10. I was exploring various option spreads strategies and was checking the margin requirements for spreads on zerodha site, when i came across the nifty futures calendar spread. NO Software Required Testimonials Year 2017 HENCE PLEASE VIEW FUTURES CHART IN OTHER SOFTWARES TO HAVE AN UNDERSTANDING OF THE CONCEPT) Concept: CSS is a strategy with an objective of profiting from spreads between far month futures and near month futures. TheOptionCourse.com Copyright @ All Rights Reserved Dilip Shaw, Founder. 2) Time vs. Yes they pay good cash to trade this – but they also get amazing protection. Emotional Testimonial by a Young Woman Trader and Her Mother Regular Monitoring NOT Required I hope why this trade is made is clear. Do Course From Your Home If you want to enroll for the course you can do so here. Since there are just two trades you pay less brokerage. Now they can just keep these options as an open free trade of long strangle to look for a quick opportunity to make good profit either side. What People Say Just After Reading My Course Testimonials Year 2016 If the profits from the sold options exceeds the losses from the bought options – the trader keeps the difference. Testimonials Year 2015 & 2016 Buying one put option and selling a second put option with a more distant expiration is an example of a short put calendar spread. 8. We really do not know where Nifty and Volatility will be on expiry day. I started trading stock markets since 2007. Example on 4 lots or 100 shares): Spot Nifty: 8890 This is not as easy as it sounds. Scaling Possible It is also called as Neutral Calendar Spread because the traders view is neutral on the market or the stock over the next few days or till the expiry of the sold options. The trader keeps 112*100 = Rs. Then Feb Future will be at 8900 and lets assume you were right and March Future is at 8970. It is done on same strike. Testimonials Year 2015 Nifty options buying has limited risk but unlimited profit potential, I am going to teach you a trading strategy that can easily multiply your trading capital (money). 3) Can be done on Futures too: Neutral Calendar Spreads can be done on Futures too. Some amazing profits possible here. Testimonials Year 2020 to 2023 It is to profit from the difference of Theta (time value) of the current month sold options vs. the next months bought options. b) More than 230 – Volatility has exploded, increased too much, so much so that it surpassed the option premium eaten by the time value. It never happens. On expiry day of sold options (26-Feb-2015) Nifty is at 9090. A Calendar Spread on Nifty Future is traded like this: If you think the difference will be less than 55 on FEB expiry. If you still want to try please try on one lot only. The difference is 9000-8945 = 55 points. We all know that Futures carry a premium. Mumbai: The uncertainty over the market outlook after a 70% rally in the benchmark indices from their March lows has analysts recommending a Nifty options strategy that bets on moves on either sides. It only looks easy. If this option is less than 119 (230-112) on the expiry day the trader will lose money. If the stock holds steady, the strategy suffers from time decay. I only offer education for free on finance, risk management & investments in stock markets through the articles in this website. It is mainly to take advantage of the sharp time decline in options that are close to expiration. Diagonal spread options strategy. MUMBAI: With markets surrounded by uncertainty ahead of the Union Budget on July 5, wealthy traders could initiate a diagonal calendar spread strategy on the Nifty.This involves the sale of an 11400 put option expiring on June 27 and simultaneous purchase of an 11200 put expiring on July 25 as a hedge against greater-than-anticipated downside. Copyright Infringement: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement. The strategy most commonly involves puts with the same strike (horizontal spread) but can also be done with different strikes (diagonal spread). 11. However every trade depends on the trader and his level of risk taking capability, knowledge and experience. Thanks Abhishek. When your view is Neutral on the stock but you feel Volatility will increase in future. 100% Hedged 2) Buy 1 Lot Next Month’s (or any months option expiring after the options that were sold). Testimonials Year 2016 INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. Modifications did in this strategy: After took suggestions and feedbacks from our clients, we did some modifications in terms of risk in our Bank nifty future strategy. You can read in details here. Emotional Testimonial by a Young Woman Trader and Her Mother Testimonials Year 2015 Page 2 About the author: Because profits from the sold options are more than the loss from the bought options. I am Dilip Shaw. However STT is calculated just like its done on a Future trade so that still remains an issue. Testimonials Year 2020 to 2023 You can start trading from any day. For now keep in mind that Calendar Spreads has a max profit point we discuss later. Testimonials Year 2015 Page 2 If the implied volatility will increase. 