Hello guys, Hope you are doing good. In this article, I will share the best option strategy we can use in a sideways movement in the index or any particular stock.
As you know, every week I was trying to share a strategy but due to the highly volatile market and this corona pandemic, I took some break to analyse different strategies. The good news is: From today, I’m starting again.
The reason for this break was to provide the best option strategy that not only helps to keep your risk on the limited side but will generate some decent return for you.
After analysing many strategies I found that this could be the best strategy even for a beginner trader too. Today I’m taking TITAN for our strategy. I will share, why I choose that stock? reasons behind that strategy and what adjustments we can do if the script starts moving beyond our range?
Since this is a non-directional strategy. So before initiating a strategy, we have to find the range for that particular stock. To find that range I’m using Tradingview platform for chart and Sensibull to analyse Option chain data.
Options Chain data can give you a more clear picture. So if you don’t know about technical analysis or how to read charts, it’s perfectly ok. Just follow Open interest and try to find the range.
I will show you, how can we find a range based on Open interest data in this article. So read this article till the end. If you have any questions, you can ask in the comment box. I will try to solve all the questions.
Best Option strategy for a sideways movement in Titan
After a sharp decline, we can see titan is trading in a range of 1000 – 800. You can see i’m not using any technical indicator or any tool. Reason is we don’t need it. Just find the possible Support and resistance and thats it.
You don’t need to be master in technical analysis and all. Just find support and resistance based on the latest HIGH-LOW and compare it with previous HIGHs & LOWs. If you find that script has given some respect to these levels in history too. That means these levels are valid.
As you can see on the chart, TITAN has spent some time between these levels (1000 – 800) in 2018 too. That means these are important levels. Second thing is, we can crosscheck with open interest data too for more confirmation. Let me share how:
Option chain analysis for Titan
This is May & June expiries option chain data. If you look at 1000 CE & 800 PE carry the highest Open interest that means these are the resistance and support levels based on current data.
1000 is acting as a strong resistance level while 800 is acting as a strong support level. Same levels we are getting on charts too. Now you can see both the analysis giving the same (1000-800) range.
This is the simplest way to find the range for a particular stock or index. One thing you should keep in mind here. This range is not consent. We are getting this range based on historical data, It is not predicting anything.
The range you are getting today can change anytime. So you have to keep tracking and if you find that, this range is shifting with any movement in the price you too can adjust your position accordingly.
Now you know the range for Titan. So we have to select the best option strategy which can give us a profit between this range and has a limited risk outside this range.
Best option strategy for Titan: Iron Condor
Iron Condor is the strategy that can give us good profit if Titan will remain in that range(1000-800) and It has limited risk on both the side. You can see that our breakevens are 1000 & 800. So we don’t need to do anything until TITAN is trading between this range.
Now, what should be our adjustments if TITAN starts trading outside this range?
You can shift your call spread to 100 points down after a successful breakdown from 800. Means shift you call spread to 900. Same you can do with Put spread after a successful breakout from 1000.
You can join our Options Strategies – A Mentorship program to learn some more adjustments in a practical way.
I hope my articles are helping in your profitable trading. If you have any feedback or suggestions please type in the comment box. Your feedback will help me to do something better in the future.
Please type your queries related to a Best options strategy in Titan in the comment box. I will try to answer all your queries.
Much Check this also- A high probability options strategy in YESBANK, Option Buying vs options selling, Modified Condor Option Strategy in VEDL, Bull Call Ladder in ZEEL, Iron Condor in SBIN, Why People Lose Money & Nifty and Bank nifty index analysis with Option Strategy,
Options Strategies – A Mentorship Program
On the 1st of September 2019, We have launched a new mentorship program for Option strategies, in which we are discussing how can we deploy these strategies? What rules we should follow before taking a trade? and what should be our adjustments if the script is moving against your direction?
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DISCLAIMER: – we are not a SEBI research analyst. Views posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods. This information should only be used by investors and traders who are aware of the risk inherent in securities trading.