Page 1

Page 2
Introduction ....................................................................................................4

Overview (Moving averages) ........................................................................5

Bias (RSI) ........................................................................................................6

Momentum (RSI).............................................................................................7

Relative RSI ..............................................................................................................7

Strength RSI .............................................................................................................8
Trend (ADX) ....................................................................................................9

Bollinger Bands ............................................................................................11

When to Buy, when to sell (Near or Far) ......................................................12

What to buy, what to sell (Calls or Puts) ......................................................13

Where to Buy, where to sell (Strike selection)..............................................14

Neutral zone ................................................................................................15

Timeframe ....................................................................................................16

At what time to initiate trade .......................................................................17

Entry .............................................................................................................18

Long entry ..............................................................................................................18

Short entry .............................................................................................................18
Exit ...............................................................................................................19

Long exit ................................................................................................................19

Short exit ................................................................................................................19
Overnight Positions (Calendar Spread) .......................................................20

RDX scoring ..................................................................................................21

Adjustments ............................................................................................................22
Role of Derivatives Data ..............................................................................23

VWAP & Max Pain .................................................................................................23

PCR & Implied Volatility ...........................................................................................24
ATM Straddle (Jodi Bhav) .......................................................................................25

Page 3
 INTRODUCTION

Application of technical analysis in trading falls into two major categories:

1. Predicting (“Predict And Panic”)

In first category, predicting and trading means one will buy at supports, at demand zones, at
Fibonacci retracement levels. One will buy when markets looks oversold. One will buy at
trendline supports etc. People who are following Elliot wave principles or neowave also fall
in this category. I will consider all above examples as predict and trade category type.

These are few examples where one will do trading based on his ability to judge the future
price reversals.

“Predict and Panic” is being mentioned here, as the outcome of the trades based on
predicting the prices are most likely to cause anxiety and panic to the traders.

2. Following (“Follow And Flourish”)

Another group of traders are formed by price followers. Here buy the strength & sell the
weakness is the mantra.

Here you are not supposed to look at trend lines, Fibonacci levels, support levels, resistance
levels, demand zones or supply zones... nothing like that..

Here the traders will Buy maximum in overbought zones and will Short maximum in
oversold zones, supported by some confirming indicators.

I belong to this second category of traders.

“Follow and Flourish” is being mentioned here, as the outcome of the trades based on
following the trend are most likely to turn in to profitable trades, offering better control in
managing the trades for the trader.

Remember both methods are good. Both methods have their own advantages and
limitations. You have to decide which trading method will suit to your personality. My
whole trading ideas discussed here are based on this basic concept: Buy the strength & Sell
the weakness.

I am following a very simple trading plan based mainly on RSI and ADX.

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 OV E RV I E W ( M OV I N G AV E R AG E S )

1Moving averages give us an overview, but we take our trading decisions are based only on
RSI & ADX, & not on moving averages. But when we get the support of the moving
averages, then that trade is likely to give better returns compared to when the averages are
not supporting the trade.

In long term averages, 150 EMA is smaller and 200 EMA is larger average.

In short term averages, 13 EMA is smaller and 21 EMA is larger average.

Now to judge Buy/Sell decisions, we need Clear signal from the averages. All signals other
than Clear signal are considered Neutral.

Clear Buy signal needs to fulfil the following criteria:

1. Closing Price should be above both the averages

2. Smaller average should be higher than the larger average

Clear Sell signal should have:

1. Closing Price below both the averages

2. Smaller average should be below the larger average

• Reliable Buy signal is identified when Clear Buy in both Short term averages and in Long
term averages exists.

• Same way Reliable Sell signal is identified when Clear Sell signal in both Short term
averages and in Long term averages exists.

• No Reliable Buy or Sell signal is identified in case there is conflict between Long &
Short term moving average signals.

