After a highly volatile expiry, you can see volatility is decreasing. In my previous weekly analysis and weekly options strategy posts I told that high volatility brings new opportunities but it brings high risk too.
So it’s very important to keep your risk management to high side when volatility is high so that you can catch those good and high probability opportunities, you will get once volatility starts decreasing.
Do you know? It’s always good to make money in the trending market. Most of the strategies are working very well in this type of trending market. We will get most of the whipsaws in the sideways market only. That means changes are high to make money in trending markets.
But the outcome you are getting is totally different. Why you are losing money even there are high chances to make money? Possible reason is not following risk management properly.
In the trending market, where we need to focus more on risk management, mostly we are fascinated about returns. We never focus on how can we minimize our risk. We always try, how to make big. Results one bad trade wipes out all the profits we have made till now along with the capital we have deployed too and we are standing at the exact point where we have started.
Don’t think that only you are doing this. We did these same mistakes. Believe me I too did. Doing mistakes is always good. Important is learn from these mistakes. If you are doing mistakes and learning from these mistakes that means you are on a right track.
So my dear friend, Keep one thing in mind. Always focus more and more on risk management. This is the only thing which will help to survive here. And if you manage to survive here, profit will come automatically.
Successful trading is not about making big. It’s all about how to protect yourself from big losses. So again I’m saying focus more and more on risk management.
Nifty Weekly analysis with Options strategy
In the last weekly analysis and options strategy post i shared that 9100 – 8800 is acting as a resistance zone. A breakout from 9100 will only give a buy signal to go long. Till then avoid any new long position.
Same thing you can see on chart. After a huge upside movement in last week, this week nifty was trading in the range of 8000 – 9000. Now immediate looks like at 8000, a breakdown will lead to lower levels till 7000 & 6500.
Right now there is no clear indication for a long or short trade. Overall trend is completely down. So “Sell-on-rise” should be our strategy here.
A new short signal will generate below 8000. Keep tracking Open interest data too for more confirmation.
Nifty weekly Options Chain analysis
Based on option chain data, the highest Open interest stands at 8500 CE & 8000 PE, followed by 8400 CE & 7500 PE. PCR of all strikes is 0.82, which indicates a slightly oversold market. PCR at 8000 stands at 4.24, which is acting as an immediate support level.
The Put-call ratio at 8500 stands at 0.28, which is acting as a resistance level. Equally, important indicator Option Pain is at 8200, indicating weekly expiry at 8200. A shift in option pain will provide further levels of expiry. So keep tracking max pain.
Significant open interest buildup on both the side, which indicates that the market is facing support from both the side.
Keep tracking open interest to analyze market participant’s behavior. If you don’t know how to analyze open interest for weekly option hedging strategies. Just enroll for our Option Strategies – A Mentorship Program.
Nifty weekly Options Strategy: Iron Condor
Initially, you can keep a stop loss of 8500 & 7500 for this strategy. Means square off if you find nifty is giving a breakout or breakdown. Or you can do this adjustment too.
If you find that Nifty is giving a breakdown and sustaining below 7500 then square off 8400 CE & 8600 CE in profit, and short 8000 CE and buy 8200 CE.
The same thing you can do with put spread means if you got a breakout from 8500. You can shift your put spread to 400 points up.
If you want to learn these strategies and their adjustments in more practical ways with live mentorship, You can enroll in our Option Strategies – A Mentorship Program(33% OFF).
BankNifty Weekly Analysis with options strategy
We saw a sharp correction in Bank Nifty. Banknifty broke its major support zone (22000 – 20500) made a new 3-year low. Now 22000 – 20500 is acting as the strong resistance zone. A breakout from this zone will give us a new buy signal to go long.
On the downside, the Next crucial support level is 17500. A breakout from 17500 will lead to 13500. At 13500, bank nifty has a very strong support level and I feel Bank nifty should sustain here, but nowadays sentiments are totally weak so it’s too early to say anything.
So better trade with proper hedge and keep your positions with limited risk on both sides.
Bank Nifty Weekly options chain analysis
Based on option chain data, the highest Open interest stands at 19000 CE & 17000 PE, followed by 18000 CE & 16000 PE. PCR of all strikes is 0.77, which indicates a neutral market. PCR at 17000 stands at 8.37, which is acting as an immediate support level.
The Put-call ratio at 18500 stands at 0.14, which is acting as a resistance level. Equally, important indicator Option Pain is at 18000, indicating weekly expiry at 18000. A shift in option pain will provide further levels.
If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.
BankNifty Weekly Options Strategy: Iron Condor
If you find that BankNifty gives a breakdown and sustaining below 16400, then Shift your Call spread to 1000 points down.
The same thing you can do with put spread means if you got a breakout from 18500. You can shift your put spread to 1000 points up.
If you want to learn these Weekly expiry option strategies and their adjustments in more practical ways with live mentorship, You can enroll in our Option Strategies – A Mentorship Program(33% OFF).
Much Check this also– Performance of the Option strategies, Nifty & BankNifty Weekly Analysis with Option strategy, Nifty Option Strategy for Budget Session, A low-risk options strategy in LICHSGFIN, An iron condor options strategy in ICICIBANK, Reverse Jade Lizard options strategy in UPL, A high probability options strategy in YESBANK
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*( Please avoid any question like which Call or Put we should buy in the coming week).
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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.