"0" Adjustment Hedging Strategy!

How much return do I target? My annual return is around 30%, around 25-30%. To make that 25-30%, I invest my money in GSEC. So, before we move on to the strategy, let's cover a few key points in 2 minutes. What should be the ideal strategy? The biggest risk in positional option selling is the downside. There is no risk in the downside. You are 25 years old, right? I am 24 years old, so I have seen all the profits. Let's go in June. I will show you the worst of the worst. You will see the best of the best. I believe that if you learn to cut losses, you can make a profit. Friends, if you want to earn a consistent return of 2-2.5% from the stock market every month, then this video is for you. In this video, we will understand about such an option strategy. Yes, we will trade in options. We already know the risk. We also know how much money we are going to make. We can make it once and call it a set and forget strategy. Once you have set it, then forget it. You don't need to look at the chart again and again in the whole month. There is no need to make adjustments. You know how much money you are going to earn. You know your stop loss. And that is it. And when you see the win rate of this strategy, then you will be surprised to see that the win rate is above 90%. So to tell this strategy, I have such a trader connected with me, who has about 7-8 years of experience. And with his experience, he will teach you this strategy in detail. One and only Mr. Kundan Prajapati. So, Mr. Kundan, welcome to our GoSelfmade Show. Thank you so much, sir. Thanks a lot. And thank you so much for giving me this opportunity to share my strategy with your audience. You are doing a good job, Udair. Sir, the strategy that we are going to discuss today, we don't have to look at any chart. There will be no view-based trading. You don't have to make any adjustments. Whenever it comes to hedging strategy, people get a little scared that they have to make adjustments. But there is zero adjustment strategy in this. Plus, the biggest risk in positional option selling is of downside. There is no risk of downside in this. It is a very simple, easy to use, consistent return strategy. So before we move to the strategy, let's cover a few key points in 2 minutes on how an ideal strategy should be. So the first point is that there should be no risk of black-shot event. There should be no risk of downside. Second is IV spike. The major risk in options is of IV spike. So if there is no risk of downside, there will be no IV spike in downside. Third is Gamma spike. So if you trade intraday or weekly experiment, there is a risk of Gamma. This is a monthly strategy. So we don't have that in this. Should not trade any fat risk strategy. If there is any big risk, especially in downside, then it should not be done. Adjustments should be less. So there is zero adjustment in our strategy. Higher POP, i.e. probability of profit will be good. So there are more chances of profit. Consistent returns should be made and there should be less screen time. Keeping these few key features in mind, I have made this strategy. Now let's come to the strategy part. Today we are going to discuss monthly no-brainer Nifty. The name of this strategy is no-brainer because we don't have to think about it. We don't have to look at the chart nor do we have to make adjustments. So let's come directly. One thing I want to tell you is how much return I target. My annual return is around 30%. It is around 25-30%. To make 30% of my annual return, I invest my money in GSEC. Like you do in ETF. I invest in GSEC and pledge it. I get 7-8% return from there. The collateral margin I got is interest-free. I do option selling with that. I got 6-7% there. I have to make another 24% i.e. 2% per month. If I am making 2% per month and 30% per year, that is very sufficient. Now let's come to the strategy. There are very simple rules. But watch carefully. We have to trade the script in FT. The duration of this total trade will be 15-20 days. In maximum days, you will get it in 10-15 days. But maximum will be 20 days. Not more than that. We will take weekly expiry. We will not talk about weekly expiry because there is speculation. We are discussing such a strategy that anyone who watches a podcast after 1-2 years can trade and practice. Last Friday of the month is the last Friday of this month. You have to make a trade on that day. But for the next month's expiry, October. What time do you have to enter? 3-16. You have to make a position on Friday after 3 in the evening. The target is 2.5%. Whatever is your deployed margin, you will take a target of 2.5%. 