Trading

Stock Option Vs Index Option

stock option Less Liquid compared to index option, have no upper or lower limit

stock option are mainly monthly, stock option have risk of ITM and ATM on monthly expiry

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Rules for Intraday Trading

Strategy Selection [Option Selling]

Timing for Entry and Exit of Trade

Define your Target Profit and Stop Loss [1 percent of the Capital deployed]

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Notes on Strangle and Straddle

When taking straddle or strangle please check the premium for both and also the Delta value

Also buy the respective option for Margin benefit or hedging

In case of specific directional trades try to sell Upper strike or lower strike options accordingly to hedge your trades

Always sell option of next or monthly contracts, avoid current week contracts

Strangle Strategy on Stocks

Consider Low Beta or Low Volatile Stocks - Rangebound - 10 percent

Avoid taking trade when VIX is high, Stock Events [Results]

Stop Loss for first 15 days [thrice the total Premium], after that [twice  the total Premium]

Note - Maintain Low Transaction Charges - Avoid Over Trading

minimum 50 percent decay of Call or Put for making any adjustment to the trade

sell the next strike at 10 percent far

not more than 1 adjustment on each side after that delta neutral

hedge for the put is more required than for call option

When using Zerodha set PNL alert to close the trade or track the trade

RSI Notes

When RSI crosses above 25 for Nifty Stocks

When RSI [10] crosses below 30

When RSI[10] crosses above 70 its a buy signal