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nifty calendar spread strategy

Suppose the Nifty is trading at 8960 on 10th March, 2017. This is your trade (Real prices as on 29-Jan-5015. If the profits from the sold options exceeds the losses from the bought options – the trader keeps the difference. Calendar Spreads are done when the trader thinks Volatility will increase in the near future. We have assumed that Nifty is at 9090 on expiry day just below the sold option strike. ), Sell 100 NIFTY FEB 2015 9100 CE @ 112 Please consult your broker for more details. In fact you make more when you are wrong in the Future trade. b) Aligned towards positional strategy. Testimonials Year 2015 Page 2 The liquidity in options are increasing every month. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given in this website. It is more common among professionals and institutional investors because full margin is blocked. A Long Call Calendar Spread is the combination of short call and long call option with different expiry. Volatility: This is a very important point. Free stock-option profit calculation tool. On options unfortunately NSE does not recognize Calendar Spread as a limited loss strategy therefore full margin will be blocked for selling options. Reverse Calendar Spread works exactly opposite to Calendar Spreads. Then Buy Feb Futures and Sell March Futures. It is mainly to take advantage of the sharp time decline in options that are close to expiration. A Calendar Spread on Nifty Future is traded like this: If you think the difference will be less than 55 on FEB expiry. Look at the image below. Loss from March Future: 8970 -9000 = -30. For example Nifty is at 8890; NIFTY FEB 2015 Future is at 8945 and NIFTY MAR 2015 Future is at 9000 (real prices as on 29-Jan-2015). . To know more Call/SMS/WhatsApp me on 9051143004 or email me now. Just a note on margin requirements on Calendar Spreads. I am sure many of you have traded Neutral Calendar Spreads. Buying and selling Puts will constitute bearish diagonal spread. This strategy is called a Butterfly Spread due to how the Options Graph always looks like. FREE Support For Months. 4. 11 Reasons Why You Should Do The Course: 7. On Nifty Futures the Calendar Spreads are actually traded. Or if you think it will increase you can buy the spread and sell later. This course helps you learn to trade conservative option strategies for monthly income. CALENDAR OR ANY. You can read in details here. About the author: If Volatility drops – Reverse Calendar Spreads usually profit. We will soon know its not that simple. What Traders Say About This Course Testimonials Year 2018 I will discuss how you can benefit from this as well. Since 2011 I am trading Nifty options profitably. Hope it helps. No need to wait for expiry. See visualisations of a strategy's return on investment by possible future stock prices. Running a calendar spread with calls means you’re selling and buying a call with the same strike price, but the call you buy will have a later expiration date than the call you sell. Yes they pay good cash to trade this – but they also get amazing protection. One Of My Client Is Making Rs.25k Per Week This is not as easy as it sounds. 8. Butterfly Spread. Can be done on Futures. Its more of a professionals’ trade than a retailers’. 30 days are remaining for expiry. Non directional trades are profitable 80% of the times and make 3-5% per trade (Results may vary). Before reading please understand that for all 5 strategies, strike selection will be taught. Depending on the loss on this option the trader makes a profit or a loss. Click here to read the disclaimer in full. Therefore there is no guarantee that everyone will achieve the same or similar results. Once you finish the course you can start trading immediately. Emotional Testimonial by a Young Woman Trader and Her Mother Bank Nifty Course Testimonials This is known as Reverse Calendar Spread. Suppose Nifty is trading at 8800. Testimonials Year 2018 Calculate the value of a call or put option or multi-option strategies. 25*10 = (250/1375) * 100 = 18.18% return in 30 days or less just on 10 points. A calendar spread is a strategy involving buying longer term options and selling equal number of shorter term options of the same underlying stock or index with the same strike price. They do not wait till expiry like an amateur trader looking to profit from the best possible situation on expiry day, that rarely happens. You’re taking advantage of accelerating time decay on the front-month (shorter-term) call as expiration approaches. What People Say Just After Reading My Course Do Course From Your Home This strategy would be called bullish diagonal spread. Since Volatility affects ATM options more than any other option – they make quick profit in a few days