war between Buyer & Seller)

    • From where New Buying comes?
    • A. Since Sentiments are mild Negative, the Outside Trader will Buy on DIPS only.
    • From where new selling come?
    • A. Since Sentiments are mild Negative, Mild new short selling expected from outside Traders. B. Trader's with Long Position- "No chance" for Long unwind today.
    • Will there be support from buyers buys on dips?:
    • There may not be any support from Buyer as most of them have bougalreadyedy are IN the market.

    4. What I am going to do Today (In Bank Nifty)

    • Set Up:
    • Today Bank nifty Force set up is Supportive for Selling. So Today is Good set up to Sell. Today, you should look to sell.
    • Sentiments:
    • Sentiments is Mild Negative.
    • Trading Edge:
    • My Today Trading edge points clubbing Setup & Sentiments is -76 Point. Since My Trading Edge is less than -70, I will be only looking for shorting opportunity for Today.
    • Entry on Edge:
    • Sell- When BN is Between 30551-30644
    • Exit on Fair price:
    • Fair Price for Today's Trade is at least 30321.55
    • Stoploss:
    • One you get a entry, You should follow 70/100 point stoploss, without fail.
      It's Significant intellectual property & New way to Analyse the Market which use Unconventional Instruments Like Behaviour Finance & Game Theory for getting clear & Unbies idea for Traders.

    Abhikumar Patel

    Just squared off my position i.e. 12150 CE at Rs 0.05.

    It worked.

    Results of my simple idea …
    30200PE Opened at 25.3. Added 20% = 31…High 80.
    30300PE Opened at 46.95. Added 20% = 57…High 118.75.
    30400PE Opened at 79.05. Added 20% = 95…High 172.

    1 Like

    My simple strategy of “open + 20%” has given handsome profit.

    Previously provided 200SMA/EMA crossover has also given profit of 400++ points.

    @ZERODHA : PLEASE DON’T CONSIDER ME FOR YOUR CONTEST.
    I am earning more than sufficient amount everyday.
    Let someone take the advantage of 5K Amazon Voucher.

    1 Like

    Can you tell me what is more then sufficient amount. Just for curiosity if you don’t mind.

    No comments. No arguments. Thanks.

    @Maharaj very good. Is this rule applicable only on expiry day.

    No. You can trade daily.
    OTM, far OTM depends on days remaining for expiry.

    @Maharaj , thank you. I think far OTM till Tuesday & just OTM for Wednesday /Thursday would work. Is it right.

    Trading Set Up for Banknifty on 15/11/2019

    1. SET UP to Trade Nifty Bank.

  • Trend:
  • Market is not trending anywhere, But there is mild Bies on Upside.
  • Market set up:
  • Today Bank Nifty Force set up is Not too much Supportive for Buying. So, Today is BUY ON DIPS only day. Dont chnase momentum.
  • Bottom Line :
  • The Trend is Not define, But last day Flat to mild positive move can support today Up-move and give follow up on upside.

    2. Sentiments

    • Global markets:
    • Dow Jones future is Flat to Positive & Hang Seng is Positive.
    • What is on News/TV
    • Today can be Green day. This is clearly Buy on dips. Stong bank is leading now & weak bank are falling now. Thus Bank nifty is bit stonger.
    • Positive News-flow::
    • DII are now Buying. Essar judgments is very Important for SBI which schedualed around 10.30.
    • Negative News-flow::
    • Near term, FII selling can be irritant.
    • Bottom Line:
    • Sentiments is very Much Positive. Sentiments are not supportive of on going Trend.

    3. Game Theory ( Tug of war between Buyer & Seller)

    • From where New Buying comes?
    • A. Since Sentiments are Vey Much Positive, the Outside Trader will Buy with Good amount of aggression. B. Trader's with a short Position-"in dips goods" chance for short covering today.
    • From where new selling come?
    • A. Since Sentiments are Vey much Positive, Outside Traders will not try to short sell at all today.
    • Will there be support from buyers buys on dips?:
    • On Fall- Since the Trend is 'Not Define', There will be a moderate number of Buyers at the lower end which propels the Market to go up from Dips. Moreover at Dips Sellers who wanted to sell has sold off. So buying on dips is the Dominant Strategy as More Buyer and lack of Seller at the bottom of This Non-Trending Trend

    4. What I am going to do Today (In Bank Nifty)

    • Set Up:
    • Today Bank Nifty Force set up is Not Supportive for Buying. So, Today is Bad set up to buy. You should Avoid buying.
    • Sentiments:
    • Sentiments is very Much Positive.
    • Trading Edge:
    • My Today Trading edge points clubbing Setup & Sentiments is 71 Point. Since My Trading Edge is more than 70, I will look for Buying Opportunity only.
    • Entry on Edge:
    • Buy- When BN is Between 30667-30575
    • Exit on Fair price:
    • Fair Price for Today's Trade is at least 30958.95
    • Stoploss:
    • One you get a entry, You should follow 70/100 point stoploss, without fail.
      It's Significant intellectual property & New way to Analyse the Market which use Unconventional Instruments Like Behaviour Finance & Game Theory for getting clear & Unbies idea for Traders.

    Abhikumar Patel

    Yes Dear.

    I hope, you enjoyed today too !

    Today I observed that &it worked fine. Will try with real trade next week.

    Today I am free & would like to answer you.
    What is sufficient is depends on person to person. Someone will be happy with profit of 1K & someone with 1 lac.
    Earning beyond these levels is “more than sufficient” !