Friday trading was looking like a very flat kind of day when suddenly a sharp volatility spike came in. Market fell in a vertical kind of drop. From there it recovered to close with a small loss of just 11 points.

We were to set up the new trades for Sep 24 expiry.

These were the trades executed.

We are looking to get the premium of sold options ( Rs. 157.10 ) while paying for the time decay of October 29 options. A big move in either direction can hurt us but we are protected considerably by the bought options.

The trades in Bank Nifty:

Similar story here.

We have seen that the strategy has been profitable over last 12 weeks for Nifty and 8 weeks for Bank Nifty. It is another week in progress now.

The status at the end of day was like this:

We begin with small gains. Hopefully these will get better as we approach the expiry of contracts on Sep 24.

We stay with the trades.

Trade cautiously, trade profitably.

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.