time and get out of the trade. Analysis of Long Call Calendar Spread strategy. ... Let's take an example with Nifty. Another factor of calendar spread strategy is you cannot estimate the maximum profit theoretically. , Previous post: Technical Analysis Does It Make Money. What Others Charge for Courses Now 9100 is ATM option – when the trade was done it was out of money. It never happens. With the diagonal spread, the investor has a near term outlook that is slightly more bullish or bearish. The strategy will be successful 1. c) Is less than 230 – most possible scenario. That way even if you make 10 points on this, its a great profit. In this trade real Futures are NOT bought or sold. You can sell the Calendar Spread and buy it back for a profit later. No. You get two conservative non-directional strategies on options, one conservative stock option strategy and two conservative directional strategies on Future & Option combination. P.S: So many years of trading has thought me one thing – it is always better to make small profits month after month, rather than lose money month after month trying to make too much money. Is The Stock Market Controlled By Stock Operators And Brokers? If not please read the following paragraph to understand this better: Suppose a trader sells current month’s At The Money (ATM) options expiring in 20 days and buys next months At The Money options expiring in 50 days. Buying one put option and selling a second put option with a more distant expiration is an example of a short put calendar spread. A Calendar Spread on Nifty Future is traded like this: If you think the difference will be less than 55 on FEB expiry. In India this may not be possible now but who knows what may happen in the next few years. Diagonal spread is a kind of options spread where far month option is bought and near month option is sold. Since there are just two trades you pay less brokerage. Thanks Abhishek. Like Our Facebook Page And Get Instant Post Updates For Life. Strategy: As expected the index to move in a narrow range with a negative bias due to profit-booking, we advice traders to consider a Calendar bear-put spread on Nifty 50. In the course you will learn how to select the strike prices. I hope why this trade is made is clear. Its a bet between two persons. 9. So right now you have no other option but to buy next months’ options. Or 8970-8900 = 70 – 55 = 15. Nifty Calendar Spread startegy | Easy Earn | Hindi - YouTube Crypto Market Cap, BTC/USD, ETH/USD, USDT/USD, XRP/USD, Bitcoin, USD/INR, EUR/USD, GBP/USD, USD/JPY, USD/CNY, DXY, Reliance, INDIABULLS HOUSING, YES BANK, STATE BK OF INDIA, HDFC BANK, TATA STEEL LTD, Nifty, BSE SENSEX, S&P 500, Nasdaq Composite, FTSE 100, DAX Index, Gold, Silver, Crude Oil, Brent Oil, Natural Gas, Bitcoin, US 10Y, Euro Bund, Germany 10Y, Japan 10Y Yield, UK 10Y, India 10Y. Call me if you need any help trading options on 9051143004. 10. 2. from where to get the figures for interest rates ? Description. Testimonials Year 2019 Thus by the time they reach the month in which the options were bought – they may already be in good profit. The success rate is more than 80%. However my first 3 years were losses. You will make profits consistently. This is best possible situation for the trader. If you still want to try please try on one lot only. Links to my course testimonials pages: If done on Futures your broker should block only the maximum loss. Analysts are suggesting a calendar spread strategy, which involves simultaneous buying or selling call or put options for the same stock or index at the same strike but of different expiry dates. Diagonal spread options strategy. But in reality it is not the case. But please do not attempt just based on what is written here – if the difference is less than 55 on expiry, you will lose money. If yes tell me do you wait till expiry or book your profits or losses within a specified time/points? The Bear Call Spread .. 3. If the stock holds steady, the strategy suffers from time decay. On expiry day of sold options (26-Feb-2015) Nifty is at 9090. For a true Calendar Spread both options sold and buy should be of the same strike price. Simple right? I strictly adhere to laws of my country. Buy 100 NIFTY MAR 2015 9100 CE @ 230, Total debit: 230-112 = 118*100 = Rs. A long calendar spread is a good strategy to use when prices are expected to expire at the strike price at the expiry of the front-month option. I have been trading since 2007, but lost a lot of money till 2010. Please like & share my blog with your friends: One Of My Client Is Making Rs.25k Per Week, Difference Between Other Courses And Mine, Additional Surveillance Margin ASM By SEBI Explained, Nifty Options Trading Tips Providers Will Not Make You Money. Volatility remained the same or decreased. I would be explaining the example using Diagonal Spread with Long Calls and for this, I will use the example of NIFTY (Ticker – NIFTY) Following is the Option Chain for NIFTY We would now take 2 Call Prices from April 2018 and May 2018 For April 2018: For May 2018: You learn when to trade, which strikes to sell which to buy, how much profit target you should be looking for, the best place to take stop loss and what to do after taking stop loss – means how to get that money back. We really do not know where Nifty and Volatility will be on expiry day. Testimonials Year 2017 Technical knowledge is NOT required. