Hello everyone! I hope everything is going well for you. As you are aware, I am an options strategist who primarily trades delta hedging strategies. On my blog, I occasionally share my strategy.
Today, I'm writing to analyze the performance of the strategies we developed in August 2023 and to develop a trading strategy for September 2023 based on current market conditions.
Before we get into the performance and trading strategy, let me explain why I prefer to trade with delta hedging strategies.
Why trade with delta hedging strategies?
When I first started trading options, it was almost 12 years ago. At the time, I was buying options. But after a few weeks, I realized it wasn't my cup of tea. So I switched to futures and began studying chart reading.
Within the next four years, I would be able to generate enough money to cover my monthly expenses.
However, there is a significant disadvantage in futures trading. That is a "RISK". Futures trading carries a high level of risk. And if you want to take advantage of the trend's full potential, you must carry your positions overnight.
But it's difficult for someone like me, who comes from a low-income family, to take that much risk overnight. So my journey to find a solution to my risk management begins here.
I've read a few books and articles on the internet, but I need someone to hold my hand during live trades and assist me in developing a trading strategy using option strategies. Thank you to my Mentors for teaching me how to hedge my positions with options.
There was no turning back after that. The deeper I go, the more I realize that this is the trading strategy that I needed or that suits me.
Why do I prefer to trade with option strategies, particularly delta hedging strategies?
As we all know, the market only consolidates in a range 70% of the time. Only 30% of the time did it provide you with any trending movement. So, if we develop a trading strategy that can assist in generating a return during the 70% consolidation phase, the 70% accuracy market will provide us with.
That's why I started trading with delta hedging: I don't need movement or delta to make money; all I need is theta or vega to generate alpha.
I hope you now understand why I began with delta hedging strategies and why I like to refer to myself as a delta hedging option strategist.
Now let’s come to the performance of the option strategies we created in August 2023.
Performance of November and trading plan for August 2023
In August 2023, I created a total of 14 strategies. Few are Monthly expiry and few are Nifty and BankNifty in weekly expiry.
Out of these 15 strategies, mostly closed in profit except the last 2 weeks' weekly expiry strategies. and we closed the August expiry with Around 3.5% monthly return.
If you want to check the complete trade list and strategies, here is the pdf report:
I have deployed 50 lakh as capital and generated 1.70 lakh rupees profit. Isn’t it a good return while keeping risk on the limited side? What do you say? type in the comment box.
Trading plan for September 2023
The market is currently trading at a high level of volatility, and when volatility is high, we receive a good premium, but risk also rises.
But if you knew how to trade with volatility and which strategy works well, you don’t need to bother about anything else.
Always remember one thing: The market always gave your unexpected shocks or movement, but you have to learn how to trade all types of markets.
You can’t say that "I only trade in high volatility" or "I only trade in low volatility". This is just an excuse, nothing else. You never know what is going to happen. Rather than waiting for the right market movement, learn how to trade and handle all types of markets.
My Trading plan for September 2023: Because volatility is high I prefer to trade credit spreads with a little wider range. Like we did in BankNifty fast 2 weeks in August. If Volatility increases, we can increase the range. And with decrease in volatility, we can get benifit from theta and vega both.
The second Plan is, I 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.