1 I use 13, 21, 150 & 200 exponential moving averages on closing basis.

Page 5
 BIAS (RSI)

Now whenever we want to initiate a trade then firstly, we have to decide the BIAS for
direction. I always look only at RSI2 first to decide the direction, & for that I use the word
“BIAS”.

BIAS based on RSI is as follows:

• RSI Above 55: Long

• We can Sell Put or Buy Call, but only when RSI is above 55.

• RSI below 45: Short

• We can Sell Call or Buy Put, but only when RSI is below 45.

• RSI between 45-55: Neutral

• No directional trading zone when RSI value is between 45 and 55.

We just take overview from averages but our trading is based on RSI only.

How to identify perfectly Bullish and Bearish stocks on the basis of RSI?

For Bullish Stocks

• Daily RSI greater than Weekly RSI, and Weekly RSI greater than Monthly RSI, and all
three RSI above 55

For Bearish Stocks

• Daily RSI lesser than Weekly RSI, and Weekly RSI lesser than Monthly RSI, and all three
RSI below 45

2 I use a 14-period RSI

Page 6
 MOMENTUM (RSI)

Momentum study guides us for exposure in our Long or Short trade. Momentum based on
RSI is as follows:

RSI Momentum Score Selling Buying Hedging

above 70 Very Strong Long 4 100% +CE 100%
65-70 Strong Long 3 75% +CE 50%
60-65 Moderate Long 2 50% 0% Yes
55-60 Mild Long 1 25% 0% Yes
45-55 Neutral 0 0% 0%
40-45 Mild Short -1 25% 0% Yes
35-40 Moderate Short -2 50% 0%
30-35 Strong Short -3 75% +PE 50%*
below 30 Very Strong Short -4 100% +PE 100%*

For option writer:

• No Call writing position above RSI 65

• No Put writing position below RSI 40

*For option buyer:

• Put buying preferable to Call option buying

REL ATIVE RSI

For proper momentum entry, it is preferable to have RSI in your trading timeframe greater
than that in next higher timeframe. (for the entry part only).

Please note, one need to check RSI at closing of the day for continuation of trade and
exposure to the next day.

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For sustainable momentum, near-term (lower timeframe) strength should always be higher
than the far-term (next higher timeframe) strength. Means 15 minutes RSI (which shows
3.5 hours strength) should be higher than 60 minutes RSI (which shows two days strength),
which should be higher than daily RSI (three weeks strength). Similarly, weekly RSI (3.5
months) should be greater than monthly RSI (1.2 years). This is the basic funda of
comparing the strength between two near time frames.

We should keep only two time frames for comparison.

Suppose if we are using 15/60 minutes for comparison then whenever momentum is strong
in 60 minutes chart always try to see RSI of 15 and 60 minutes, because inspite of strong
momentum, whenever 15 minutes RSI sustains below 60 minutes RSI, we get warning of
exhaustion at higher levels and we should consider this as profit booking signal.

If you are trading positionally then when 60 minutes RSI sustains below daily RSI then
consider it as profit booking signal.

Remember that we have to consider this only when higher time frame has strong or very
strong momentum and we are searching for profit booking signals.

Comparing RSI of two different time frames for better trading results gives us the Relative
RSI score.

Relative RSI YES NO

Weekly > Monthly 1 -1
Daily> Weekly 1 -1
Hourly > Daily 1 -1

e.g. If hourly RSI higher than daily RSI, and daily RSI higher than weekly RSI, and weekly
RSI higher than monthly RSI, then this setup is strongly in favour of longs; buy the dips and
look for momentum play.

STRENGTH RSI

Strength RSI is Daily RSI Plus (Daily RSI minus Weekly RSI). With the same momentum
scoring as outlined above, strength RSI can be used to judge multi-time frame momentum,
which gives us better trading results.

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 TREND (ADX)

Now finally trend confirmation. ADX3 is very simple and effective tool to judge whether the
underlying is trending or not.