8) Break-even for calendar spread seems to be very scary to me. Hope it helps. You DO NOT NEED to monitor your trades every second. Calendar Spread Margin: Contracts where futures position at one maturity is hedged by an offsetting futures position at a different maturity would be treated as a calendar spread. It is more common among professionals and institutional investors because full margin is blocked. What People Say Just After Reading My Course, Emotional Testimonial by a Young Woman Trader and Her Mother, My conservative trading course since 2014, If you want to enroll for the course you can do so here, lost 7 Lakhs trading speculative trading without knowledge. You get two conservative non-directional strategies on options, one conservative stock option strategy and two conservative directional strategies on Future & Option combination. Hence, a hedge in Nifty index via a small interval Bear Put spread is advised to safeguard from any possible pull back. What enticed me towards this was : a) Low margin requirement. 7. NSE recognizes Calendar Spreads on Futures. It is not. And Volatility too is unknown to the trader. Let me warn you. He profits from both months’ options. Call me if you need any help trading options on 9051143004. What People Say Just After Reading My Course Testimonials Year 2019 You can do this course from your home. Selling put options is a really simple way for Indian traders to get started with options.. Suppose the Nifty is trading at 8960 on 10th March, 2017. Links to my course testimonials pages: See visualisations of a strategy's return on investment by possible future stock prices. In the course you will learn how to select the strike prices. Nifty Calendar Spread startegy | Easy Earn | Hindi - YouTube You will make profits consistently. You can sell the Calendar Spread and buy it back for a profit later. The success rate is more than 80%. Difference = 45-30 = 15 Points profit. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given in this website. If you’re not sure how to read option chain information, you should refer to this post.. In contrast if the bank nifty fall in a great way then maximum loss will the premium paid by you while initiating the strategy. Stress-Free Trading Free stock-option profit calculation tool. For them it is more a Volatility play than anything else. You need not sell one Future and Buy another – you can accomplish this in a single trade. , Previous post: Technical Analysis Does It Make Money. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website. Buying and selling Puts will constitute bearish diagonal spread. Some traders make amazing profits like Rs. Nice to know you are reading every article posted here. The Bear Call Spread .. India VIX (Volatility): 20.02 (Now that we have a major event next month – Budget 2015 – I assume volatility will keep rising till that day and crunch the next day when the news is out. 1375 + brokerage. Nifty futures - Calendar spread strategy (CSS): (FUTURES CHART NOT POSTED AS TRADINGVIEW DOES NOT HAVE NIFTY FUTURES CHART. Live Technical Charts(Java) Free Cash Charts (Intraday/Daily/Weekly); Futures Technical Charts (IntraDay/Daily/Weekly) (Intraday/Daily/Weekly) Options Technical Charts (IntraDay/Daily/Weekly) (Intraday/Daily/Weekly) Continuous Futures Charts (We will soon know the margin requirements on Calendar Spreads.). Running a calendar spread with calls means you’re selling and buying a call with the same strike price, but the call you buy will have a later expiration date than the call you sell. The calendar spread margin shall be charged in addition to worst-scenario loss of the portfolio. ... Long added in Nifty and short added in Banknifty. When I will discuss it, you will think its a great strategy which will almost always result in profits. 9. Thus by the time they reach the month in which the options were bought – they may already be in good profit. This course is good if you have a regular job or business. Short Call Calendar Spread. An investor, Mr. A is expecting no significant movement in near month contract, so he enters a Long Call Calendar Spread by selling near month strike price of 9000 call at Rs.180 and bought 9000 call for Rs.250.The net upfront premium paid to initiate this trade is Rs.70, which is also the maximum possible loss. Why? . I then stopped trading and studied options like college exams. 