No Time-Decay Weekly Options Buying Strategy

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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