Particulars M1

1 When to Deploy About 10th of month(> 45 day to expiry)

Find month range from Supports and

2 Sell Strikes range determination
Resistance on hourly chart
Validate with Vix calculation, increase IV by
3 Cross Check Sell Range 5% in excel.
If current Vix is above 25, avoid entry.
4 Select Strike for CE & PE sell Strike having Premium in 65-70 Range.
Strike having Premium in 100-110 Range
5 Select Strikes for hedge CE & PE buy (i.e. 40 to 45 above sell stike premium)

6 No. Of lots Sale of PE side 2 (or 5)

1 (or 2)
7 No. of lots Hedge in PE side (1:2.5 ratio or even 1:3 ratio gives better
profit in middle of payoff chart)

Inside hedge of Same Expiry with at least

300 gap.
8 Hedge in PE side
if 1:3 ratio is used, then shift hedge further
inside ~ 400 gap

9 No. of lots sale of CE side 2 (or 5)

1 (or 2)
10 No. of lots Hedge in CE side
2:3 ratio can also be used.

Inside hedge of same Expiry with 200 pts

gap.
11 Hedge in CE Side
Try to get 1.5% - 2% profit in the middle of
payoff chart

Anytime if loss is 2 - 2,5% of Deployed capital,

then exit .
12 Stop Loss
However, strategy will show loss in initial few
days.
2% of deployed capital, if available in 10-15
days.
13 Target
However, this has potential to give 4% to 5%
profit if held for long.
1. When MaxPain goes up by 200 pts, Shift
Put Sell up - reducing gap between PEsell and
it's hedge.
2. If MaxP goes up further by 100 pts, add
14 Adjustment for Market Going Up Outside hedge of same expiry on call side
(never add inside hedge on call side).
3. If Exceptional market strength still persists,
shift Put Combo up gradually, in half lots if
possible.
 1. If market comes down slowly, Max Pain drop
100 pts - Add Outside hedge gradually in
small lots (additions limited till profit in middle
becomes zero).
Can gradually remove these hedges if market
reverses up BUT never decrease initial Inside
hedge.
15 Adjustment for Market Going Down
2. If market comes down sharply, Max Pain
drop by 200 pts, Vix sharply increases by 15%
- Add Inside hedge gradually in small lots,
(additions limited till 1:1 ratio or profit in
middle becomes zero)
3. Calendar hedges not viable in M1 strategy
due to liquidity issue.
 M2
About 10th of month(> 45 day to expiry), M2
needs good premiums
Find month range from Supports and
Resistance on hourly chart
Validate with Vix calculation, increase IV by
5% in excel.
If current Vix is above 25, avoid entry.
Strike having Premium in 70 Range.
M3
About 25th of month. Late strategy to get
liquid calendar hedges at reasonably low
premium
Find month range from Supports and
Resistance on hourly chart
Validate with Vix calculation, increase IV by
5% in excel.
If current Vix is above 25, avoid entry.
Strike having Premium in 40 -50 Range.

Strikes having Premium around 90-95 for Calendar premium uncertain, cannot be pre-
Inside and 45-50 for outside hedge. defined.

3 3

1+1 1+1

Inside hedge of Same Expiry with 200 gap Inside calednder hedge with 100 pts inside
AND Outside hedge of same expiry with 100 AND. Outside hedge of same expiry 100 pts
gap. outside
if more (300)) gap available in same premium (Try various combinations - strategy should be
as call inside hedge, use it. Vega positive, Delta neutral)

3 3
1+1 2

Inside hedge of Same Expiry with 200 gap 2 lot Outside calendar with 100 pts gap or
AND Outside hedge of same expiry with 100 classical calendar. Do not use inside calendar,
gap. can use IC hedge Inside.
If less gap available in same premium as put Try variuos combinations to get 1.5% - 2%
inside hedge, use it. profit in the middle of payoff chart
Anytime if loss is 2 - 2,5% of Deployed capital,
Anytime if loss is 2 - 2,5% of Deployed capital,
then exit .
then exit .
However, strategy will show loss in initial few
days.

2% of deployed capital. Mostly 15 days hold. 2% of deployed capital. Mostly 8 - 10 days

Low risk,lower profit but deployment must be hold period required to get target..
early to get good premiums.

1. When MaxPain goes up by 150 pts, Shift

Entry already adjusted stage 2 of M1 strategy. Put Sell up - first all 3 on Calendar hedge
Works better without adjustment, donot touch strike, then further up inside one by one (not
till Max Pain moves by 300 pts. all 3 lots together)
Add Outside hedge till 1:1 ratio. 2. Next add IC outside hedge same expiry in
call side (rarely needed)
 1. If market comes down slowly, Max Pain drop
100 pts - Add Outside hedge of same
expiry.
Entry already adjusted stage 1 of M1 strategy.
Can gradually remove this hedges later if
Works better without adjustment, donot touch
market reverses up.
till Max Pain moves by 300 pts.
2. If market comes down sharply, Max Pain
Add Inside hedge till 1:1 ratio.
drop by 200 pts, Vix sharply increases by 15%
- Add Inside hedge of same expiry, (take
benefit of falling market by Put buy)