2.5% target done. Trade closed. You don't have to stop for 0.1% extra. Same goes with the stop-loss. There is a fixed stop-loss of 3%. Because there is no adjustment. As soon as your MTM is 3% negative, you have to cut the trade. I believe that if you learn to cut losses, then you can make a profit. If you cut at a profit of 3%, then the accuracy of this strategy is so high that you will be profitable in the long term. But if you don't cut at 3% and keep sitting in hope, then God will not trust you. There is a term here. Debit on downside. The debit of the downside, when we will understand the payoff, I will explain what is the debit credit. There should not be more than 1% debit and not more than 1% credit. We will discuss that in the payoff. These are some rules. Now let's come to strike selection. The spot is 24,000. You have to buy a call 300 points away from the spot. One lot. It doesn't matter. You don't have to look at the chart. Whatever spot you get on Friday at 3 PM, you have to buy one lot 300 points away. You have to sell two lots 300 points away from it. Your selling leg is 600 points away from your spot. You have made a call ratio of 1 is to 2. There will be an undefined risk here. To protect that, we will go 1000 points away and buy a hedge. The margin has been reduced. The undefined risk factor has been removed. You may not be able to understand it now. Note your rules. When you see the payoff chart, you will understand what we have done. We are trading in call ratios. Comparatively, it is a safe strategy. If you understand this, you will enjoy it. Let's move on to the payoff graph. Your payoff graph will look like this. I will explain the payoff to people. Looking at the payoff, you will understand that if the market falls down, you will not have any loss. You can see a small green. There is a triangle. It will go up a little. If the market goes up, you will get money. If the market goes above the breakeven point, you will have a loss. This will be your payoff. There is a hedge. It is far away. The max loss is at 53%. Otherwise, it looks unlimited. This is a backtest report. I have made a standard backtest. If anyone wants to do a backtest, you will follow the same rules. This is a backtest report of the last 8 months. There was a 17% return in 8 months. There is no loss in a month. We will take a random month and simulate it. It is perfect. I understood. People will also understand. We will do it and see. That's it. Let's see the average profit. It is Rs. 21,000. How much is the margin deployed? Around 1.5 lakh. 1.5 lakh. 2.5% to 2.5% return. 1.5 lakh is of 1 lot. You must have taken more margin. Your total backtest report is at Rs. 10 lakh. 10 lakh. You made 2% at Rs. 10 lakh. The max profit is Rs. 27,000. There is no loss. Let's see the payoff graph. How does it look? If I want to make August expiry, I will come in July expiry. On the last Friday of July expiry, I will come on that day. In the evening, it will be 3.16 pm. Our time and date are set. Then we will select the expiry. That is 28th August. It is a monthly expiry. It is a 50-strike. We will leave the 50-strike and look at the next month. We will look at the next month. If it is a 50-strike, we will leave the 50-strike and look at the next month. There is illiquidity in 50. We will look at the 24th and 9th spot. I bought 25,200. Perfect. I sold 2 lots at 300 points. We increased the lot here. 1 is to 2. Our ratio is 1 is to 2. There is undefined loss. The margin is 2.08 lakh. We will take a hedge to reduce our margin. We will reduce the margin. The margin is 2.08 lakh to 1.33 lakh. If you look here, you have a credit of 0.5% on the downside. You will say, how will 0.5% become 2.5%? It will. There can be a lot of people who will go up and there will be a loss. After 2-4 days, the call ratio is affected. After 2-4 days, the blue line goes up. If the blue line goes up, you will have more profit. We will understand if we simulate it. We will understand if we simulate it. This is our setup. We don't have to do anything. You just have to make a profit of 2.5% or 3% stop loss or 21st of next month. If you don't get profit or loss till next month, then exit the trade till 21st. If you don't get profit or loss till next month, exit the trade till 21st. We won't go in weekly. We won't go weekly because there will be a gamma spike. This is our setup. Now we will simulate it slowly. If you can see the loss here, then breakeven is 3.9, i.e. 4% away. Nifty will have to run at 4% to give you a loss within that month. Yes, if the blue line moves suddenly, you will see the loss. You will see that it is a notional loss. But when will you realize when that 4% Nifty will increase? And if the momentum comes very fast, then you have to cut it at 3%. You don't have to wait for breakeven. If it goes down, then there is no tension. No matter how big the capdown is, there is no problem. Which is a major risk of downside. Now let's simulate the next day. By doing it slowly. Profit of 0.8 came. 1.1 came. It's been 2 days. 2-3 days. 1.1 came. Now see the blue line. When we initiated the trade, how much loss was there? And how much is happening now? It's not happening at all. Why? Because the blue line is slowly uplifting. And this is how it gives us profit. 