Options Trading Analysis [22 May 2025]: NIFTY Trade Setup
1. Market Outlook (Trend Bias)
- Weekly: Price is above 20 EMA, forming Higher Highs → ✅ Bullish
- Daily: Price > EMA (24300) and RSI at 65 → ✅ Bullish
- Intraday: Price above EMA (24900), RSI 64 → ✅ Stable-to-Bullish
- 📌 Final Bias: Moderate Bullish with range-bound tendencies
2. Support & Resistance Zones
- Support: 24,900
- Resistance: 25,130
- ATM Strike: 25,050 → Market likely to consolidate in a tight band between support and resistance
3. Option Chain & OI
- Highest Call OI: 26,000 CE (1,74,543) → Strong Resistance
- Highest Put OI: 25,000 PE (1,55,483) → Strong Support
- OI Buildup: Highest addition seen at 25,000 strike (both CE & PE) → Market is clustering around this level
- 📌 Conclusion: Option writers expect market to stay around 25,000 until expiry
4. Volatility & Premiums
- IVs are moderate: ATM CE (18.35%), PE (18.38%)
- Premiums are decent:
- CE 25000 @ ₹164
- PE 25000 @ ₹168
- 📌 Interpretation: Premiums support Iron Condor or Credit Spread
Suggested Strategy: Iron Condor
| Leg | Strike | Action | Premium (₹) |
|---|---|---|---|
| CE | 25,300 | Sell | ₹87.00 |
| CE | 25,500 | Buy | ₹49.00 |
| PE | 24,800 | Sell | ₹94.00 |
| PE | 24,600 | Buy | ₹58.00 |
Review After Expiry Day
| Instrument | Action | Entry | Exit | Net P/L |
|---|---|---|---|---|
| 25,300 CE | Sell | ₹67.15 | ₹0.90 | ₹+9,883.90 |
| 25,500 CE (Hedge) | Buy | ₹32.15 | ₹0.75 | ₹–4,760.32 |
| 24,800 PE | Sell | ₹75.50 | ₹272.50 | ₹–29,648.84 |
| 24,600 PE (Hedge) | Buy | ₹38.95 | ₹81.20 | ₹+6,273.38 |
Overall Net Profit/Loss
| Description | Amount (₹) |
|---|---|
| Total Profit | ₹9,883.90 + ₹6,273.38 = ₹16,157.28 |
| Total Loss | ₹29,648.84 + ₹4,760.32 = ₹34,409.16 |
| Net P/L | ₹–18,251.88 |
| Capital Used (Margin) | ₹~4.83 Lakhs |
| Return on Capital | –3.78% Loss |
Key Takeaways
- ❌ Put side was badly hit: 24,800 PE moved deep ITM and premium shot up.
- ✅ Call side went worthless: 25,300 CE and 25,500 CE went to nearly zero.
- 🔁 Hedges softened the blow, but core put short caused the major drawdown.
- 📉 Market likely broke below lower breakeven (24,800), and continued falling.
⚠️ What Went Wrong?
- 🔻 Big drop in market: NIFTY might have broken support post-midweek.
- 🤹♂️ Adjustment not done mid-week: The position was left unchanged even after breaching breakeven — this resulted in max pain.
- 🧯 Theta couldn’t help enough: Since put moved ITM early, time decay couldn’t rescue it.
✅ What I Learned
- Watch price action around breakevens closely.
- Be ready to adjust spreads if price breaks below/above range.
- When PCR < 1 and IV is rising, protect put side more cautiously.
- It’s okay to exit early when legs go deep ITM and stop-loss is triggered.
- Never enter trades just to stay active. Trade only when your analysis is strong and clear.
- Weekend analysis is non-negotiable. It aligns my strategy, mindset, and logic.
- Blind holding is not patience — it’s neglect. Real patience is informed and adaptive.
- A rushed trade is worse than no trade at all.
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