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. Copyright Infringement: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement. I am Dilip Shaw. 1375 + brokerage. I started trading stock markets since 2007. Nifty futures - Calendar spread strategy (CSS): (FUTURES CHART NOT POSTED AS TRADINGVIEW DOES NOT HAVE NIFTY FUTURES CHART. What enticed me towards this was : a) Low margin requirement. 100% Hedged Selling Put Options on Nifty Stocks. Stress-Free Trading However STT is calculated just like its done on a Future trade so that still remains an issue. Calendar Spread Margin: Contracts where futures position at one maturity is hedged by an offsetting futures position at a different maturity would be treated as a calendar spread. Testimonials Year 2015 Testimonials Year 2015 He profits from both months’ options. Now lets discuss the best possible situation. You can just sell the Calendar Spread at 55 points and buy it back whenever it comes in profit or on expiry day. Selling put options is a really simple way for Indian traders to get started with options.. To help you succeed I offer few months support for FREE. Of course you can do vice-versa if you think the difference will decrease. Hence, a hedge in Nifty index via a small interval Bear Put spread is advised to safeguard from any possible pull back. Example on 4 lots or 100 shares): Spot Nifty: 8890 ... Long added in Nifty and short added in Banknifty. Margin blocked for one lot will be 55*25 = Rs. Remember this option has already been paid off and the trader is at zero risk to keep this till expiry. For ex: Buy 8600 Nifty CE December contract and Sell 8800 Nifty CE November contract. One Of My Client Is Making Rs.25k Per Week Testimonials Year 2019 11. (We will soon know the margin requirements on Calendar Spreads.). Market eyes on 13K and will most likely to consolidate at 13K. Difference = 45-30 = 15 Points profit. Mumbai: The uncertainty over the market outlook after a 70% rally in the benchmark indices from their March lows has analysts recommending a Nifty options strategy that bets on moves on either sides. NSE recognizes Calendar Spreads on Futures. The diagonal spread options strategy is equivalent to calendar spread where short term options are sold, and the long term options are bought. Yes liquidity is an issue in India, but in the US many traders sell 10-15% up/down current month’s options and buy 10-15% up/down options expiring in say next 6 months. It mainly profits from Theta i.e. the risk is here the future premium, it might increases if sentiments improve, it use to be 30 points per month, thus might become 60 points and bring loss, Moving Average Convergence Divergence (MACD). However every trade depends on the trader and his level of risk taking capability, knowledge and experience. I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other forms of social media. Bull Calendar Spread: the bull calendar spread strategy can be setup by buying long term slightly out-of-the-money calls and simultaneously writing an equal number of near month calls of the same underlying security with the same strike price. Testimonials Year 2020 to 2023 But depending on the Volatility (repeat that again – depending on the Volatility on that day) the price of NIFTY MAR 2015 9100 CE can be: a) The same – Volatility has increased so Time value (Theta) did not have much effect on the option plus Nifty also moved up 200 points. 2) Time vs. Now I think you can guess why the trader sells current months options and buys next months options. So the profit from the sold options should be more from the loss of theta from the options that were bought. I am a trader like you. . 1. Let me warn you. This strategy profits from the different characteristics of near and longer-term call options. Very interesting & full of knowledge article Dilip Sir.Keep writing..!!! Testimonials Year 2016 Testimonials Year 2017 If you change the strike prices they are known as Diagonal Calendar Spreads which I will discuss some other day. For example if they sense Volatility is going to increase for the next few days – they trade the Calendar Spread – mostly on the ATM options. For them it is more a Volatility play than anything else. This is done by professionals when they think Volatility will decrease. If the difference is less than 55 points you will lose money. If you think on the Feb expiry day this difference will increase you can sell Feb Futures and buy March Futures. Calendar Spread is a slightly complex but an interesting options strategy. One of them wins other losses. 