King of Weekly Options Trading Strategy
King of Weekly Options Trading Strategy.
Here share market advanced option trading course in Hindi:
[Visit @stockan official website]( https://stockan.in/).
[Click Here For More @stockan Videos]( / stockan .
Are you looking for a powerful options trading strategy that can deliver consistent profits with controlled risk? In this comprehensive guide, we break down an advanced 8-Strike Price Strategy with a capital requirement of just 1 lakh INR. This strategy focuses on both range-bound market conditions and downside protection, ensuring you can navigate volatile markets confidently.
In this detailed breakdown, you will learn:
Capital allocation and position sizing
Execution of the 8-strike price strategy
Handling range-bound markets
Utilizing ATM (At-the-Money) options for better premiums
Live examples with real data
Backtesting results for performance evaluation
Understanding the 8-Strike Price Strategy
The 8-Strike Price Strategy involves a combination of buying and selling call and put options to create a balanced, risk-managed position. This strategy is structured for a capital requirement of 1 lakh INRApprox, making it accessible for retail traders while providing a strong risk-reward ratio.
1. Range-Bound Strategy Execution
When the market is expected to stay within a defined range, this strategy aims to capture time decay while protecting against large movements. Here is how to structure the position:
ATM (At-the-Money) Call and Put Sell: This generates the primary premium.
Out-of-the-Money (OTM) Buy for Protection:
Call Option: Buy 200 OTM
Put Option: Buy 100 OTM
Example:
ATM Level: 24,500
Range-Bound Setup:
Sell Call 24,500 (ATM)
Sell Put 24,500 (ATM)
Buy Call 24,600 (OTM +100)
Buy Put 24,300 (OTM +200)
This combination limits your risk on both sides while profiting from time decay.
2. Downside Protection Setup
In case of a market downturn, it is essential to structure a protective downside position. Here is the configuration:
OTM Buy and Sell Ladder
Buy: OTM 300
Sell: OTM 500
Sell: OTM 700
Buy: OTM 800
Example:
ATM Level: 24,500
Downside Protection Setup:
Buy 24,200 (OTM 300)
Sell 24,000 (OTM 500)
Sell 23,800 (OTM 700)
Buy 23,700 (OTM 800)
This structure provides a protective spread against sudden downward moves.
Example: Implementing the Strategy
Let's analyze a live example to see how the strategy performs in real-time.
ATM: 24,500
Range-Bound Setup:
Sell Call 24,500 (ATM)
Sell Put 24,500 (ATM)
Buy Call 24,600 (OTM +100)
Buy Put 24,300 (OTM +200)
Downside Setup:
Buy 24,200 (OTM 300)
Sell 24,000 (OTM 500)
Sell 23,800 (OTM 700)
Buy 23,700 (OTM 800)
This dual-layered approach ensures a balanced risk profile with limited losses and potential for substantial profits.
Backtesting the Strategy
To ensure the reliability of any options trading strategy, it is essential to backtest it across different market conditions. Below is the performance analysis of the 8-Strike Price Strategy:
Backtest: ATM 24,750
ATM Call and Put Sell:
Sell Call 24,750
Sell Put 24,750
OTM Call Protection:
Buy 24,850 (OTM +100)
Buy 24,550 (OTM -200)
Result: Loss: 2822 INR
Put Side Protection:
Buy 24,450 (OTM 300)
Sell 24,250 (OTM 500)
Sell 24,050 (OTM 700)
Buy 23,950 (OTM 800)
Result: Profit: 5800 INR
Key Insights from the Backtest:
Risk Management: This strategy effectively caps maximum losses through well-defined OTM positions.
Profit Potential: The downside protection structure generated a net profit despite the ATM leg loss.
Balanced Approach: This hybrid strategy allows for consistent returns while controlling tail-end risks.
Advantages of the 8-Strike Price Strategy
Limited Risk, High Reward: Defined risk on both sides allows traders to know their maximum exposure.
Time Decay Advantage: The ATM sell positions benefit from rapid theta decay.
Flexibility: Suitable for both range-bound and downward-trending markets.
Low Capital Requirement: Executable with a starting capital of just 1 lakh INR Approx.
Strategy Optimization Tips
Monitor Volatility: Adjust your strike distances based on current Implied Volatility (IV) levels.
Hedge Appropriately: Ensure the OTM buy positions are appropriately spaced to protect against extreme moves.
Exit Management: Close profitable legs early if the market remains within the expected range.
Reassess Weekly: Evaluate market sentiment to optimize strike selection for better premiums.
*Disclaimer : This video is only for educational purposes, based on research and my own experience, I'm Certified by NSE and SEBI (NISM) About Option Trading Strategies. Share market is very risky if you do anything after watching this video will have their own risk and responsibility; The Stockan Youtube Channel does not take responsibility for any damages arising directly or indirectly from any actions taken based on this video.
#OptionStrategies #OptionTrading