Revealing my WORKSHOP STRATEGY For FREE - The Best Strategy for Low VIX Market!

hi this is PR Sunder welcome to this special episode where I'm going to talk about some strategy in options the first thing last week there was a big news what is the big news the India weeks fell to the lowest point since 2011 so which is about 12 year low as an option seller so one has to keep monitoring the weeks India weeks is called the fear index so when the vix goes higher and higher the option premium tend to be higher the markets tend to make a violent move to give you an example in 2008 Lehman Brother collapse time are 2020 coronavirus time the indiabix went up to 85 to 90. and remember usually it should be trading around below 30. above 30 is considered to be very very bad markets will be very very volatile and 15 to 30 is considered to be moderate but anything below 15 is considered to be low weeks and usually in a bull market the weeks tend to be low and that's what you are seeing when the weeks is low the markets kept moving higher but however that is not true always sometimes you know opposite can happen number one number two you know suddenly when the low wakes turns to higher weeks when the mix is low the premium should be low the first let me explain how the vix is calculated the vix is how it is calculated it's a very big formula even as a mathematics teacher I also don't understand so big formula forget about it we will keep things very simple India weeks is calculated based on one month option prices whatever options that is expiring within one month includes the weekly expiry bi-weekly expert everything put together if the mix is very very low that means the option premiums are very very low when the mix is very high the options premiums will be very high so what happens option seller when you sell the options when the Wix is low you get only lower premium suddenly for one or the other reason and the vix shoots up then the premiums will shoot up so that will go against the option seller so option seller time Decay is always in his favor but price can go against him and volatility index can also go against him that is why for option sellers have to be very very careful and if the two high weeks is also not good and two low weeks is also not good the week should be a moderate back in the low vix environment what one can do the question number one Lovix what one can do number two sometimes you know people experts are the so-called experts like me uh you know sometimes we come and say our 19 000 is a good support 20 000 is the resistance markets are this month is likely to trade between 19 and 20 000 then you know many people ask one question they said what is the use of all these things if I buy when the market is at 19 800 if it is coming to 19500 already I'm going to lose 300 rupees then what is the point of saying Market will take support around 19 000 Market will take resistance around twenty thousand so what is the use of all these things now I am going to show you how you can use and of course experts say you know the so-called experts may be right or maybe wrong they have every right to be wrong so you know I'm just running a YouTube channel so therefore I have to say something of course I'm not trying to cheat anybody but I'm just giving my views my view can always go wrong I'm not the God say for example last month if you can remember while the Nifty was moving higher you know 18 900 was a stiff resistance and it crossed 18 900 few times then fell a markets moved violently between 18650 18 900 then you know one breakout happened Nifty crossed 18900 then came to 19 300 and 400 then 19500 became a good resistance many times nineteen thousand five hundred was hit then Market fell then again one day it broke out then jumped to twenty thousand at that time you know and sometimes a few weeks before I've been telling you know in the month of July right that 18 900 is a very very good support because a last time resistance became a good support or even I said you know because markets are very bullish I said 19 000 put I've been saying this month nineteen thousand to twenty thousand is a range for this month how we can capture very simple you know I felt 19 000 to 20 000 is the range but assuming that you also felt like that what most people would have done they would have sold 19 000 put option and 20 000 call option but what happened Nifty exactly traded between nineteen thousand and twenty thousand but what happened last Thursday Nifty went very close to twenty thousand that time the twenty thousand call Action News sold if you have sold it for 100 rupees that would have gone to 300 400 rupees whereas nineteen thousand put option if you have sold for 100 rupees that would have come to 40 50 rupees short strangle is a simple strategy most of the people follow they sell call option at the resistance they sell put option at that support and then what happens when the market move violently either up or down assume that the markets move violently on the upside now the probability of Market moving higher is very high because it's a bull market the loss in the call option will be much higher than the profit in the the put option so this is where the people get trapped in panic they book the last at twenty thousand call then Market will reverse will come back to 1905 and then you know you will get the fear on the downside and you'll book The Last and the downside also therefore you know combining these two one vix is very low how to create strategy number two there's a problem in short strangle so what you need to do because the Wix is very very low any time the Wix can shoot up so the premiums can shoot up so that also you have to keep in mind so a simple thing whenever you create a strategy make sure there is some buy option also there is some sell option also why when the wick shoots up your cell option will also increase but at the same time the buy option will also increase so you will get some kind of a cushion so number one no because the Wix is very low so it's not a good idea to be a pure seller you have some buy option and also some sell option so that's one thing right and second thing the problem in short strangle as I told you the resistance is twenty thousand but it will go and touch the twenty thousand and it will scare all the sellers of call option then it will come down few days before precisely look here so this one on 10th of July night nine o'clock so one