1.1 is not running. Because you don't have to do anything in this. You just have to wait for the profit to come. 1.4 came. 1.6. See, it is increasing for 2 hours. But the profit came. And the best part, its MTM runs very smoothly. Like most people do option buying. They fluctuate a lot. They can't handle the psychology to hold. You don't have that tension in this. I will do it slowly. Now see, when the market comes down, you won't get much profit. You will get more profit when the market stays up. Right. Right. Now see, when it goes up, you will get more profit. But if it stays down, then we will wait till 21st. If we get profit till 21st, then we will leave. Otherwise, see, it came. 2.8%. This was 1.3. The next day, as soon as we came, there was a gap. A little. 2.5. It is 9.16. I will come to 9.20. So that we get time exactly. Simple. 9% came. We didn't do anything. Trade cut here. Now see, the blue line that I was saying, when it goes up, the blue line gets uplifted. Now see, how smooth, good, favorable blue line has been made. That means the market will go up by 3% from here. So you don't have any tension. Absolutely right. This is the effect of call ratio. Absolutely right. So our trade is done, sir. The month you say, we can do simulation. So anyways, let's take a trade of last year. Let's take a trade of last December. Okay. Okay. I will come. This is in December. Okay. We will make this in November. Okay. Okay. We will make this last Friday of the month. Right. Okay. Reset it. Yes. That 3-16, that means you have been given time. You have to do it after 3 o'clock. There is no stone line like that. If 16 comes out, I can't make it. No no. You can make it at 3 o'clock. There is no problem. We just have to nullify the movement of that day. So he has bought 300 points OTM. He has sold 600 points OTM. 2 lots. Yes. And by going 1000 points away, he bought 1 lot. I have bought 26,000 here. Okay. This is done. There is a credit of 0.3% downside. Now, if someone wants to do it, he can do it with 10 lakhs or 5 lakhs. Only 3 trades are being executed. So you don't have to go to much charges. Now we are doing it with almost 5 lakhs. Yes. Okay. Now look here. We have a loss of 1.8%. Okay. 1.8% 1.2% 1.4% 1.2% 1.8%. If he gives an SLO of 3%, then we will deduct it. Absolutely right. Okay. I guess the results of the state elections came in December. So maybe it has gone up. Let me see. We will wait till 3%. 2% has come. Look, SLO is here. Yes. It has been hit. We have to deduct it. That's why I gave you December. Yes. Whatever it is. Okay. Let me show you this year's backtest report. This is of January. Okay. I will show you here. This is January expiry. Profit. February expiry. We did not take December expiry. Yes. That is of 2024. The backtest I am showing you is of 2025. Okay. February. All profits are there after that. All. I mean, it is not there in any month. Its returns are not so good in 2024. To be honest. 12%. It is still in profit. Okay. Let's close this. Let's see what happened next. This one which came up to 2.9%. Let's see how far it went. Now look here. I will go on this. Yes. Okay. I will go. Now it will come down again and might recover. Yes. Okay. I will do it in 2 hours. Look. This is 4.5%. Yes. Loss will come. So if 3%. Because if it runs, then the blue line will come down a lot. And the problem that is coming here. Look. When the expiry was removed after November. So from November to February, the IBE was going up. And the premium behavior was very bad. I did not put any trade from November to February. After February, I started putting trade in March. Because whenever such changes come, then you should take a little break. Because premium behavior behaves absurdly. And this is the result of this. Okay. Okay. Let's do one thing. Let's try it in June. Yes. Perfect. June 2024. You are 25 years old. Go on 24. You have already seen all the profits of 25. Let's go in June once. Okay. I will show people the worst of the worst. Yes. Okay. We will see the best of the best. Now look. In June, I would like to mention a point here. There were elections on 4th June. Yes. Results. The event is coming. Whether it is election result, budget or any major event. In that month, you try or not to deploy. Perfect. Okay. Now you go and make it in May. Yes. Let's see what happens. Okay. In May, we make it on 31st. Yes. Make it. By the way, this is a safe strategy. Honestly speaking. You are getting a range of 4%. You are getting a very good range. But now let's see how it works on elections. Okay. IV must have already increased. Yes. So this is the thing to see. There will be a rule here. I will tell you. Here I have written a credit. Max credit not more than 1%. If it is showing above 1%, then don't make it. No. It will be made. But we will sit away. Okay. And it will be away from 200-300. Yes. We will go away from 200-300. For example, I have taken a hedge here. Okay. Now look here. The downside credit is 4.9%. Yes. We will keep it away till then. Till 1%. Till 1%, we will not come on the credit of 1%. We will keep the distance the same. How much is it now? 2.5. We will go further. Okay. So you can say that this strategy is beautiful in a way that it automatically makes itself safe in high IV. So this is the strategy. You can say that there is a kind of beauty in it. Yes. It automatically saves itself in high IV. Right. Now you have also got the thing to learn. Now you have also got this thing to learn. Take it as 1%. Look, it is adjusting till when. Go there once. 1.2. Till when you are getting 1% on expiry. Now. Now it is still 1.2. I will go a little further. I will go a little further. A little 24600. If I go one more strike, then it will be done, I guess. Then it will be done. 1.4 came. Okay. Let's keep it at 500. If we put the hedge inside, then it will be done. We will put the hedge inside. Around 1%. Perfect. Okay. Now we will simulate this further. Now see, the break-even is done. 7% is away overall. Thick. Yes. From here, we will see the break-even of 6.9%. We will see from here. 6.9% break even. This is 1.1. 