Whenever ADX is rising it gives confirmation of trend formation and when ADX crosses 25,
it suggests strong trend formation. When ADX is rising, then underlying is trending, &
when ADX is falling, underlying is not trending. Rising ADX gives support to momentum &
falling ADX leads to lacklustre momentum.

ADX gives first indication of converting sideways to trending move in the underlying when
it starts rising with either +DMI or -DMI leading it.

• Rising ADX and long bias indicates uptrend.

• Rising ADX and short bias indicates downtrend.

For using ADX, don’t consider the absolute value. Just develop the observation skill to
watch ADX. For using RSI, strictly consider absolute numerical value.

• When ADX is not rising then I prefer writing positions in both Calls and Puts (Non
directional trade).

• When ADX starts rising then sometimes (strong momentum), I buy options also in the
direction of trend (UP or DOWN).

ADX
Trend ADX DMI position
Score
Downtrend Rising ADX with short bias -1 -DMI > ADX > +DMI
No trend ADX flat or falling 0 Indecisive
Uptrend Rising ADX with long bias 1 +DMI > ADX > -DMI

3 I use a 14-period ADX, with a 14 smoothing period

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ADX should also be between the two DMI for Buying options.

If ADX is below both DMIs, this suggests range bound structure, which is suitable for Non-
directional trades.

I consider RSI and ADX as the Pulse and BP measurements of patients....

We doctors can easily manage the health of the patients with these two simple time tested
parameters.

Same way we can easily manage our trades based on these two simple time parameters of
RSI and ADX (along with DMIs).

Example:

For momentum-based trading (Futures, Option buying, Directional option writing), rising
ADX gives better results. In directional option writing with rising ADX, we can go for little
higher delta upto 0.3.

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 BOLLINGER BANDS

Bollinger bands4 have limited use. I do not use Bollinger Bands for making trading
decisions, but they have their utility.

• Bollinger bands of one hour chart can be used to decide the strike price of options for
writing. So, when we are having neutral positions, then to sell options, the strike price
should be outside the band of 1 hour chart.

• Bollinger band narrowing suggests momentum-less trading

• When band is very narrow and ADX family meeting is going on, then it is better to reduce
the option writing positions, or maintain strict stoploss for the sold options, because some
trending movement is coming

4 I use 20-period Bollinger Bands with 2 standard deviation simple moving average

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 W H E N T O B U Y, W H E N T O S E L L
(NEAR OR FAR)

Theta is used to determine which expiry to trade.

During initial part of the month (first 13 days), week (Friday to Sunday), or day (upto
11AM), there’s hardly 10% theta erosion. During the middle part, 30% theta decay occurs.

Major chunk of theta decay occurs during later part of the month (last 20 days), week
(Wednesday or Thursday), or day (after 2 PM). Option writer will not square-off his
winning trades before these periods, while an option buyer will not allow his losing options
to remain open after these periods.

Vega is useful during event days. Gamma is useful on expiry days.

For options buying:

• Far expiry* is always better than near expiry

• Monthly expiry* is better, as there is less price decay

Reverse is true for Selling.

• Buy: Rising ADX with RSI showing strong momentum (above 65 or below 35) gives
better results in options buying (or in futures trading). An option buying opportunity on
Friday (& even on Monday) must be definitely captured as there is very less theta decay.

• Sell: Option selling** is more beneficial when ADX is falling. On Wednesday & Thursday,
in a momentum setup, avoid option buying, instead go for option selling with bit higher
delta.

In non-trending states, Sell Far OTM options. In trending states, Sell and Buy both can be
done.

*Far/Monthly expiry has less liquidity

**Options Selling should always be with hedging

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 W H AT T O B U Y, W H AT T O S E L L
(CALLS OR PUTS)

• For all Bearish conditions (RSI < 45), we can Sell Calls

• Buying of Puts only when we have strong Bearish (RSI < 35) indication

• If you are selling puts for hedging against call option writing positions, then it should be
done upto score -1 or -2 (RSI 45 to 35) only.

• No put option selling for hedging when RSI is below 40.

