The biggest event is history and all along with that all uncertainty are also gone now. Above price chart is 30 min candlestick of RIL. Based on our data reading we have arrived at conclusion stock may remain down to sideways until this week monthly expiry, 30th May. What trade would you take? We choose couple of strategies based on our reasoning.
RIL PE Butterfly
This is 3 leg PE butterfly with head pinned at 1320 and wings around 1300 and 1340, in trading world we call it 20 points fly.
The above strategy needs margin of 23.8 lac
Max Profit of 88000 @ 1320 Expiry
Max Loss of -12000 |above 1340 or below 1300
For demonstration purpose we have shown strategy on 20 lots (it can be done 2 lots also)
Our whole point here is that even if you bet 20 lots max you lose is 12000, so risk reward is marvelous. Options are best instrument when it comes to managing risk.
RIL PE Spread
Another strategy that we have here is for someone who is more aggressive and in that case we have designed 2 leg PE spread.
RIL is trading around 1330, 3 Days to Expiry (DTE)
Two leg PE 1:3 PE back spread in RIL. Based on our data reading and underlying view we thought this can be good strategy if you are aggressive trader.
The above trade is the way we would trade based on our data analysis and market view. This tool is very tiny VBA spreadsheet written by us to carryout small but important data points which we use to analyze and carryout trade.
If you are excited to learn this kind of data analysis and trade planning checkout our workshop section. Alpha Trader brings right from underlying view to trade adjustment. In two days you would learn how to use our tool and also get insight into how to trade on your own.
One thought on “Expiry week Trading”