1.4. IV will increase. There will be a loss. But here we are safe. Here it went till 2.1. Okay. Till evening. Now the next day. The gap is down again. We are safe. Okay. That is, our 3% SL did not hit. It did not happen. Okay. Did you come straight to 4 June? Or did you hit slowly? No no. I am doing it slowly. I am doing it for 2 hours only. No no. When did we start? We started. We put the trade on 31st May. Yes. So from 31st May, if we go straight to the next day, then 1st is 3rd June. Yes. So from 31st May. If we go straight to the next day. 1st. 1st is 3rd, right? Yes. No. From 31st, straight to your 3rd. Yes. So start from 3rd. Continue. Yes. So 3rd. 2% came. Yes. So there was a big gap. So we are losing 0.7%. Okay. Okay. Then kind of 0.9. 0.6. It is going on like this. I do it for 30 minutes. Okay. 1.1. 1.2. 1.4. 1.6. Okay. 1.3. 1.5. Now see, till 1.5 means 1.7. 1.8. 1.9. 1.8. So it has gone up to 1.7 and 1.8. It has not gone more than that. No. But we are doing it in the month of results. Right. Okay. And why did this happen? Because we went far because of our increase in IV. Because due to our raising in IV, we went away. Right. Right. If credit… Market had fallen on 4th. So it should go in your favor, according to me. See. It came. Okay. It came. There was a gap. Profit of 0.4. Now if you remember, the day the election result came, then 52% IV spiked that day. Market had fallen till 8%. So whenever IV spikes, no matter where it goes, we are still in 1% profit. So whenever IV spikes, no matter where it goes, we are still in 1% profit, although there is no tension in the downside. Yes. Although there is no tension in the downside. We are in profit even at the fall of 8%. We are in profit even at the fall of 8%. But when IV spikes, the premiums will increase. But when the IV spikes, the premiums will increase. Yes. So we are not getting that much profit there. So we are not getting that much profit there. But still, we don't have any loss in terms of MTM. But still, we have no loss in terms of MTM. We can sit peacefully. That's what we have to see. Okay. See, we are in profit till 1.2. See, we are in profit up to 1.2. And we will cut exactly at 2.5. And we will cut exactly 2.5. 2.5. Okay. Now the next day, 2.2 came. Now the next day, 2.2 came. 2.4. 2.2. 2.3. 2.4. Come on. Now see, when it started going up, the IV started increasing. Come on. Now see, when it started going up, the IV started increasing. It came up to 2.4, I guess. It came till 2.4, I guess. Yes. Okay. 2.2 again. Think, there is so much volatility. Imagine, there is so much volatility. It came. It came. It was such a volatile market. This is the only strategy that can survive. This is the only strategy that can survive. Both the downside and the complete V-shaped recovery. Both the downside and the V-shaped recovery. If you do an iron corner, it will come down. If you do iron condor, it will come down. you will lose output, you will go up, you will lose call, iron fly, iron cord, straddle, strangle, whatever you do, V-shape will frustrate you in this volatile market. Call ratio is like this, see, we have tolerated everything, we had come up to 1.5 in the gap of the next day, but still we have made a profit. Now, you understand here, we left here on 11th, and we traded on 31st, now we left in almost 10-11 days, you don't want to do anything else for the whole month, we will make this strategy again, you will not make it, now we will do nothing from now, now new strategies, so I hope friends, you have understood about this strategy, if you have any questions related to this strategy, then you can definitely ask in the comments, we will try to answer those questions in the next video, what do you do in options, do you buy or sell options, if you buy, then write buying in the comment, if you sell, then write selling in the comment, and if you are new, then you can write in the comments, we are new, so we will try to make videos according to your interest, finally, I will give the link of your Instagram in the description, people can go and watch, R- I am not active on YouTube now, but 5000 subscribers, there also slowly, V- we will also put the link of YouTube in the description, people can check out, finally, we will meet you in the next video, till then you can subscribe the channel, click on the bell icon, you go self-made and Jai Hind.