As promised in my previous posts, I present a simple investment strategy for making profits from Bank Nifty Options. I use the word investment since standard principles of investment have been used while designing this strategy. The logic for investing and not trading in Bank Nifty options has already been explained in my earlier posts. A striking feature of this strategy is the standard timing i.e. entering every month at a Pre-Decided time, and exiting every month at a Pre-Decided time. I couldn’t have reached this specific timing without Management Astrology. The whole operating procedure is simple and standard. Following is the strategy:
Strategy Type- Ratio spread with Calls 1x2
Instrument name: Bank Nifty Monthly Options, Current month series
Standard Entry Time: Opening time of first day of every series. Since this strategy involves both selling and buying, a few minutes here or there (say 15 to 30 minutes from opening) won’t make much of a difference. So, traders can wait for the rates to be settled, and then enter this strategy.
Standard Exit Time: Towards closing time of Friday (or last working day) of two weeks before expiry. If Thursday of last week of a month is the expiry day, Friday of two weeks before expiry should be the exit time for this strategy (Roughly 13 calendar days before expiry). So, effectively, this strategy is a 17 day strategy, and your capital is free for usage for the remaining 13 days. That’s the biggest plus point of this strategy.
Repeat the above timing: This timing should be repeated in every series. Isn’t this simple?
Standard strike prices: There is no confusion in choice of strike prices. The benchmark is opening price of futures in a series. If for instance, Bank Nifty opens between 25000 and 25250 in a series, one 25000 Call should be bought and two 26000 calls (1000 points up from the bought call) should be sold. If Bank Nifty opens between 25251 and 25500, the strike price for buying a call is 25500 and for selling two calls (1000 points difference) is 26500. In-between strike prices shouldn’t be touched. In monthly options, there is very less liquidity at In-between strike prices.
Repeat the above procedure in every series: This simple procedure (which even a beginner in stock market can understand) should be repeated every series. I had mentioned in my previous post that for making profits from Bank Nifty, conditions of Jupiter have to be satisfied. Creating a plan and sticking to it irrespective of the conditions is a very important condition of Jupiter. Don’t let the mood swings inspired by moon to ruin your strategy. Stick to the plan is the mantra for getting success in this strategy.
Results: I applied this strategy to 42 series (3.5 years) starting from July 2014, till December 2017. The profits were 111 %. This strategy produced profits in 28 series and losses in 14 series. Thus, the success rate was 66.67%. Profit zones were roughly between 200 and 1800 points from the buying strike price (on the upside). There is a nominal loss (not unlimited as in case of stocks and mutual funds) on the downside. There can be an argument that since this period was largely bullish, Ratio spreads with calls are bound to work. I strongly disagree with this argument. When the whole world was going through a bear phase between 2008 and 2010, Ratio spreads with calls produced profits (in standard and specific time periods similar to this strategy). I can prove it with figures. Even in this selected time period (July 2014 to December 2017), Bank Nifty made huge upward and downward swings. Those who have traded Bank Nifty in these 42 months would be aware of the agony when Bank Nifty had dipped below 14000 in early 2016.
Remaining 13 days?
111% profits are while trading (or investing?) for 17 days in a month. Remaining 13 days can also produce the same quantum of profits. The logic to make profits in these 13 days remains the same, but the method changes. This method is as simple as explained in the above strategy.
The Management Astrology Angle
Can you extend the closing till expiry? Will it produce the same results? The answer is a strict no. The same strategy if carried till expiry actually produces negative results. As explained before, every stock or trading instrument has its own management astrology chart. Options strategies give different results in different time zones for the respective management astrology charts. A technical analyst can never provide a standard answer to the above. He can only complicate the things for you so that he can take credit for profits and find the escape route through Stop Loss in case of losses. Timing is extremely important while making profits through options strategies. I will keep sharing many interesting Management Astrology observations for Stock Market. The aim is to make life easier for traders.
Profile of the Author
Kujnish Vashisht, Author of this strategy is a pioneer of Management Astrology. He advices Businesses/Careers on the basis of Management Astrology, and can be contacted at the below mentioned mail id and mobile nos. He also provides training programs on Options segment of Stock Market.
Copyright: Kujnish Vashisht, Expedient Consultants, expedient33@gmail.com, 91-9779883347, 91-9878904347. www.chanakyaneeti.com, www.sharepundit.com