11,800.00. The strategy most commonly involves puts with the same strike (horizontal spread) but can also be done with different strikes (diagonal spread). So your profits from Feb Future: 8945-8900 = 45. Started trading again from 2011 and never looked back since. Reverse Calendar Spreads behave exactly opposite of Calendar Spreads. 1,00,000 in your trading account, so … Nice to know you are reading every article posted here. Calendar spread is boring strategy wherein we are trying to exploit premium melting speed in shorter and longer expiration. This strategy profits if the underlying stock is outside the wings of the butterfly at expiration. If you’re not sure how to read option chain information, you should refer to this post.. It is not. This looks like an easy trade. However we will see that volatility also has a major role to play in Calendar Spreads. Note: Calendar Spreads are actually traded on points difference only on NSE as a single trade. Why? 11,200. Testimonials Year 2020 to 2023 Max loss is 55 points (which is very rare). Directional strategy makes money fast. My conservative trading course since 2014 is helping many retail traders just like you who have a job or business make consistent profits like this: What Traders Say About This Course In this trade real Futures are NOT bought or sold. The current month option will expire before the next month options, and the trader can profit. . I know English and Hindi. Now we are using a fixed 0.60% as a stop loss to minimize risk and increase the profitability. For example in the above case its 55 points. The trader has to pay money to trade Calendar Spread. But that may not be true. I used to employ this strategy in Nifty but insead of buying the current series i used to write them with buying the next series only if required. One Time Fee I am an Authorized Person (AP) of a Stock Broker. 3) Can be done on Futures too: Neutral Calendar Spreads can be done on Futures too. I then stopped trading and studied options like college exams. Why it looks easy is that the trader thinks that if Nifty goes against the sold options, the bought options will increase in value and save him from unlimited losses (true but he still loses money though limited), and of course if it falls the speed of the profit from the current month options will exceed the loss from the bought options (true and false – because it depends a lot on Volatility and movement of the stock). So basically it's a calendar spread? You can sell the Calendar Spread and buy it back for a profit later. The max profit can be attained only on the expiry day. If you know about Option Greeks, you may know it is because these options have more time value (Theta) therefore they are priced higher. totally risk free strategy better than nifty and bank nifty. The following image captures the month-long movement: Nifty hasn't seen any sudden action in this month so far with the lowest at 10589.10 INR and highest at 11023.20 INR, the highest being just near the present Strike Price of 11010.20 INR. Testimonials Year 2015 & 2016 When your view is Neutral on the stock but you feel Volatility will increase in future. The sold option will expire worthless. You can do this course from your home. Emotional Testimonial by a Young Woman Trader and Her Mother An investor, Mr. A is expecting no significant movement in near month contract, so he enters a Long Call Calendar Spread by selling near month strike price of 9000 call at Rs.180 and bought 9000 call for Rs.250.The net upfront premium paid to initiate this trade is Rs.70, which is also the maximum possible loss. Please ask your broker for more information. The calendar spread margin shall be charged in addition to worst-scenario loss of the portfolio. When a trader sells a put option, they are obliged to … Because you lose only if the difference is less than 55 points. Nifty options buying has limited risk but unlimited profit potential, I am going to teach you a trading strategy that can easily multiply your trading capital (money). Testimonials Year 2016 TheOptionCourse.com Copyright @ All Rights Reserved Dilip Shaw, Founder. Then Feb Future will be at 8900 and lets assume you were right and March Future is at 8970. This is because the options that are bought are costlier than the options that are sold because the bought options expire later. What People Say Just After Reading My Course Testimonials Year 2015 & 2016 Bear Put spread is a moderately