In my book — PROFIT FROM NIFTY OPTIONS — ART OF DOING NOTHING — I have brought out the fact that one can make money over a longer time period just by buying about 5% ITM CALL every month and do nothing after that.
You can buy the book here by clicking on the image:
Doing nothing part is important but that is where traders fail. They want to do something all the time. Result of that something is known to all of us. Most traders are losers even when simple ways of making a profit are clear.
Having accepted the fact that it is very difficult to DO NOTHING, let us plan to do something which should work.
Let us take advantage of the reduced margins for trading SPREADS.
Trade for this week:
The trade shall be set up on Thursdays and closed on Thursdays or in case of a holiday on the weekly expiry day.
We buy NIFTY 15000 CALL AUG 26 and SELL NIFTY 15700 CALL JULY 29.
If the market opens higher, we change the selling strike to 15800.
The aim is to get the time premium from the sold CALLS.
The bought ITM call will not have too much time value and will not lose value unless there is a big down move.
We shall do it for a month and see how it works out.
Disclaimer: This post and examples are for teaching purpose only and are not meant as advice/suggestion to trade in these stocks. Trading in Futures and Options can lead to big losses and should be done with appropriate knowledge and advice only. Mentioning the stocks here does not imply that I have a trading position or likely to take a trade in these stocks.