Hello, I trade Nifty options, with analysis based on the futures chart, but execution is done through options. I primarily focus on intraday trading, and only short options.
My question is as follows: If my strategy signals a buy on the futures chart, I would typically short an ATM put option. My exit strategy involves either a stop loss or exiting by 3:15 PM.
However, I want to understand if it’s a good idea to hold the SAME strike option until 3:15 PM, in case the option moves in my favor. The reason I’m asking is that, in a short options position, the price doesn’t seem to fall significantly after a certain point.
Thank you for your insights!
Best answer - test it yourself. Nothing like getting answer yourself vs what other people say.
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100% agree, but nevertheless, looking for ideas I wouldn’t have even thought of, which might just work. Will definitely test ideas before implementing.
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It depents on which expiry you are trading . You can also try draft portfolio in sensibull to test this
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Roll your options. Meaning close the existing trade (beyond a certain profit), and initiate the new one at a higher (in case of puts) strike.
The higher strike can be:
- At the same distance away from the ATM strike, as your original trade. OR
- Just one strike higher than the original trade.
Play around and see what suits you best.