Options Trading Analysis [08 May 2025]: NIFTY Trade Setup

Welcome to Week 3 of my Options Selling Paper Trading Series. Every Sunday, I analyze the market deeply and share my trade setups for the coming week. This series is for anyone who wants to learn professional option selling and track live market behavior step-by-step. All trades are simulated using Zerodha Kite and Neostox.

Let’s get started with this week’s detailed market analysis and strategy!

Market Outlook Analysis

1.1 Nifty Weekly Trend – Long-Term Outlook

• Current Price is above 20 EMA
• Recent candles are large-bodied bullish candles with minimal downside wicks — indicating momentum is intact.
• Even in minor pullbacks, the price has not breached significant previous weekly support levels.
• Price is well above Long Term Averages (50EMA and 200EMA) — confirming bullish strength.

📌 View: Bullish

1.2 Daily Trend – Medium-Term Outlook

• RSI = 49.95 and rising continuously since 7 April
• Current Price is above 20 EMA
• The chart shows consistent formation of higher highs and higher lows from March 2025 — a classic sign of an uptrend.
• Recent weekly candles are bullish with good body size and minor wicks on the upside, indicating strong buying interest.

📌 View: Chart shows Strong Bullish Momentum

1.3 Intraday Trend – Short-Term Outlook

• Price almost equal to 20 EMA.
• Previous week high = ₹24589
• Tight Range Formation:The last several daily candles are compressed within a narrow price band.
• Upper Wick Rejections + Lower Wick Supports: Sellers are active near highs, but buyers are defending dips — classic range-bound activity.
• Lack of Clear Higher Highs: Indicates a pause in trend rather than reversal.

📌 View: Sideways to Mild Uptrend

Final Bias for the Week: Sideways to Bullish Trend

Identify Support and Resistance Zones

🕵️‍♂️ Previous Week Levels

• 🔽 Previous Week Low: 24,198.
• 🔼 Previous Week High: 24,589.

🔴 Major Resistance Zone: Previous week high crossed three times rejections at 23850. So Now new Major Resistance Zone would be 26293.

🟢 Major Support Zones: 21776 is new support zone

📌 Final Price Zones

• 🟢 Support Zones: 21776-24198
• 🔴 Resistance Zones:24589-26293

Options Chain & OI Analysis

• ATM Strike: 24350
  • Call LTP: ₹144 (IV: 10.03%)
  • Put LTP: ₹170.25 (IV: 15.11%)
• Highest Call OI:
  • Strike: 26000
  • OI: 138158
  • LTP: ₹1.35
  • Change in OI: 61644
• Highest Put OI:
  • Strike: 24000
  • OI: 90690
  • LTP: ₹71.25
  • Change in OI: 30125
• PCR: Less than 1 → Bearish Bias

OI Shift Observations:

🔹 At-The-Money (ATM) Strike: 24350

• Call LTP: ₹144
• Put LTP: ₹170.25
• IV (Call): 10.03%
• IV (Put): 15.11%
• Interpretation: Higher Put IV

Volatility & Premium Analysis

• Implied Volatility (IV): Moderate (12.57%)
• Premiums ATM (CE & PE): at 23850 ATM – 270.00 (CE), 245.05 (PE)

Paper Trading Setup (Neostox)

Iron Condor Setup

• Sell CE: 24600 @ ₹120
• Buy CE (Hedge): 24800 @ ₹50
• Sell PE: 24100 @ ₹130
• Buy PE (Hedge): 23900 @ ₹55
• The net premium received:
  • =(120+130)-(55-50)=₹250 – ₹105=₹145
  • ₹145 × 75 = ₹10875 total premium (your max potential profit)
• Max Loss: Worst-case loss = Difference between strikes (200) – Net Premium
  • =(200−NetCredit)×75=(200−145)×75≈₹4125
• Range (Breakeven):
  • Upper Breakeven = 24,600 + ₹145 = 24745
  • Lower Breakeven = 24100 – ₹145 = 23955

Review After Expiry Day

This week, I executed a classic Iron Condor strategy with disciplined entry and stayed patient until expiry day (Thursday, 11 AM). Let’s review how the trade performed:

💰 Net Weekly Profit: ₹4,343.21

⏳ Holding Duration: Full week — exited on expiry day at 11 AM

📈 What Worked:

• Theta Decay Played Perfectly: Premiums dropped drastically on expiry morning, giving us the ideal exit opportunity.
• Wide Breakeven Range Protected Us: NIFTY stayed within our 24100–24600 zone — both short legs expired with minimal value.
• No Adjustments Required: Since price remained in range, we didn’t need to defend or shift strikes.

💡 What I Learned:

• Staying Patient Pays Off: This trade is a textbook example of how calmness and rules can outperform market noise.
• Max Losses from Hedges Are Acceptable: Buying further OTM options is a cost of insurance — even with that, profit was strong.
• Taxes Matter: ₹198 in fees still allowed decent ROI — hence trade selection should always aim for minimum ₹3,000–₹5,000 profits per setup.

This week’s Iron Condor setup gave me confidence that:

“Money truly flows from the impatient to the patient in options trading.”

By combining analysis, wide-range strategy, and emotional discipline, I closed this week with a net profit of ₹4,343.21.

Final Notes for Readers:

This article is part of my weekly option-selling series using real-time paper trading. I follow a systematic approach with clear logic and discipline. If you want to master selling options, follow (this is not a recommendation) this journey weekly and try replicating it on paper. Once confident, you can shift to real trades!

Let me know your thoughts in the comments! Share your trades or doubts below!

Follow my journey. Learn. Practice. Profit.

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