Expiry Day Ratio Spread Strategy

Strategy Parameters Details

Entry Criteria and setup rules-:

Entry Time: Enter when the market is stable and moving violently. Generally, enter from 09:25 AM.

Setup2:  CALL side entry setup ( Mostly Preferred, because put side market falling risk very high)

LONG  1 lot ATM Straddle. Note down the price of each leg ‘s premiums. Now divide each leg premium by 5 . The quests will be your selling legs. Let say CE@140 & PE@125)

 Means –

(i)  BUY 1 lot ATM say CE= 140 

(ii) SELL 5 lots OTM CE Strike = CE/5= 140/5 =28

(iii) for margin benefit Buy 4 lot OTM strike say 2-3 rupees strike. But have add this to selling leg premiums so that RPOI not reduce. i.e. our selling legs will be then : CE= 28+3 = 31 

1. Exit criteria: 1% loss  in MTM , simply exit from full trade. 

Adjustments:

1. Always keep an eye on this strategy. Regular watch the strategy
2. 1. Exit criteria: 1% loss  in MTM , simply exit from full trade. When the selling leg premium becomes half of the entry price, we will shift this leg to almost equal entry price strike. Keep in mind that we will not cross our buy leg.

      Setup2:  CALL side entry setup ( Mostly Preferred, because put side market falling risk very high)

      LONG  1 lot ATM Straddle. Note down the price of each leg ‘s premiums. Now divide each leg premium by 5 . The quests will be your selling legs. Let say CE@140 & PE@125)

       Means –

      (i)  BUY 1 lot ATM say CE= 140 

      (ii) SELL 5 lots OTM CE Strike = CE/5= 140/5 =28

      (iii) for margin benefit Buy 4 lot OTM strike say 2-3 rupees strike. But have add this to selling leg premiums so that RPOI not reduce. i.e. our selling legs will be then : CE= 28+3 = 31 

   Adjustments:

   1. Always keep an eye on this strategy. Regular watch the strategy
   2. When the selling leg premium becomes half of the entry price, we will shift this leg to almost equal entry price strike. Keep in mind that we will not cross our buy leg.

In this strategy we enter into three short straddles at different time each day with  stop loss as mentioned below in each leg 

• • Buy both CE & PE legs hedges of  Rs 5-10 just before entering each short straddle legs
  • When SL of one leg hits Exit that leg.
  • Move the SL of the other leg to Cost.
  • No re-entry.
  • Max MTM Loss on diffrent trading days as mentioned below.
  • Universal exit at 03:05 PM