It was only two days ago that I had posted here about trading the Budget Volatility.

Union Budget is still to come out but suddenly there was a drop in the Volatility yesterday. Reasons — I really do not know. And do not care.  It is not for a trader to look for the why?

Trader is to live with the How and What. What to do in any situation and how to get a profit out of the trade.

This happened yesterday.

NIFTY lost 80 points. But due to reduction in VIX ( India Volatility Index) , PUT premiums did not gain at all.

PUTS for 11000, 10900 and 10800 in fact lost money.

The earlier post was about Selling OTM PUTS and CALLS ( 2 Lots ) and Buying 1 Lot of ITM PUTS and CALLS.

Let us see how it performed.


Our trade was Buy 11000 Call at Rs. 235 and Sell 11100 and 11400 Calls at 182 and 70 respectively.

Yesterday Close Prices were 231.80, 156.10 and 47.75 respectively.

This is a gain of Rs. 26.95.

Not bad for 2 days gain.


The trade was to Buy 11100 PUT at 221 and Sell 11000 and 10700 PUTS at 178 and 86 respectively.

Close prices yesterday were 186.65, 142.55 and 60 respectively.

A gain of Rs. 27.10.

Total from PUTS and CALLS comes to Rs. 54.05

What to do ?:

As we discussed in the earlier post, the maximum possible gain is limited to Rs. 162 and there is a probability of slight loss also if there is a big move in one direction, this is a golden opportunity to exit with a good small profit.

The strategy would work otherwise also but why look a gift horse into the mouth.

In such situation booking a quick profit is the right option.

Disclaimer:  The data is from NSE website as of January 25, 2018 and January 30, 2018.This example is an explanation of strategy for safe trade in uncertain market and should not be taken as investment/ trading advice to trade in Futures and Options . Seek advice from certified professional advisers before taking investment/trading decisions.