• For all Bullish conditions (RSI > 55), we can Sell Puts

• Buying of Calls only when we have strong Bullish (RSI > 65) indication

• If you are selling calls for hedging against put option writing positions, then it should be
done upto score 1 or 2 (RSI 55 to 65) only.

• No call option selling for hedging when RSI is above 65.

ADX RSI Strategy

Rising Above 65 Sell Put & Buy Call
Rising Above 55 Sell Put
Falling Between 45-55 Non-directional option selling
Rising Below 45 Sell Call
Rising Below 35 Sell Call & Buy Put

• Always keep in mind that Put option buying gives better returns then call option buying
given similar conditions, because of increased implied volatility. Long-only players
(Pension funds, LIC) & HNI often hedge their portfolio during market sell-off by buying
Puts. So, during sell-off, there is high demand for Put options. Such a scenario is missing
in Call buying.

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 W H E R E T O B U Y, W H E R E T O S E L L
(STRIKE SELECTION)

Delta is used for selection of strike price

• Option buyer: Delta 0.5 or higher (Always Buy ITM or ATM options)

• Option seller: Delta 0.2 or less preferred (Always Sell OTM). For directional option
selling, you can select Delta upto 0.3

My first focus on selecting strike price is always the last closing price plus or minus ATM
straddle. The strike price where the difference between call and put is minimum is the ATM
straddle (Jodi Bhav). The expected range based on ATM straddle gives us the Call and Put
strikes to trade for a Short OTM Strangle.

Expected range based on ATM straddle (Jodi Bhav):

• Upper limit = closing plus straddle = Call strike selection for OTM strangle

• Lower limit = closing minus straddle = Put strike selection for OTM strangle

Generally these ranges are around 0.2 delta, so it becomes little easy for selecting strike.
This, however, is the minimum range, it’s always better to select strike as per delta (0.2 or
less).

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 NEUTRAL ZONE

Ideal characteristics of neutral zone:

• Neutral range of RSI is 45-55. But it can extend up to 40-60 range. (“Traffic Jam”)

• Price is around both the short term averages.

• ADX is falling or flat with both DMI also in close contact with ADX (“Meeting of ADX
family members”)

• (optional) Bollinger band narrowing

When we are in neutral zone, with ADX falling and RSI in neutral range, go for non
directional options writing. The maximum one can hold in neutral strategy is between 40-60
RSI. Beyond this (i.e. below 40, or above 60), it’s better to convert into directional strategy.

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 TIMEFRAME

• For Weekly expiry, we should use 15 minutes (or 30 minutes) candles from market
opening to 3 PM. But for carrying over the positions to next day, we must shift to Daily
chart after 3PM.

• BANKNIFTY is high beta, so 15 minutes chart (in combination of hourly chart) is

preferred. Conservative traders should use hourly chart (in combination of) daily chart.

• For low beta stocks and NIFTY, 30 minutes chart is preferred

• Hourly is considered father of both. In case of any confusion, take guidance from father.

• For Monthly expiry and for Stock Futures & short-term trades, Hourly chart is preferred.

• For Delivery based medium-term trades, Daily charts are to be used.

• For Long-term investments, Weekly charts are to be used.

“Please note that in 15 minutes charts, we have 25 overs game for one day and overall 125
overs test match for the entire weekly expiry period”

Details:

In one day, we can get 7 candles of 1 hour each, or 25 candles of 15 minutes each.

In Weekly expiry, with 1 hour time frame, we get only 35 candles, which are too low to
capture the movement of weekly expiry. With 15 minutes time frame, we get 125 candles in
weekly expiry enabling us to spot the trading opportunities better.

In Monthly expiry, with Daily time frame, we get around 20 or 25 candles in a month which
is too low to capture the movement. With Hourly time frame, we get around 140 candles in
a month which can easily capture all movements worth trading in the month.

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 AT WHAT TIME TO INITIATE TRADE

First trade depends on the Daily overall structure:

• Recognising ORB

• The first 15 minutes of trade is known as opening range.