of my friends met me and he asked me but today if you had to take of course I'm not trading in Indian markets I'm trading only in US markets but he asked me sir if you were to take a position today what position you would have taken okay so whatever I explained to you the same thing I explained to him but I said you know Bix is very low so I'm going to buy as well as sell some options and number two you know uh I strongly believe 19 000 is a support or to be precise 18 900 was a very very strong support eighteen thousand nine hundred is a very very strong support and uh twenty thousand is a very good resistance what I suggested him I put it in this software and first thing is a market is bullish and I have told you already for three months continuously Market moved higher fourth month also Market moving higher so that means you know the probability of Market moving higher is very very high I told him I would have bought two lots of 18900 call option again I repeat I am not trading in Indian market I am trading only the U.S market so this one is given to him for an educational purpose so I would have that's why I'm using the word I'm I wouldn't I would have bought 18900 a call option two lots but that time it was trading around 734 rupees but we will buy by paying so much money in case Market comes down you know that 734 can go to zero so that can lead to a loss of about 40 000 per lot no that's not an idea and I am not an option buyer after buying a 18900 call option for two lots 734 that means I would have paid about 1500 rupees but selling 7 lots of 20 000 call option at 118 rupees and then selling five lots of put option selling at 142 rupees so what would have happened I would have collected a small premium if you look at here this resulted in a small credit of 3500 rupees okay number one let me come to the logic nineteen thousand are precisely 18 900 is the support Market is not likely to go below that therefore I bought 18 900 call and sold nineteen thousand foot because I sold a 19 000 foot for 142 rupees so my lower Break Even will be below 18 850 that's well below 18 900 which is a very very strong support and 20 000 call option I sold that's because 20 000 is their resistance and because the volatility index is very low I combine both buying and selling and also I tell you a one excellent thing when you are selling 20 000 call sell eighteen thousand nine hundred called by what these people call this as a call ratio many people do call ratio and when the markets are bullish people do put ratio and the market is bearish but here you see what I'm doing if I buy two lots and if I sell seven lots for two lots buy and two Lots sell the margin benefit will be given so there is extra file lot cell is this a cell because I have a five naked cell call option when I sell five put options okay the margin benefit will be kicking in so if you know very well if I sell one call option when I sell one put option my span margin will be zero I need to pay only exposure margin therefore you can see here two lots by seven lot cell so the difference is five so that five Lots I sold put option I am not going by the textbook definition of called ratio and put ratio so I am maximizing I am optimizing my margin money okay again I repeat I have not taken this this one my friend asked me you can see the time is not during the market hours after the market hours he met in the night time so I just told him I would have done this that way so Optimum utilization of margin money is very very important in any business Optimum utilization of capital is very important you can see the margin is roughly about 5.7 lakh rupees and this one was done on 10th of July this video is being shot on 26th of July just about 15 days you know 15 days must have about 10 11 trading session you can see the profit is as of today is 20 000 rupees so which is about 3.5 percent of the capital deployed so 3.5 percent written in just in a matter of two weeks is really very very good and moreover here the thing is I'm selling call at resistance selling put at the support and then at the same time I also have some buy option now we are talking on 26th today but imagine last Thursday what would have happened the 20 000 call it should have shorter like 300 400 and still I can wait that is because when the 20 000 call option is going my 18900 by call option will will also shoot up if you can see as of today till the 20 000 call option there is a loss of about 32 000 rupees assume that I've done only the strangle so the call I would have lost 32 000 rupees put I would have gained only 25 000 rupees so I would have still made 7000 rupees loss that is as of today as of last Thursday when the market went to 20 000 this loss would have been fifteen thousand twenty thousand also but because I bought some option so that has given a lot of question right now the loss is 32 000 but about 28 000 profit in the buy option so that has given a question so I am sitting with a net loss of only four thousand rupees because the put side 25 000 is the profit I am still sitting with a 20 000 rupees profit also you can look at the payoff chart you know my lower Break Even is eighteen thousand nine sixty two that is about eighteen thousand nine hundred which is a very good support my resistance is twenty thousand four fifty also although twenty thousand is a resistance my upper breakage twenty thousand four fifty because I have some buy option to conclude two things number one if any expert come and tell you uh nineteen thousand is the support twenty thousand is the resistance if you want to capture you can create some strategies like this number two as long as the Wix is very very low don't do only neck adoption selling always have some buy and some sell so this is one of the strategies I used to discuss in my workshop so the in this video I decided to give it free for all of you so hope you enjoyed watching this video thank you for watching [Music] [Music]

Channel: P R Sundar

Views: 154,642

Keywords: will market crash, will nifty crash tomorrow, bank nifty prediction, bank nifty tomorrow, post market report, pr sundar post market report, market news, market news english, market report india, will nifty go down, will nifty go down tomorrow, indian stock market prediction, trend reversal, market trend, market trend analysis, nse, markets in Jun 2022, market bubble

Id: b6ZUjR_achc

Length: 14min 58sec (898 seconds)

Published: Sat Jul 29 2023