Welcome to the ultimate guide on the “No Time-Decay Weekly Options Buying Strategy” 🎯, a game-changing approach to trade like a pro! This strategy minimizes time decay while maximizing profits through weekly Nifty options. Whether you’re a newbie 🌱 or a seasoned trader 💼, this guide is loaded with actionable insights, live trade examples, and backtesting results to prove its power! 💥

How It Works: Step-by-Step 🛠️

This strategy combines selling At-The-Money (ATM) options with buying Out-of-The-Money (OTM) options, with dynamic adjustments to keep losses low. Let’s break it down:

Step 1: Selling ATM Options 💰

  • ✅What You Do: Sell one lot each of an ATM call and an ATM put at the same strike price.
  • 🔍Why It Works: ATM options have the highest extrinsic value due to their closeness to the market price, generating instant premium income—your profit foundation! 💸
  • 📊Example: If Nifty trades at 24,400, sell one lot of 24,400 Call and one lot of 24,400 Put.

Step 2: Buying OTM Options for Protection 🛡️

  • ✅What You Do: Buy two lots each of OTM calls and puts, 200 points away from the ATM strike:
    • OTM Calls: 200 points above ATM strike.
    • OTM Puts: 200 points below ATM strike.
  • 🔍Why It Works: OTM options act as a hedge, shielding you from big losses if the market swings sharply. Double lots boost protection while keeping costs low. 🤑
  • 📊Example: For an ATM strike of 24,400:
    • Buy two lots of 24,650 Calls (24,400 + 200).
    • Buy two lots of 24,050 Puts (24,400 – 200).

Live Trade Example 🎬

Let’s dive into a real-time trade setup to see the strategy in action! 🌟

Trade Setup ⚙️

  • 🎯ATM Strike: 24,400
  • 💸Sold Options:
    • 24,400 Call: Sell 1 lot
    • 24,400 Put: Sell 1 lot
  • 🛡️Bought Options:
    • 24,650 Call: Buy 2 lots (24,400 + 200)
    • 24,050 Put: Buy 2 lots (24,400 – 200)

Probability of Profit (POP) Analysis 📈

  • 📊Call Side (72% POP): High probability means Nifty is unlikely to exceed 24,650 by expiration, favoring the sold call’s decay.
  • 📊Put Side (62% POP): Moderate chance of a drop below 24,050, but double lots ensure protection.

Backtesting Results 📅

Six weeks of backtesting show the strategy’s consistency across market conditions. Here’s the breakdown:

1st Week Backtest 📊

  • 🎯ATM Strike: 23,300
  • 💸Sold Options:
    • 23,300 Call: Sell 1 lot
    • 23,300 Put: Sell 1 lot
  • 🛡️Bought Options:
    • 23,550 Call: Buy 2 lots (23,300 + 200)
    • 23,000 Put: Buy 2 lots (23,300 – 200)
  • 💰Results:
    • Call Side Profit: ₹35,696.25
    • Put Side Profit: ₹1,451.25
  • 🔍Analysis: Stellar week with strong profits, likely due to favorable volatility and a market close to the ATM strike. 🌟

2nd Week Backtest 📊

  • 🎯ATM Strike: 22,750
  • 💸Sold Options:
    • 22,750 Call: Sell 1 lot
    • 22,750 Put: Sell 1 lot
  • 🛡️Bought Options:
    • 23,050 Call: Buy 2 lots (22,750 + 200)
    • 22,400 Put: Buy 2 lots (22,750 – 200)
  • 💰Results:
    • Call Side Loss: ₹-1,762.50
    • Put Side Profit: ₹333.75
  • 🔍Analysis: Small call-side loss due to an upward move, but put-side profit kept the trade viable. Adjustments could help! 🔧

3rd Week Backtest 📊

  • 🎯ATM Strike: 23,100
  • 💸Sold Options:
    • 23,100 Call: Sell 1 lot
    • 23,100 Put: Sell 1 lot
  • 🛡️Bought Options:
    • 23,300 Call: Buy 2 lots (23,100 + 200)
    • 22,850 Put: Buy 2 lots (23,100 – 200)
  • 💰Results:
    • Call Side Profit: ₹1,151.25
    • Put Side Profit: ₹20,943.75
  • 🔍Analysis: Blockbuster week, with the put side shining due to a sharp downward move! 🚀

4th Week Backtest 📊

  • 🎯ATM Strike: 23,550
  • 💸Sold Options:
    • 23,550 Call: Sell 1 lot
    • 23,550 Put: Sell 1 lot
  • 🛡️Bought Options:
    • 23,750 Call: Buy 2 lots (23,550 + 200)
    • 23,350 Put: Buy 2 lots (23,550 – 200)
  • 💰Results:
    • Call Side Profit: ₹405
    • Put Side Loss: ₹5,066.25
  • 🔍Analysis: Mixed results; modest call-side gain but a put-side loss highlights the need for timely adjustments. ⚖️

5th Week Backtest 📊

  • 🎯ATM Strike: 23,200
  • 💸Sold Options:
    • 23,200 Call: Sell 1 lot
    • 23,200 Put: Sell 1 lot
  • 🛡️Bought Options:
    • 23,400 Call: Buy 2 lots (23,200 + 200)
    • 23,000 Put: Buy 2 lots (23,200 – 200)
  • 💰Results:
    • Call Side Profit: ₹11,088.75
    • Put Side Profit: ₹1,256.25
  • 🔍Analysis: Solid week with the call side leading, likely due to an upward trend hedged effectively by OTM calls. 📈

6th Week Backtest 📊

  • 🎯ATM Strike: 22,550
  • 💸Sold Options:
    • 22,550 Call: Sell 1 lot
    • 22,550 Put: Sell 1 lot
  • 🛡️Bought Options:
    • 22,750 Call: Buy 2 lots (22,550 + 200)
    • 22,350 Put: Buy 2 lots (22,550 – 200)
  • 💰Results:
    • Call Side Profit: ₹12,450
    • Put Side Profit: ₹1,496.25
  • 🔍Analysis: Consistent profits across both sides, showcasing the strategy’s strength in balanced markets. 🌟

Why It Works: Beating Time Decay ⏰

By offsetting the theta of sold ATM options with the lower theta of bought OTM options, time decay becomes a non-issue. If the market revisits your entry point, losses are minimal, preserving your capital. 💪

Risks and Tips ⚠️

Trading isn’t risk-free! Success hinges on proper execution and timely profit-taking. Practice on a paper trading platform 📝, watch the full video for a detailed walkthrough 🎥, and tailor the strategy to your style and goals! 🚀

No Time-Decay Weekly Options Buying Strategy Video

🚫 DISCLAIMER
This video is for educational purposes only and does not constitute any financial or investment advice.

I am not a SEBI-registered investment advisor. All views shared in this video are for learning and informational purposes only.

Trading in the stock market, especially options trading, involves high risk and may lead to loss of capital. Past performance is not indicative of future results.

Please do your own research and consult a SEBI-registered financial advisor before making any investment or trading decision.

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