What is your opinion about this trade setup?

Hello all !

I found this strategy quite interesting for this week. Buying ATM call current week and selling ITM. payoff chart looks good too. Has anyone traded this sort of set up ? Any hidden risk factor ?

Appreciate your help!


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Is this the payoff graph for 2nd December? I think the risk factor is the market going below 35k after 2nd December because then the position will be unhedged and the total premium cushion is approx 600rs.

don’t do that …

Thanks Suyash for the reply. Yeah, it’s the pay off graph for Dec 2nd . I know that by expiry (2nd dec) 35600 CE sell position will become unhedged . Couple of questions !!
1- what if am closing all my position on 2nd Dec before expiry ? A movement on either sides will generate profit and I can exit in profit right ?

  1. Before expiry , can’t I replace the one about to expire with a new one ? So that the position will become hedged . Choosing which strike and based on what parameters , I still don’t have much clarity though. If you can shed some light on that, That’ll be great! Thanks again !!

First way seems more logical to me . Correct me if I’m wrong :slight_smile:

Any rationale behind your thought ? Thanks

its alll iv game #bullsmoves