1,00,000 in your trading account, so … 11 Reasons Why You Should Do The Course: I have been trading since 2007, but lost a lot of money till 2010. I am a trader like you. Volatility: This is a very important point. This is best possible situation for the trader. Or 8970-8900 = 70 – 55 = 15. I am an Authorized Person (AP) of a Stock Broker. Of course you can do vice-versa if you think the difference will decrease. Since 2011 I am trading Nifty options profitably. This strategy profits if the underlying stock is outside the wings of the butterfly at expiration. I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other forms of social media. Max loss is 55 points (which is very rare). Basically his view is this: if the stock remains here for the next 20 days – the ATM option that he sold will expire worthless, but, the options that he bought will still have 30 days time to expire – therefore it should retain a lot of value (though less than what it was 20 days back). Therefore there is no guarantee that everyone will achieve the same or similar results. What Others Charge for Courses. This is your trade (Real prices as on 29-Jan-5015. Margin blocked will be the max loss or the points being traded at that time. So the profit from the sold options should be more from the loss of theta from the options that were bought. Suppose Nifty is trading at 8800. Time Decay factor of near period expiry, if the price of the security remains relatively stable in near period. So basically it's a calendar spread? There is a sag otherwise. If the stock does not go near the short options – they keep eating the premium for the next 5 months. What Traders Say About This Course TA Knowledge NOT required The following image captures the month-long movement: Nifty hasn't seen any sudden action in this month so far with the lowest at 10589.10 INR and highest at 11023.20 INR, the highest being just near the present Strike Price of 11010.20 INR. But please do not attempt just based on what is written here – if the difference is less than 55 on expiry, you will lose money. Description. Before starting with this strategy you need to keep at least Rs. In this article, we will get a basic understanding of a popular, but complex Options Spread Strategy: the Butterfly Spread. If done on Futures your broker should block only the maximum loss. The stock option trade makes 30,000 in one trade and if SL is hit there is a way to recover losses plus make 30k in that trade. The spreads are a function of … Testimonials Year 2017 Option Greeks especially Volatility plays a major part in deciding what happens to these options; and this is where traders fail. Buy 100 NIFTY MAR 2015 9100 CE @ 230, Total debit: 230-112 = 118*100 = Rs. We will soon know its not that simple. Which means they keep on selling the next month’s options as soon as the current months expire – same strike. When a trader sells a put option, they are obliged to … 5. 8.1 – Choosing Calls over Puts Similar to the Bear Put Spread, the Bear Call Spread is a two leg option strategy invoked when the view on the market is ‘moderately bearish’. Yes it can make great profits but one needs some skills to excel in this strategy. That way even if you make 10 points on this, its a great profit. I know English and Hindi. Before reading please understand that for all 5 strategies, strike selection will be taught. Its a bet between two persons. To know more Call/SMS/WhatsApp me on 9051143004 or email me now. The strategy will be successful 1. Is The Stock Market Controlled By Stock Operators And Brokers? I will discuss how you can benefit from this as well. No need to monitor trades every second. If yes tell me do you wait till expiry or book your profits or losses within a specified time/points? Nifty futures - Calendar spread strategy (CSS): (FUTURES CHART NOT POSTED AS TRADINGVIEW DOES NOT HAVE NIFTY FUTURES CHART. DISCLAIMER: I am NOT an Investment Adviser (IA). Since trades are properly hedged there is no stress in trading my strategies. One Of My Client Is Making Rs.25k Per Week Nifty is bullish, Trade bullish view using nifty option spread Strategy; Benefits of Trading with Risk Defined Options Strategies; General Election 2019 Results and Nifty Banknifty Options; Upstox Brokerage Review in 2020; Options Trading Strategies to Deploy for Budget Session; How to trade Nifty … Then Buy Feb Futures and Sell March Futures. I am not responsible for any investment decision you take after reading any article in this website. In this trade real Futures are NOT bought or sold. Click here to read the disclaimer in full. c) Is less than 230 – most possible scenario. Or if you think it will increase you can buy the spread and sell later. This is done by professionals when they think Volatility will decrease. totally risk free strategy better than nifty and bank nifty. 