Hello guys! I hope you are doing well. As you know, I’m an options strategist, trading mostly with delta hedging strategies. From time to time, I share my strategy here on my blog. Today I’m writing this post to analyze the performance of the strategies we created in January 2023 and make a trading plan for February 2023 based on the current market conditions.
Before we jump directly to performance and trading plan, let me share why I prefer to trade with these delta hedging strategies.
Why trade with delta hedging strategies?
When I started my trading journey almost 12 years back, I started with options. I was buying options at that time. but in a few days, I came to realize that It’s not my cup of tea. So I shifted to futures and started learning chart reading.
In the next 4 years, I was at a stage where I can generate enough money to fulfill my monthly needs.
But In future trading, there is a big drawback. and that is a risk. Risk is comparatively high in futures trading. And if you want to utilize the full potential of the trend, then you have to carry your positions overnight.
But for a person like me who came from a humble background, it’s a little difficult to carry that much risk overnight. So from here, my journey starts to find a solution to my risk management.
I read a few books and articles available on the internet but I need someone who can provide me with handholding support during my live trades and can help me to make a trading plan with option strategies. Thanks to my Mentors who taught me how to use options to hedge my positions.
After that, there was no look back. The more I go deep, the more I realize that this is the trading plan I required or suits me.
Now, Why do I prefer to trade with these option strategies, especially delta hedging strategies?
As we knew that 70% of the time Market consolidates in range only. Only 30% time it gave you any trending movement. So If we create a trading plan that can help to generate a return in that 70% consolidation phase, then the 70% accuracy market itself is giving to us.
So that’s the reason I started trading with delta hedging because I don’t need movement or delta to make money, I only need theta or vega to generate my alpha.
I hope now you have understood why I started with delta hedging strategies and why I love to call myself a delta hedging option strategist.
Now let’s come to the performance of the option strategies we created in November 2022.
Performance of January and trading plan for December 2022
If you don’t know, let me tell you how I diversify my trading portfolio. 60% capital I’m deploying in delta-hedging positional strategies and the rest 40% I trade with intraday strategies. In intraday also I keep 20% for my rule-based strategies and 20% trend following setup.
So first let’s look at the performance of positional strategies:
Performance of Positional Strategies
In January 2023, we created a total of 14 strategies. Few are Monthly expiry and few are Nifty and BankNifty in weekly expiry.
Out of these 14 strategies, mostly closed in profit and we closed the November expiry with a net 3.9% monthly return.
If you want to check the complete trade list and strategies, here is the report:
I have deployed 50 lakhs as capital and generated around 2 lakh rupees in profit while keeping risk on the limited side. When I say the limited risk that means to generate a 3-4% monthly return I’m keeping a maximum of 2% of my capital on risk. Isn’t it a good return while keeping risk on the limited side? What do you say? type in the comment box.
Performance of Intraday Trading
As I have shared above, in intraday I use two trading setups. One is rule-based option strategies and the second is a trend-following setup. For rule-based I use my algo to execute trades while for trend-following I trade manually. For trend-following setup, every day at 10:00 AM I came online through zoo meetings, find trends, and execute my trades in front of my mentorship students.
Here is what we did in January Month:
For Intraday Trading I keep 50 lakh capital and generated 3.5 lakh which is more than a 6% return. Its combined performance of rule-based and intraday strategies. For every trading setup, I follow a simple rule: “Ride the winners till the end”. It helps me to increase my risk-reward ratio. Or in other words, you can that loss is less but profit is big in winning trades.
If you are the whose priority is capital protection but wanted some decent return while keeping risk on limited risk, then my Mentorship program will be the best investment for you. In the mentorship program, you will learn:
- Basics of options and pricing
- how to use Greeks and Implied Volatility
- How to read Option chain data
- basic and advanced options strategies with proper entry-exit rules and adjustments
- 5+ Rule-based Intraday strategies
- My trend-following setup with trend-catcher excel sheet
- Live Market sessions every day at 10:00 AM
So it’s one of the best Mentorship programs for you if you want to learn option trading with handholding support during the live market. So what are you waiting for? Hit the paddle and join my learning community.
Trading plan for February 2023
I hope you have witnessed that Volatility has increased in the last couple of days due to upcoming events.
High Volatility gives a good premium as credit but also brings high risk too. So It’s important that your risk management plan should be very strong for a highly volatile market.
I prefer not to keep unnecessary risk just for a few days of any event when we can trade the whole year in a stable market.
I also prefer to miss opportunities during any event because I don’t want to risk my capital just to become a superhuman who plays with a double-edged sword.
So in the first week of February, I will be less active and after the vent is over, I will initiate my strategies for monthly income. Don’t worry, we will get lots of opportunities after that. Just follow your trading plan and risk management rule.
My Trading plan for February 2023: Less active in the first week but supper active once the budget session is over. But there is always some opportunities, just keep your eyes open. If you want to learn and trade with me this budget session then keep following.
The second Plan is, will find some directional trades and will create our modified collar strategies that I’m teaching in the Mentorship program.
If you want to learn these delta-hedging strategies and trade with me in live market sessions, You must enroll in our Mentorship program.
From Monday, We are going to deploy some Monthly income strategies in the live market sessions. So coming week will be highly valuable for those who want to take their options trading to a new level.
In case if you have any queries, feel free to type in the comment box. I love to solve all your queries.
Thank you for taking out the time and read this post.
Have a profitable Trading!
DISCLAIMER: We are not a SEBI research analysts. Views and trading strategies are posted in this weekly market newsletter only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods. This information should only be used by investors and traders aware of the risk inherent in securities trading.