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Volatile Days Trading

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Praba Karan
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17 views

Volatile Days Trading

Uploaded by

Praba Karan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Volatile Days Trading

On Budget day, Market will be high VOLATILE; momentum will be fast both up &
down.

Most will trade Buy CE/PE ATM as Long straddle, when IV increases both side option
premium will increases.

Feb 1st 2023 - Wednesday, Jan 30th 2023 – Monday (Mostly choose 2 days before evening
3.15 PM or 2nd Day Morning 9.15 AM) – Low Profit, Risk Free

Buy Option 2 days before for the budget day (Monday Morning)

Use Bank nifty – due to high volatility

Buy Both CE & PE both side for your risk based (Range choose as per wish ATM, 200 +/-
, 500 +/- Points away)

Close both options on Feb 1st Morning at 10.30 AM on Budget Day


After budget day only markets try to be in Non-directional move.

Sell Option on Budget day (Evening 3.15 PM) – IV will drop over the day, Premium
decay & stabiles

Sell Both CE & PE both side for your risk based (Range choose as per wish ATM, 200 +/-
, 500 +/- Points away)

Hold till expiry – wait till profit


IV PATHI PAPOOMAA …..
IV will look mostly by option seller. It will give clear view about market based on that
seller will deploy strategy.

IV – Option contract is that value of the volatility of the underlying instrument which,
when input in an option pricing model, will return a theoretical value equal to the
current market price of said option.

Movement of option price in terms of 0 to 100% refers to IV. Option price will fluctuate
daily but sometimes it moves violently in result time, News time.

Buyer, seller will come to the strike in unusual way then IV increase. High IV times
most people will buy ATM CE/PE try to make profit using IV.

Buyer will ready to buy at Market price it will cause to increase the premium price. So,
only in High IV times seller need to aware of the position.

IV will mention whether the premium is trading high or not. High IV time no need to
buy, sometimes IV will drop it cause the premium price to drop suddenly. Seller will
quote for cheap price.

We need to buy when IV was Low. When IV increase premium will increase. In
sensibull, we have screener in that filter with High IV stocks mostly first three stock
will come under result.
HAL – 3 % down from spot, not due to result but some news it dropped. But for result
based stocks try to take position 2 days before the result. Create Long straddle on the
result day it will give profit for sure.

Upcoming result stocks note down as paper trade and take the position.
For example, 44100 CE – IV Less so premium also less compared to PE Premium.

Nifty - 14 to 18 – Normal IV, Bank Nifty – 18 to 22 – Normal IV

Before budget days IV will always high & premium also high. Look over IV in stocks, IV
drop will affect the premium. Before IV increase tries to buy after increase don’t buy.
INAIKU NAMMALA ORU VAZHI PANNAMA VIDA MATRU POLAYAE …..
Most option seller find the market range based on the India VIX using some calculation.

Based on the calculation, we have upside & downside range

Range = VIX / sort(T)%

VIX = 11.32, Yearly = 365, Monthly = 365/30 = 12.16, Weekly = 365/7 = 52.14, Day =
365/1 = 365

Range = 11.32/sqrt(12.16)% = (11.32/3.48) = 3.25%

It showing monthly we have 3.25% momentum

Spot calculation = 18747 * 3.25/100 = 610/ 2 = 305

Mostly market travel within 19052 to 18442 for monthly.

Either side Upside = 18747 + 305 = 19052 – R1

Either side Downside = 18747 + 305 = 18442 – S1

One side Upside = 18747 + 610 = 19357 – R2

One side Downside = 18747 + 610 = 18137 – S2

India VIX – Volatility of Indian Market, VIX is calculated based on option premium

Stocks have high volatile, choose only in Index


We can predict Nifty Range based on VIX

If VIX 15 means, that Nifty will move 15% up or down for the next one year

We can convert this to Monthly, weekly, day VIX range

Calculate

1 Month VIX = sqrt(12) = 15/3.46 (VIX) = 4.33% Up or Down

1 Week VIX = sqrt(52) = 15/7.21 (VIX) = 2.08% Up or Down

1 Day VIX = Sqrt(365) = 15/19.01 (VIX) = 0.78% Up or Down

If we take strangle using the VIX range, mostly we will be in profit

NANDRI VANAKAM ….

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