bearish strategy. In other words I am a sub-broker. DISCLAIMER: I am NOT an Investment Adviser (IA). It does not matter which side the stock moves. Neutral Calendar Spreads are trade where the trader sells current month’s options and buys next months’ options. I am very confident that you will make money trading my strategies. Assuming you sold an option 200 points up in Nifty current month and bought a next month’s option same strike. Even if he sells this at break even – he makes good money. Short Call Calendar Spread. If you have read the chapters on pair trading, then understanding the calendar spread logic is quite straightforward. PURELY FUTURES CALENDAR SPREAD THREAD. we are offering best ever currency strategy.totally hedging strategy . We all know that Futures carry a premium. I am not responsible for any investment decision you take after reading any article in this website. It can be at 8500 or 9500 on that day. As you can see some months they make good money from the sold call and some month from the put depending on the stocks’ position. 8) Break-even for calendar spread seems to be very scary to me. There is more to it. Continue with Your Job In this article, we will get a basic understanding of a popular, but complex Options Spread Strategy: the Butterfly Spread. In contrast if the bank nifty fall in a great way then maximum loss will the premium paid by you while initiating the strategy. The spreads are a function of … 15.2 – Calendar spread logic. Some traders make amazing profits like Rs. Which means they keep on selling the next month’s options as soon as the current months expire – same strike. The trader keeps 112*100 = Rs. Long Call Diagonal Spread Implementing Long Call Diagonal Spread Trading Strategy. Before starting with this strategy you need to keep at least Rs. I was exploring various option spreads strategies and was checking the margin requirements for spreads on zerodha site, when i came across the nifty futures calendar spread. Margin blocked will be the max loss or the points being traded at that time. If the stock does not go near the short options – they keep eating the premium for the next 5 months. Profit from Feb and Profit from March. I only offer education for free on finance, risk management & investments in stock markets through the articles in this website. I know English and Hindi. This premium gets to zero on expiry day. Or if you think it will increase you can buy the spread and sell later. Its a bet between two persons. Regular Monitoring NOT Required You need not buy one Future and Sell another. Basically his view is this: if the stock remains here for the next 20 days – the ATM option that he sold will expire worthless, but, the options that he bought will still have 30 days time to expire – therefore it should retain a lot of value (though less than what it was 20 days back). Yes it can make great profits but one needs some skills to excel in this strategy. What People Say Just After Reading My Course, Emotional Testimonial by a Young Woman Trader and Her Mother, My conservative trading course since 2014, If you want to enroll for the course you can do so here, lost 7 Lakhs trading speculative trading without knowledge. 6. It is also called as Neutral Calendar Spread because the traders view is neutral on the market or the stock over the next few days or till the expiry of the sold options. You DO NOT NEED to monitor your trades every second. TA Knowledge NOT required If the implied volatility will increase. Say on expiry day Nifty is at 8900. Some amazing profits possible here. No need to monitor trades every second. Difference Between Other Courses And Mine If you want to enroll for the course you can do so here. its working in all condition market.you can trade also in intra day also but not every day.this is money making strategy no one give you this type of strategy in market. This course is good if you have a regular job or business. 6K-7K. 1) Sale vs. Buy: There is no need to buy next months options. HENCE PLEASE VIEW FUTURES CHART IN OTHER SOFTWARES TO HAVE AN UNDERSTANDING OF THE CONCEPT) Concept: CSS is a strategy with an objective of profiting from spreads between far month futures and near month futures. 