• Write down High and Low of Opening Range.

• Now whenever price trades above high or below low of Opening Range then it is known
as Opening Range Breakout (ORB).

• If Daily is neutral then wait for ORB

• If Daily is clearly Bearish or clearly Bullish, then look at the first candle (15 minutes
timeframe). Take decision to trade at 9.20AM after watching first 5 minutes formation of
first 15 minutes candle. Here’s how:

• If first 15M candle after 5 minutes from market opening (i.e. around 9.20 AM) is also in
the same direction of Daily, then start trading by 09:20 AM.

• If first 15M candle after 5 minutes from market opening is in the opposite direction of
Daily, then wait for candle to get completed (by 09:30 AM) and then wait till ORB
happens.

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 ENTRY

When you are trading momentum, then start of momentum is your entry.

LON G ENTRY

• RSI breaks the range, & crosses above 55

• ADX starts rising

• Price gets out of Bollinger band range (optional)

You need to initiate trade here. We can Sell Put (or Buy delivery, Buy Future) but only when
RSI is above 55.

Then according to RSI breaking one by one levels you need to add positions as per our RSI
criteria e.g. add another lot above 60, another above 65, & another above 70

When RSI goes above 65, then apart from Selling Puts, we can Buy Calls also.

SHORT ENTRY

• RSI breaks the range, and goes below 45

• ADX starts rising

• Bollinger Band narrows (optional)

You need to initiate trade here. We can Sell Call (or Sell delivery, Sell Future) but only when
RSI is below 45.

Then according to RSI breaking the levels one by one you need to add positions as per our
RSI criteria e.g. add another lot below 40, another below 35, & another below 30.

When RSI goes below 35, then apart from Selling Calls, we can Buy Puts also.

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 EXIT

I don’t keep fixed stop loss (SL). It is always dynamic. Means I decrease my positions step by
step. Suppose I have bullish positions then I decrease positions when RSI goes below 70,
Then again decrease below 65.... like wise.5

LONG EXIT

(Long positions: Bought Calls or Sold Puts):

If +DMI is above ADX, we can continue to hold our positions. DMI+ going below ADX
suggests decreasing strength of uptrend.

• When +DMI goes below ADX line, decrease your positions (i.e. If +DMI crosses
below ADX, one third of the position has to be closed).

• When RSI goes below 70, then 65, then 60 (e.g. If the RSI value moves (from above
70) to below 70, reduce long positions by one third)

• When the price goes below 13 EMA, decrease positions further or convert into neutral
positions

SHORT EXIT

(Short positions: Sold Calls or Bought Puts):

If -DMI is above ADX, we can continue to hold our positions. DMI- going below ADX
suggests decreasing strength of down trend.

• When -DMI comes below ADX line (i.e. If -DMI crosses below ADX, one third of the
position has to be closed).

• When RSI goes above 30, then 35, then 40 (e.g. If the RSI value moves (from below
30) to above 30, reduce short positions by one third)

• When price goes above 13 EMA (i.e. If the Price moves above 13EMA, book one third
position)

We carry forward our positions only if Daily chart is fulfilling all 3 criteria.
5 Any of these three may happen first. We have to follow the market and act accordingly.

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 OVERNIGHT POSITIONS
(CALENDAR SPREAD)

Overnight positions can best be hedged with calendar spread, keeping in mind the theta
curve.

A calendar spread typically involves buying & selling the same underlying security at the
same strike price, but at different expiry dates.

• First 2 weeks of expiry can best be hedged by same monthly expiry

• Last 2 weeks of expiry can best be hedged by next monthly expiry

I enter the hedging positions at 3:25 PM, because the maximum theta effect of the whole
day will be over by that time. I close the hedging positions at 9:20 AM, because there will be
no or negligible theta effect till that time.

e.g If at today’s closing, I have sold 3 Puts at 32,200 & 1 call writing position of 32,800.
Total position is +2. Now I want to carry over. So, exactly at closing time, I’ll buy 3 Puts
32,200 in monthly expiry & I’ll buy 1 call of 32,800 in the monthly expiry. Next day
morning, first thing I close the monthly positions.

