Will my options strategy work.?

General
1

i need traders openion on my trading strategy

here it goes…

i will buy nifty put option on every day at 3:20pm…

on the next day i will square off my position when market falls below the previous day close

here is an example…

nifty at 3:20pm is at 8500

i will buy 8400 put option at that time

on next day i will sell if the market falls below that 8500 level…

** now i want to know your opinions on this… this is the 1st strategy(or at least i think so) i’m going to implement from Monday onwards.i want to back test this strategy on nifty… please suggest whether it will work or not…?? thank you…

2

This will partially work if nifty makes a low lower than previous days close. You have to note that put option will loose some time value next day and if volatility dies then also premium will decrease even if nifty goes below.

On the otherside if nifty jumps up next day your loss will be limited.

So this is a relatively safer strategy if you have a bearish short-term overview of the market.

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