NEW GUY TRADING STYLE –

How to Identify Trend Change?

 IVP filter – Between 0-25% = use calendar Spread, between 25% to 50% = Iron Fly r iron
Butter Fly, IVE above 50% =use iron Condor

 Calendar Spread = Bear expiry sell PE and Buy CE of far period if market is bullish or vice
versa. Same strike Buy & CE Put. And readjust PE sell close to Break Even. This will give
Vega, Theta positive. & Delta neutral.

 Theta = Time Decay or Time Value

 Delta = It shows how much price will move if spot price moves Range 0.01to 0.99

 ATM = DELTA value IS 0.5

 ITM = DELTA value IS 0.5 TO 1

 OTM = DELTA value IS 0 TO 0.5

 = Change in Premium Price is calculated by Change in Spot Price X Delta Value, for Example,
If Spot price Change by 200 and ATM price of 17500 CE is 100, and then Change will be 200x
0.5 =100, so Premium will go to 300. If ITM price is 250, then change in price will be by
((200x (0.5 to 1)) = say 1 = so premium price will go to 450(250+200). In case of OTM, if price
is 40, change in price will be (50 x (0to0.05) = say 0.5 = so premium price will become 150
(50+100)

 GAMA =RATE of change of Delta is Gama like in above example, we use Say

 IV = IV means how much is volatility

 WEGA = Volatility

Example of Strategy

 Current Market Price = 11 400, if I sell 11800 CE & 12100 CE Buy and on PE side if I sell 11800
PE & buy 11500 PE. Calculate how much point are you gaining?

 Entry on Tuesday. You should sell

Roll Down

11800 CE Sell @26

10600 PE sell @ 13
IF market starts moving up, PE sell cannot much with CE sell premium because of CE premium price is
high. Therefore, in such scenario, you exit PE sell and sell another PE whose premium is 70% of CE
premium.

2 Days before expiry you must exist.

STRATEGY

 Decide Market Direction and points of movement either up or down

 Based on above, calculate how much point you can gain, if market moves as per your
prediction.

 The above involves calculation movement of Theta, Delta, Vega and Gama.

 Based on above calculation make Iron Condor that gives you weekly at least 20 points.

 The above involves selling of CE & PE as well buying of CE & PE

 For example, if Current Market Price is 11400 then sell 11800 CE & buy 12100 CE and at the
same time sell 11800 PE & buy 11500 PE. Calculate how much point you are gaining.

 Entry on Tuesday. If it matches expectation.

Risk Management

 If market does not move as per prediction, then it requires you to sell more CE & PE or buy
more CE & PE to bring to your expectation.

 In the above Example, you are predicting bearish market but if market starts moving up, PE
sell cannot much with CE sell premium because of CE premium price is high. Therefore, in
such scenario, you exit PE sell and sell another PE whose premium is 70% of CE premium.

 SL 2% to 2.5%