8.1 – Choosing Calls over Puts Similar to the Bear Put Spread, the Bear Call Spread is a two leg option strategy invoked when the view on the market is ‘moderately bearish’. Modifications did in this strategy: After took suggestions and feedbacks from our clients, we did some modifications in terms of risk in our Bank nifty future strategy. Testimonials Year 2015 Page 2 To know more Call/SMS/WhatsApp me on 9051143004 or email me now. Interestingly the above would have been true had the option Greeks remained same for the next few days and the stock remains in tight range. This simplified approach assumes that the current price of futures is a reflection of everything known in the market. Now they can just keep these options as an open free trade of long strangle to look for a quick opportunity to make good profit either side. You can start trading from any day. 16.26 lakhs profit in 5 days though results may differ for all. HENCE PLEASE VIEW FUTURES CHART IN OTHER SOFTWARES TO HAVE AN UNDERSTANDING OF THE CONCEPT) Concept: CSS is a strategy with an objective of profiting from spreads between far month futures and near month futures. Implementing The Calendar Spread Options Trading Strategy I will use Nifty for this example. When I will discuss it, you will think its a great strategy which will almost always result in profits. You need not sell one Future and Buy another – you can accomplish this in a single trade. But small money accumulated month after month can become very big in only a few years. If this option is less than 119 (230-112) on the expiry day the trader will lose money. The stock option trade makes 30,000 in one trade and if SL is hit there is a way to recover losses plus make 30k in that trade. This means you expect not much movement over the next few days on the stock or the index. Nifty is bullish, Trade bullish view using nifty option spread Strategy; Benefits of Trading with Risk Defined Options Strategies; General Election 2019 Results and Nifty Banknifty Options; Upstox Brokerage Review in 2020; Options Trading Strategies to Deploy for Budget Session; How to trade Nifty … MUMBAI: With markets surrounded by uncertainty ahead of the Union Budget on July 5, wealthy traders could initiate a diagonal calendar spread strategy on the Nifty.This involves the sale of an 11400 put option expiring on June 27 and simultaneous purchase of an 11200 put expiring on July 25 as a hedge against greater-than-anticipated downside. Hope you understand now. I did a lot of research, read books and did countless paper-trading before being profitable. It only looks easy. Strike selection while trading Options is the most essential part to succeed. And Volatility too is unknown to the trader. Or. 5. It is done on same strike. In the above example on the 16 th June if bank nifty trade at 18000 then you enjoy the maximum profit. 2) Buy 1 Lot Next Month’s (or any months option expiring after the options that were sold). INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. Because profits from the sold options are more than the loss from the bought options. The calendar spread strategy in options success for the NIFTY or any index depends on the implied volatility change and underlying price change. For now keep in mind that Calendar Spreads has a max profit point we discuss later. Live Technical Charts(Java) Free Cash Charts (Intraday/Daily/Weekly); Futures Technical Charts (IntraDay/Daily/Weekly) (Intraday/Daily/Weekly) Options Technical Charts (IntraDay/Daily/Weekly) (Intraday/Daily/Weekly) Continuous Futures Charts b) More than 230 – Volatility has exploded, increased too much, so much so that it surpassed the option premium eaten by the time value. India VIX (Volatility): 20.02 (Now that we have a major event next month – Budget 2015 – I assume volatility will keep rising till that day and crunch the next day when the news is out. Not too much money needed to trade They sometimes do it in both Calls and Puts – thus making it a Double Calendar Spread. NO Software Required Since trades are properly hedged there is no stress in trading my strategies. I didn't use to receive credit but because the current series will expire soon i used to write comfortably. There is a sag otherwise. You can read about me here. Option Greeks especially Volatility plays a major part in deciding what happens to these options; and this is where traders fail. It is to profit from the difference of Theta (time value) of the current month sold options vs. the next months bought options. Risk is Limited (But cannot be defined or calculated before the trade is made), Reward is also Limited (This too is unknown; exact profit is known when the trade is closed), 1) Sell 1 Lot Current Month Option This is the max profit zone as in the image above. Time Decay factor of near period expiry, if the price of the security remains relatively stable in near period. The difference is 9000-8945 = 55 points. What Others Charge for Courses. Nifty futures - Calendar spread strategy (CSS): (FUTURES CHART NOT POSTED AS TRADINGVIEW DOES NOT HAVE NIFTY FUTURES CHART. Moreover stock market investments and trading are subject to market risks. Latest performance with 25 Lot size [JULY 2020 – SEP 2020]: Scaling Possible Hope I am able to help you understand that Calendar Spreads are more complex than what most of us think about.

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