Options Trading Analysis [30 April 2025]: NIFTY Trade Setup

Welcome to Week 2 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
• Market was in a downtrend since Sept 2024 (lower highs/lows)
• But: Last week formed a strong bullish green candle breaking 4-month resistance

📌 View: Trend Reversal Confirmed → Bullish

1.2 Daily Trend – Medium-Term Outlook

• Price = ₹23,851 | 20 EMA = ₹22,976
• RSI = 62.57 and rising continuously since 7 April

📌 View: Daily shows Strong Bullish Momentum

1.3 Intraday Trend – Short-Term Outlook

• Price = ₹23,837.75 | 20 EMA = ₹23,719.34
• Price stayed above 20 EMA since 17 April
• Previous week high = ₹23,876
• Gap-down on 7 April (₹22,864 → ₹23,719) got filled with a big green candle = strong reversal confirmation

📌 View: Intraday Bullish with Continuation Signals

Final Bias for the Week: Bullish

Identify Support and Resistance Zones

🕵️‍♂️ Previous Week Levels

• 🔽 Previous Week Low: 21,763.
• 🔼 Previous Week High: 23,876

🔴 Major Resistance Zones

• 23,850 – Seen rejections on:
  • 📅 3rd Jan
  • 📅 5th Feb
  • 📅 25th Mar
• ✅ Also acted as a ceiling again on 17 Apr (last session) where price closed at 23,850 after forming a bullish engulfing candle

🧱 Strong horizontal barrier

🟢 Major Support Zones

• 22,000 – 22,100 range:
  • 📅 4th Mar: Flat base + green candle bounce
  • 📅 7th Apr: Market reversed from this zone
• No strong lower wicks, but support was visible with solid base formations

📊 Gap Observations

• The market has formed strong resistance near 23,850 (tested multiple times).
• Support around 22,000–22,100 has held well and triggered reversals.
• All recent gaps are filled, which confirms current momentum is healthy and bullish.

📌 Final Price Zones

• 🟢 Support Zones: 2200- 22100
• 🔴 Resistance Zones:23850 – 23900

Options Chain & OI Analysis

This week, we have a 10-day expiry. That gives us more time to capture premium decay. I’ve chosen strike prices between 23,300 and 24,300 — a comfortable ±500 range from current NIFTY levels. This is a safe and efficient zone for my Iron Condor paper trade.

• ATM Strike: 23,850
  • Call LTP: ₹270 (IV: 12.50%)
  • Put LTP: ₹245.05 (IV: 15.97%)
• Highest Call OI:
  • Strike: 24,100
  • OI: 21,574
  • LTP: ₹144
  • Change in OI: +85.55 🔼
• Highest Put OI:
  • Strike: 23,500
  • OI: 11,806
  • LTP: ₹126
  • Change in OI: -164.90 🔻
• PCR: Less than 1 → Bearish Bias

• Bearishness Confirmed: Low PCR and high OI in upper strikes indicate the market expects resistance around 24,100 and limited downside risk till 23,500.
• Volatility: IVs are moderate → Suitable for strategies like Iron Condor or Credit Spread.
• ATM Strike is Logical (23,850): This is where buyers/sellers are actively pricing the market right now.

OI Shift Observations:

🔹 At-The-Money (ATM) Strike: 23,850

• Call LTP: ₹270
• Put LTP: ₹245.05
• IV (Call): 12.50%
• IV (Put): 15.97%
• Interpretation: Higher Put IV → Fear on downside → Bearish Bias confirmed

🔹 Out-of-the-Money (OTM) Premiums (Iron Condor Legs)

Choose strikes 150–200 points away from ATM

🟡 Call Side:

• Sell 24,100 CE @ ₹144 (IV: ~12%)
• Buy 24,300 CE @ ₹91.85 (IV: ~11%)

Net Credit from Call Leg = ₹144 – ₹91.85 = ₹52.15

🟢 Put Side:

• Sell 23,500 PE @ ₹126 (IV: ~16%)
• Buy 23,300 PE @ ₹91.85 (IV: ~17%)

Net Credit from Put Leg = ₹126 – ₹91.85 = ₹34.15

Total Net Premium (Lot Size = 75):

• Net Premium per lot = ₹86.30
• Total Credit = ₹86.30 × 75 = ₹6,472.50

This is our maximum profit if NIFTY stays between the breakeven range until expiry.

📉 IV Outlook:

• Moderate IVs: Iron Condor is the perfect choice here.
• Bearish skew in Put IV (15.97%) vs Call IV (12.50%) → Implies downside protection is costlier.
• 📌 That supports Iron Condor with wider legs or mild Bear Call Spread bias.

Volatility & Premium Analysis

• Implied Volatility (IV): Moderate (14.24%)
• Premiums ATM (CE & PE): at 23850 ATM – 270.00 (CE), 245.05 (PE)
• Premiums OTM (Iron Condor Legs):
  • Sell 24100 CE: ₹144, Buy 24300 CE: ₹57.70
  • Sell 23500 PE: ₹1260.00, Buy 23300 PE: ₹87.40

Paper Trading Setup (Neostox)

Iron Condor Setup

• Sell CE: 24100 @ ₹144.00
• Buy CE (Hedge): 24300 @ ₹92.00
• Sell PE: 23500 @ ₹126.00
• Buy PE (Hedge): 23300 @ ₹91.85
• The net premium received:
  • =(144−92)+(126−91.85)=₹52+₹34.15=₹86.15
  • ₹86.15 × 75 = ₹6,461.25 total premium (your max potential profit)
• Max Loss: Worst-case loss = Difference between strikes (200) – Net Premium
  • =(200−NetCredit)×75=(200−86.15)×75≈₹8,538.75
• Range (Breakeven):
  • Upper Breakeven = 24,100 + ₹86.15 = 24,186.15
  • Lower Breakeven = 23,500 – ₹86.15 = 23,413.85

Review After Expiry Day

📅 Mark the Date 30 April 2025:

👉 Net Weekly Profit: ₹1,620.39 (after all taxes & charges)

🔍 What worked:

• ✅ Correct Directional View: The market remained range-bound as expected.
• ✅ Time Decay Worked: Your short 24100 CE gained massively due to theta decay — a perfect example of time working in favor of option sellers.
• ✅ Hedges Protected Risk: Though they ended in loss, the buy legs limited risk exposure as intended.

⚠️ What Could Be Better:

• ❌ Emotional Exit: You had strong conviction to hold till expiry, but exited on 25 April due to fear. In reality, the entire setup would’ve yielded more profit by expiry — classic case of emotions vs. logic.
• ❌ Over-Hedging: The additional PE spread diluted the profit potential. With a neutral view, one iron condor or one-side spread may have been cleaner.

“This trade taught me that discipline beats fear. Even though I booked out early, the strategy was on track, and theta decay was real. From next week, I’ll focus on stronger conviction to stay till expiry and let time work its magic.”

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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