Hello folks! I hope you are safe and healthy. On our website, I’m sharing some good options strategies so that we can all make money together. Today I’m sharing a Reverse Jade Lizard Option Strategy as a monthly income option strategy at Bharti Airtel.
Why do I choose the Reverse Jade Lizard Option Strategy as a monthly income option strategy?
If you want to earn consistently in this stock market, then you must focus on your risk management. Your risk must be limited to overcome the loss due to an unexpected movement in the market.
As we both know, the market will not touch the sky tomorrow, nor will it touch the ground. It will remain in a range. It may give us one-sided movement, but it will go to a limited level. So if we can find a range and create our strategy based on that range, chances are high that we will make money.
One more thing we should keep in mind here is that the market is full of surprises. Every small or big news story can give us an unexpected movement, so we should keep our risk on the limited side. Because if anything goes wrong, our loss will be limited.
The Reverse Jade Lizard Option Strategy is an unlimited-risk option strategy that works well with range-bound activity in the stock market. It helps to make money in a range-bound activity with a bearish view. But because risk is unlimited, you must be aware of the risks associated with it. If you don't know how to manage your trade, then simply avoid this strategy.
In this article, I have shared how to deploy a Reverse Jade Lizard Option Strategy in any stock in detail. Please read the post until last to learn about the strategy and its adjustments.
In this next section, I will share how we can find the range based on the chart and open interest data for our monthly income strategy in BHARTIARTL. I will share the strategy and its adjustments. So read this post till the end to understand better. If you have any queries, questions, or suggestions, you can type them in the comment box.
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Reverse Jade Lizard Option Strategy in BHARTIARTL
Let’s look at the chart to analyze the range of BHARTIARTL for the coming expiry.
After giving a breakout from 960, we saw a sharp upside in BHARTIARTL. It made a high of 1045.95, and we saw some profit booking after. Now 1045 is acting as a strong resistance level and a breakout will trigger a long trade again.
On the downside, 960 is acting a strong support level, which was the resistance previously.
So based on the chart, we can say that 960–1045 is the range we can expect in the coming session. We may see some range-bound activity until we are not getting any breakouts or breakdowns from this range.
For more confirmation, we should analyze the December month expiry data too.
Open Interest analysis for BHARTIARTL
Based on the open interest data, we can see that 950 PE and 1020 CE act as immediate support and resistance, respectively. The second resistance is at 1050. This indicates that these levels are important for the coming sessions.
This is confirmed with open interest: 950–1050 can be the range in BHARTIARTL for the coming sessions. So, we can use this range to make a monthly income option strategy, i.e., the Reverse Jade Lizard Option Strategy.
Monthly Income Option strategy in BHARTIARTL
Possible adjustments for the Reverse Jade Lizard Option Strategy
You can make these adjustments:
First, you can follow the breakeven (1041) as a stop-loss, which means you can close your strategy after a breakout from this level. or If the loss is more than ₹10,000, close this strategy.
Before you deploy this strategy, one thing you should keep in mind:
This strategy is an unlimited-risk strategy, and you can't wait to hit the breakeven point to close the strategy. So I suggest that you should decide a level that you should keep on radar to make the adjustments.
This level must be below the breakeven, i.e., 1041.
I decide 1020. Means, If I find that BhartiARTL is breaching 1020, I will initiate the below adjustments:
- Buy a 1040 CE to protect against the upside risk.
- Book profit at 990 PE and shift it to higher levels.
There are some more adjustments we can initiate that we teach in our Option Strategies: A Mentorship Program
If you want to learn these monthly income option strategies with proper adjustments, you can enroll in our Option Strategies: A Mentorship program.
I hope my articles are helping to trade with these options and strategies. Which strategy are you using to generate your pay check? Do let me know in the comment box.
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Disclaimer: We are not a SEBI research analysts. Views and the iron condor strategy posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this article or its contents. This product is not a recommendation to buy or sell, but rather a guideline for strategy are interpreting specifies analysis methods. This information should only be used by investors and traders who are aware of the risk inherent in securities trading.