1) Sale vs. Buy: There is no need to buy next months options. . You can sell the Calendar Spread and buy it back for a profit later. The trader has to pay money to trade Calendar Spread. If you think on the Feb expiry day this difference will increase you can sell Feb Futures and buy March Futures. The diagonal spread options strategy is equivalent to calendar spread where short term options are sold, and the long term options are bought. For example Nifty is at 8890; NIFTY FEB 2015 Future is at 8945 and NIFTY MAR 2015 Future is at 9000 (real prices as on 29-Jan-2015). You can just sell the Calendar Spread at 55 points and buy it back whenever it comes in profit or on expiry day. Testimonials Year 2015 & 2016 we are offering best ever currency strategy.totally hedging strategy . Directional strategy makes money fast. I know English and Hindi. One Of My Client Is Making Rs.25k Per Week Margin blocked for one lot will be 55*25 = Rs. Why it looks easy is that the trader thinks that if Nifty goes against the sold options, the bought options will increase in value and save him from unlimited losses (true but he still loses money though limited), and of course if it falls the speed of the profit from the current month options will exceed the loss from the bought options (true and false – because it depends a lot on Volatility and movement of the stock). This strategy profits from the different characteristics of near and longer-term call options. Technical knowledge is NOT required. No need to wait for expiry. For example if they sense Volatility is going to increase for the next few days – they trade the Calendar Spread – mostly on the ATM options. 6K-7K. On options unfortunately NSE does not recognize Calendar Spread as a limited loss strategy therefore full margin will be blocked for selling options. Implementing The Calendar Spread Options Trading Strategy I will use Nifty for this example. No. This premium gets to zero on expiry day. If the difference is less than 55 points you will lose money. Depending on the loss on this option the trader makes a profit or a loss. A long calendar spread is a good strategy to use when prices are expected to expire at the strike price at the expiry of the front-month option. One Time Fee This simplified approach assumes that the current price of futures is a reflection of everything known in the market. If you change the strike prices they are known as Diagonal Calendar Spreads which I will discuss some other day. If you have read the chapters on pair trading, then understanding the calendar spread logic is quite straightforward. In other words I am a sub-broker. One of them wins other losses. its working in all condition market.you can trade also in intra day also but not every day.this is money making strategy no one give you this type of strategy in market. Diagonal spread is a kind of options spread where far month option is bought and near month option is sold. 25*10 = (250/1375) * 100 = 18.18% return in 30 days or less just on 10 points. If Volatility drops – Reverse Calendar Spreads usually profit. This strategy is called a Butterfly Spread due to how the Options Graph always looks like. Not too much money needed to trade We have assumed that Nifty is at 9090 on expiry day just below the sold option strike. 11,800.00. ), Sell 100 NIFTY FEB 2015 9100 CE @ 112 Strategy: As expected the index to move in a narrow range with a negative bias due to profit-booking, we advice traders to consider a Calendar bear-put spread on Nifty 50. As you can see some months they make good money from the sold call and some month from the put depending on the stocks’ position. This means you expect not much movement over the next few days on the stock or the index. In the above example on the 16 th June if bank nifty trade at 18000 then you enjoy the maximum profit. However my first 3 years were losses. To help you succeed I offer few months support for FREE. Neutral Calendar Spreads are trade where the trader sells current month’s options and buys next months’ options. But depending on the Volatility (repeat that again – depending on the Volatility on that day) the price of NIFTY MAR 2015 9100 CE can be: a) The same – Volatility has increased so Time value (Theta) did not have much effect on the option plus Nifty also moved up 200 points. Simple right? Bank Nifty Course Testimonials Crypto Market Cap, BTC/USD, ETH/USD, USDT/USD, XRP/USD, Bitcoin, USD/INR, EUR/USD, GBP/USD, USD/JPY, USD/CNY, DXY, Reliance, INDIABULLS HOUSING, YES BANK, STATE BK OF INDIA, HDFC BANK, TATA STEEL LTD, Nifty, BSE SENSEX, S&P 500, Nasdaq Composite, FTSE 100, DAX Index, Gold, Silver, Crude Oil, Brent Oil, Natural Gas, Bitcoin, US 10Y, Euro Bund, Germany 10Y, Japan 10Y Yield, UK 10Y, India 10Y. The current month option will expire before the next month options, and the trader can profit. 