This blog has recently attracted new readers via Twitter and Telegram.
Money In The Bank strategy is what bought most new readers here.
We are also showing the performance of another similar strategy — NOT SO LAZY — in these pages regularly but it has not matched the popularity of MIB.
Well, whatever is giving good results presently will draw more attention. That is normal.
But we know trading journey is not a sprint, it is a marathon.
We need endurance along with the ability to find good trades.
That is why we need alternate strategies. At times, we may see lower returns but over a longer period, results will work out equally well.
NOT SO LAZY is that other strategy.
We sell 2-3% OTM PUT options in the top 10 stocks of NIFTY index. At times, we go for No. 11 instead of No. 10 if that stock happens to be a banking stock.
We buy about 4% OTM NIFTY PUT to hedge the above sold PUTS.
That completes the setup.
Basic principle — Good portfolio of stocks outperforms the index most of the time.
Next principle — Good stocks move higher over a period of time.
At certain points of time, these principles will not hold true.
That is when we make a loss and take a loss.
Everything else is similar to Money In The Bank about which so much has been written.
History on this blog:
The series began as a part of another series — The Lazy trader.
A performance review was done and posted on March 21, 2021.
After March 2021, the setup was discontinued for April and May but resumed in June 2021.
The results so far:
The consistency can be seen from the fact that 8 out of 10 months have given a profit.
With a margin requirement of about Rs. 15.00 lakhs, the profit is 21.46% over the 10 month period.
Not spectacular but consistent.
The July series too looks headed for a good profit. Position of trades yesterday:
It is not yet the time to draw any conclusions.
We have seen that the rise in NIFTY since March 2020 has been mainly due to the other 40 stocks than the top 10.
Sooner or later, this anomaly will get corrected and we shall see results similar to Money In The Bank.
All we need is — PATIENCE.
Staying lazy works.
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.