Nifty - Weekly Option - Safe Income Strategy - 7th Aug'25 Expiry

 

Disclaimer: This analysis is for educational and informational purposes only. It is not financial advice. Trading in financial markets involves significant risk, and you should consult with a qualified financial advisor before making any investment decisions.

Step 1 -  Analyse the Option Pain chart.  If the price has moved much above the max pain, then we will look for opportunity in trading call option and if the price has moved much below the max pain, then we will look for opportunity in trading put option.

Step 2 - As of the closing of 1st Aug since price has moved much below the option pain, we will look for trading in put option as per rule in Step#1.  Select the Strike price where option pain is present.  (As at the close of 1st Aug'25, Option pain was at 24700.  So, we will consider this strike price for our Calendar Spread Strategy)

Step 3 - Buy Month end expiry of this strike price Put option and sell near weekly expiry put option of the same strike price.

Assumption for this option strategy.  Price will be attracted to the Option Pain to give maximum loss to the option buyers.

Stoploss =   Instead of stoploss, we will go for adjustment of positions

Target = Will close bought and sold options on the expiry day by 12 Noon

Adjustment =  If the option pain moves down (assuming moves to 24600, then above postions to be closed and similar position to be entered at 24600 strike price)

Return on Investment = Around 1 Lakh is required for entering this strategy for 1 Lot and the expected maximum return is 20K which results into 20% per week.