6. 11,200. Now I think you can guess why the trader sells current months options and buys next months options. b) Aligned towards positional strategy. Bull Calendar Spread: the bull calendar spread strategy can be setup by buying long term slightly out-of-the-money calls and simultaneously writing an equal number of near month calls of the same underlying security with the same strike price. Strike selection while trading Options is the most essential part to succeed. Testimonials Year 2018 30 days are remaining for expiry. I didn't use to receive credit but because the current series will expire soon i used to write comfortably. 3. Just a note on margin requirements on Calendar Spreads. For example in the above case its 55 points. For ex: Buy 8600 Nifty CE December contract and Sell 8800 Nifty CE November contract. If not please read the following paragraph to understand this better: Suppose a trader sells current month’s At The Money (ATM) options expiring in 20 days and buys next months At The Money options expiring in 50 days. 2. The calendar spread strategy in options success for the NIFTY or any index depends on the implied volatility change and underlying price change. Since Volatility affects ATM options more than any other option – they make quick profit in a few days time and get out of the trade. Bear Put spread is a moderately bearish strategy. Another factor of calendar spread strategy is you cannot estimate the maximum profit theoretically. Continue with Your Job The sold option will expire worthless. Very interesting & full of knowledge article Dilip Sir.Keep writing..!!! I would be explaining the example using Diagonal Spread with Long Calls and for this, I will use the example of NIFTY (Ticker – NIFTY) Following is the Option Chain for NIFTY We would now take 2 Call Prices from April 2018 and May 2018 For April 2018: For May 2018: It mainly profits from Theta i.e. This looks like an easy trade. PURELY FUTURES CALENDAR SPREAD THREAD. Its more of a professionals’ trade than a retailers’. Loss from March Future: 8970 -9000 = -30. Now we are using a fixed 0.60% as a stop loss to minimize risk and increase the profitability. 4. I am very confident that you will make money trading my strategies. Interestingly the above would have been true had the option Greeks remained same for the next few days and the stock remains in tight range. Calendar Spread is a slightly complex but an interesting options strategy. Or. This is the max profit zone as in the image above. Reverse Calendar Spreads behave exactly opposite of Calendar Spreads. The max profit can be attained only on the expiry day. Because you lose only if the difference is less than 55 points. Calendar spread is boring strategy wherein we are trying to exploit premium melting speed in shorter and longer expiration. from where to get the figures for interest rates ? . In this trade real Futures are NOT bought or sold. P.S: So many years of trading has thought me one thing – it is always better to make small profits month after month, rather than lose money month after month trying to make too much money. Hope I am able to help you understand that Calendar Spreads are more complex than what most of us think about. So your profits from Feb Future: 8945-8900 = 45. 15.2 – Calendar spread logic. Volatility remained the same or decreased. I did a lot of research, read books and did countless paper-trading before being profitable. To know more Call/SMS/WhatsApp me on 9051143004 or email me now. If you know about Option Greeks, you may know it is because these options have more time value (Theta) therefore they are priced higher. Testimonials Year 2019 I strictly adhere to laws of my country. With the diagonal spread, the investor has a near term outlook that is slightly more bullish or bearish. Latest performance with 25 Lot size [JULY 2020 – SEP 2020]: Difference Between Other Courses And Mine But in reality it is not the case. ... Let's take an example with Nifty. Once you finish the course you can start trading immediately. Started trading again from 2011 and never looked back since. Selling Put Options on Nifty Stocks. Hope you understand now. Can be done on Futures. Moreover stock market investments and trading are subject to market risks. What Others Charge for Courses A calendar spread is a strategy involving buying longer term options and selling equal number of shorter term options of the same underlying stock or index with the same strike price. Long Call Diagonal Spread Implementing Long Call Diagonal Spread Trading Strategy. A Long Call Calendar Spread is the combination of short call and long call option with different expiry. Yes liquidity is an issue in India, but in the US many traders sell 10-15% up/down current month’s options and buy 10-15% up/down options expiring in say next 6 months. This is because the options that are bought are costlier than the options that are sold because the bought options expire later. I am sure many of you have traded Neutral Calendar Spreads. Analysis of Long Call Calendar Spread strategy. It does not matter which side the stock moves. In fact you make more when you are wrong in the Future trade. Look at the image below. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. In India this may not be possible now but who knows what may happen in the next few years. However we will see that volatility also has a major role to play in Calendar Spreads. CALENDAR OR ANY. 1. This is known as Reverse Calendar Spread. This strategy would be called bullish diagonal spread. Testimonials Year 2018 Like Our Facebook Page And Get Instant Post Updates For Life. Analysts are suggesting a calendar spread strategy, which involves simultaneous buying or selling call or put options for the same stock or index at the same strike but of different expiry dates. You need not buy one Future and Sell another. My conservative trading course since 2014 is helping many retail traders just like you who have a job or business make consistent profits like this: What Traders Say About This Course It can be at 8500 or 9500 on that day. Butterfly Spread. On Nifty Futures the Calendar Spreads are actually traded. You’re taking advantage of accelerating time decay on the front-month (shorter-term) call as expiration approaches. Testimonials Year 2015 HENCE PLEASE VIEW FUTURES CHART IN OTHER SOFTWARES TO HAVE AN UNDERSTANDING OF THE CONCEPT) Concept: CSS is a strategy with an objective of profiting from spreads between far month futures and near month futures. Even if he sells this at break even – he makes good money. Market eyes on 13K and will most likely to consolidate at 13K. Please consult your broker for more details. Please ask your broker for more information. Now 9100 is ATM option – when the trade was done it was out of money. I used to employ this strategy in Nifty but insead of buying the current series i used to write them with buying the next series only if required. The liquidity in options are increasing every month. But that may not be true. Calendar Spreads are done when the trader thinks Volatility will increase in the near future. Note: Calendar Spreads are actually traded on points difference only on NSE as a single trade. Assuming you sold an option 200 points up in Nifty current month and bought a next month’s option same strike. Reverse Calendar Spread works exactly opposite to Calendar Spreads. Profit from Feb and Profit from March. Calculate the value of a call or put option or multi-option strategies. This course helps you learn to trade conservative option strategies for monthly income. Say on expiry day Nifty is at 8900. Or if you think it will increase you can buy the spread and sell later. They sometimes do it in both Calls and Puts – thus making it a Double Calendar Spread. They do not wait till expiry like an amateur trader looking to profit from the best possible situation on expiry day, that rarely happens. So right now you have no other option but to buy next months’ options. Remember this option has already been paid off and the trader is at zero risk to keep this till expiry. A Calendar Spread on Nifty Future is traded like this: If you think the difference will be less than 55 on FEB expiry. There is more to it. Its a bet between two persons. You learn when to trade, which strikes to sell which to buy, how much profit target you should be looking for, the best place to take stop loss and what to do after taking stop loss – means how to get that money back. the risk is here the future premium, it might increases if sentiments improve, it use to be 30 points per month, thus might become 60 points and bring loss, Moving Average Convergence Divergence (MACD). Risk is Limited (But cannot be defined or calculated before the trade is made), Reward is also Limited (This too is unknown; exact profit is known when the trade is closed), 1) Sell 1 Lot Current Month Option For a true Calendar Spread both options sold and buy should be of the same strike price. But small money accumulated month after month can become very big in only a few years. Please like & share my blog with your friends: One Of My Client Is Making Rs.25k Per Week, Difference Between Other Courses And Mine, Additional Surveillance Margin ASM By SEBI Explained, Nifty Options Trading Tips Providers Will Not Make You Money. Non directional trades are profitable 80% of the times and make 3-5% per trade (Results may vary). You can read about me here. 16.26 lakhs profit in 5 days though results may differ for all. FREE Support For Months. Now lets discuss the best possible situation.