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 RDX SC ORIN G

The RDX score is determined by adding the momentum (RSI) score to the ADX score.

RSI ADX RDX

RSI value Example
Score Score Score
above 70 4 1 5 5 Puts sold (+ Call buy)
65-70 3 1 4 4 Puts sold (+ Call buy)
60-65 2 1 3 3 Puts sold
1 1 2 3 Puts sold & 1 Call sold
55-60
1 0 1 3 Puts sold & 2 Calls sold
Neutral 0 0 0 2 Puts sold (+2) & 2 calls sold (-2)
-1 0 -1 3 Calls sold & 1 Put sold
45-40
-1 -1 -2 2 Calls sold
40-35 -2 -1 -3 3 Calls sold
35-30 -3 -1 -4 4 Calls sold (+ Put buy)
below 30 -4 -1 -5 5 Calls sold (+ Put buy)

Easiest option writing is when RDX score is 0 (i.e. RSI 45-55 with falling ADX). Start with
-2PE & -2CE. Strike price will be spot rate +/- ATM straddle.

Another easy state is when RDX score is +3, +4, +5 (i.e. RSI>65). Put writing should be
as per RDX score here (3 puts sold for RDX +3, 4 puts sold for RDX +4, 5 puts sold for
RDX +5). Similar positions for call writing when RDX score is -3, -4, -5 (i.e. RSI<35).

In case of score +1 (RSI sustaining between 55-60), we have to add 1 Put. Our position
would be 3 put writing & 2 call writing.

If score is +2, then 3 Puts & 1 call.

But, if score is -2, then it should be 2 calls only. This is because implied volatility increases
when RSI is below 40, & this increases put option premium (more than the increase in call
option premium). So, below RSI 40, keeping even one lot of put writing position is risky.

Similarly, in case of score -1 (RSI sustaining between 45-40), we have to add 1 Call & close
one put. Our position would be 3 call writing & 1 put writing.

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ADJUSTMENTS

Changing your positions (i.e. number of Calls & Puts) according to RDX score is essential.

Same way, changing your strike price according to Delta is also equally important.

We have to match the RDX score & we have to match the Delta. If you cannot shift your
positions fast, then trade in the hourly chart, don’t go for 15 minutes chart.

Example

• Suppose we have 2 puts sold & 2 calls sold position, & our strike price are equidistant to
the spot rate.

• But now Banknifty RSI goes to 55-60, so the strike price will also move higher. So, the
sold call will come closer to the strike price (from an initial 0.2 Delta, it will now have a
0.3 or 0.4 Delta).

• RSI 55-60 & ADX rising, means the RDX score is 2. This means that here we need to add
1 Put. So, we would need to shift both our Calls & Puts, so that our score becomes 1, but
with changed Call & Put positions.

• We will book profit in the initial 2 Puts sold at lower strike price, & sell 3 new higher
strike Puts at 0.2 Delta. We will will close the positions, with whatever gain or loss, in the
initial 2 Calls sold, & sell 1 new higher strike Call at 0.2 Delta.

• Now, if RSI goes to 60-65, again we just need to square-off the existing call, so that we are
left with 3 Puts only.

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 R O L E O F D E R I VAT I V E S DATA

In trading 70% is technical and only 30% is derivatives. We take a hint from the derivatives.;
we don’t trade based on them. But whether we should be alert for out profit booking, or our
entries or exits, are the additional hints that we get from the derivatives data.

VWAP & MAX PAIN

In derivatives, data is derived from 2 parts: the futures part & the options part. We can
judge how the future is trading, just by looking the closing of the day in relation to the
VWAP. This tells us who was having the upper hand on that trading day. We look at the
futures closing in comparison with VWAP, not the spot closing.

The price of an underlying stock tends to gravitate towards its "maximum pain strike price" -
the price where the greatest number of options (in rupee value) will expire worthless. We
look at the spot closing in comparison with Max Pain level, not the futures closing.

• Decreasing max pain level is Bearish, and increasing max pain level is bullish

• Similarly, increasing VWAP is bullish, and decreasing VWAP is bearish

• Closing above VWAP & Max pain level is bullish, and below VWAP & Max pain level is
bearish

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PCR & IMPLIED VOL ATILIT Y

Open interest PCR means Put OI divided by Call OI. We focus on direction of PCR only, &
not on the levels.

• Rising PCR is bullish

• Falling PCR is bearish.

For weekly expiry, IV based on spot data is more reliable than that from futures data. So,
NSE (spot) IV values are preferable to the Quantsapp (futures) IV values.

IV represents the expected volatility of an index over the life of the option. IV is directly
influenced by the supply & demand of the underlying options & by the market’s expectation
of the direction. As expectations rise, or as the demand for an option increases, then IV will
rise. We focus on whose demand is more: Calls or Puts?

• If Call IV is significantly higher than Put IVs, then it is a bullish sign.

• If Put IV is significantly higher than Call IVs, then it is a bearish sign.

• Increasing PCR with increased Call IVs is indication of Strongly Bullish condition.
Increasing PCR with increased Put IVs is indication of Bearish condition

• Decreasing PCR with increased Put IVs is indication of Strongly Bearish condition.
Decreasing PCR with increased call IVs is indication of Bullish condition

• In Bullish markets Call IVs will be higher than Put IVs

• In Bearish markets, Put IVs will be higher than Call IVs.

⇧Call IV ⇧Put IV
⇧PCR Strongly Bullish Bearish
⇩PCR Bullish Strongly Bearish

Page 24
I see IVs as reflection of demand and supply. If demand is more, then IVs will be higher and
if supply is more, then IV will be lower. If demand is accompanied by increased open
interest, then it will reflect in PCR. Practically, we can focus on Call IVs minus Put IVs. If
the difference between Call & Put IV is 8-10, the one with higher IV will indicate the
direction of significant moves.

If put and call implied volatility are almost the same, this rules out big correction. If there is
impending big correction, then there should be significantly higher put IVs than call IVs.

AT M S T R A D D L E ( J O D I B H AV )

As already detailed earlier, the ATM Straddle nearest to the last closing spot price helps us
in selecting the OTM Strike price to trade.

• Upper Strike =Closing Price plus ATM Straddle

• Lower Strike =Closing Price minus ATM Straddle

Page 25
 TRADE EXAMPLE

This trade was taken on 9th October 2019 using the RDX strategy as described in above
pages.

Page 26
 I am Dr.Jignesh Shah, a practicing
gynaecologist in Ahmedabad since
1997. I have my own nursing home in
Nava Vadaj area of Ahmedabad in
name of Jigisha Nursing Home. I was
Hon. Secretary of Ahmedabad
medical association in 2012-14. I also
worked as Vice President of IMA
Gujarat in 2016.

Stock market is my passion. I am trading and investing since 1992.

I committed lots of mistakes in first 15 years of my trading, then I
started trading in systematic way from 2009.

I used to trade in futures mainly but gradually turned into options

selling. For past two years, I trade only in options writing & mainly
in Bank Nifty options. And since two years my trading
performance has been consistent. I get 3-5% returns monthly. I
have won three times Zerodha sixty days challenge back to back.

I gave NISM exam in April 2019 and passed it with 95%, then I
became sub broker with LKP securities. Now I look after around
30 trading accounts.

While planning to do some charity work in my medical field, I

realised that if I do some work in financial field then may be I can
help more families than what I can do in medical field. Then I
started sharing my trading experience on Twitter and on my
Telegram & Youtube channels.

Wish you a happy trading journey!

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