This Payoff Hits like a Missile

As you can see here, we are doing exact opposite of how retail trades. Hi everybody, welcome to a very very powerful video. Like always, focus here. You're going to learn something special for you to take screenshot. I'm going to keep this video short, crisp, and to the point. No gas, no fluff. Step number one, buy a debit spread OTM. That means out of the money. that what is debit spread? Debit spread means that you are longing a call an expensive call slightly out of the money and then you are selling the call after that. I'm going to tell you how to do it and then we're going to calculate the difference between the premium buying and selling multiply by two. Just take a screenshot. I'm going to explain you in the best possible way. So here we are on an option simulator. Step one, we go to the monthly series which is 28th of August. We see where at the money is where the market is trading. This is highlighted. That means this is at the money 24650. We go slight out of the money. We buy the call. And the next strike we bought 25,000. So now we will sell 25,100 call. This is a simple debit spread. Now you see, watch it with me here. This is how it looks, right? A normal debit spread. Now what is the last step which is the easiest of all that is you calculate the difference between the premium. So it is 76 minus 55.45 which happens to be 20.55 difference between the premium and we multiply this by 2 which comes out to be around 41.1 is the premium. So now what do we have to do? We have to sell a call which is trading around 41 points. simple calculation right so let's do that so here we are we open option chain we have to find the same series of course and we have to find where 41 is as you can see this line is where the premium is we have to find where 41 is 41 41 we don't have 41 but we have the closest premium available 39.4 four and we sell this. This is a starting point of our strategy and we are going to make a lot of major changes here and for sure you're going to learn something really solid. Now here the we are just starting things out here. Okay, we make a debit spread difference whatever difference is we multiply by two whatever premium is as per the set formula we sold a call. As you can see this is really really wide. That means if you're working you don't even need to adjust it. But we are just getting started now. Here have a look at the margin uh which required here is approximately 1 lakh 94,000 to make it. We have tricks to reduce the margin significantly and exactly what we're going to do but step by step. Now here a strategy like this is expected to do very well if market go down or if market stays. So we're going to really test it in the most difficult month ever. Now this is the nifty monthly chart. Every candle represents one month. As you can see here, this is May, this is June, this is July, so on and so forth. Now of course if I take example of month like this for example, right? Which is a non-trending month or a month like this for example. Why? Because the strategy looks like this and there is plenty of room. So naturally we don't want to test it in these months. We're going to test in a very trending month. A month like this which takes away a lot of stop-loss. As you can see market has been really really wild. So let's test this. Just going to ask for some special things which we do with the strategy and special things is exactly what we going to do here. So let's test it in June and let's see the proof of the pudding lies in eating. Let's see that. So here we are on a simulator and we selected the month which is going to be super trending. It is beginning of the month as you can see here and we are selecting a monthly strike morning 930. Now let's see how do we going to do first check out where at the money is and at the money is around 23,300 at the moment. So naturally step number one is easiest of all. We go out of the money and we make a debit spread. Debit spread is simplest of all. We buy the call and then we sell a call and we've made a debit spread. Let's check out the difference in the premium and the difference is this is 266.55 minus 234.7 31.85 is the difference. We multiply this by 2 which happens to be around 63.7. All we have to do is that we have to sell a call which is trading around 63.7. So let's do that. We open option chain and we have to find which strike is trading at this particular price at the moment. This is the premium which you can see here this 439. So we will see in this line itself and we go down and we go down till the time we find 63. Now we do not have that but we have around 87. This is the closest premium available and we sell this call. So far it's very easy and let's have a look at this how this looks like this. Now in June 2024 the lot size of Nifty was 25. That means currently if we are paying suppose 195 because the lot size is obviously high it's 75. So we divide this by 3 which means to be around 65,000. Back then it used to take 65,000 to make a strategy like this. We know for sure that this month is really crazy. If I show you, we're talking about this month, right? Very very high trending month and very volatile. This is exactly what we want. So now let's see what is going to happen with the strategy and what can we expect. So we're going to go ahead slowly now, right? Fourth have come now and market is moving as you know it and fifth have come now and let's see more and market is hovering around here and what do we see is that just in a matter of a week. Now this is where the game begins because when you sell out of the money call option this ends your trade really dies. Why? Because you are selling the call out of the money you sold 87 points call which has become 16 now. So you have already taken the maximum profit potential from this and for maximum option writers this is the game and this is where it ends. But this is exactly where we are just getting started because we going to make it even better. This risk which we have we do not want to exceed is we have sold the furthest call. The farthest call which we sold is 24600. We have to do one easy step and things will drastically turn around in our favor. We have to buy a call which is one strike inside. Let me show you. Let's go to 24,600 strike. 24,600 where it is this is here 24,600 all we have to do we have to buy a call which is inside so 24500 and we buy this particular call that's it and as soon as we do we will see something happening and this is exactly what it's happening now I want you to keep a note of it as soon as you buy a call which is out of the money at the same second you're going to get the margin benefit it used to take approximately 65 5,000 rupees to take it. But as soon as you buy this call, your margin gets reduced from 65 earlier because the lot size was less. Your margin gets reduced to whopping 15,000. Why? Because you don't have unlimited risk. Now here, if market starts to go up now, you know very well what's going to happen. Very, very important. This is pure maths. Options trading is one of the most intelligent things one can do in the market. No doubt about it. And we go slowly. And what do we see is that 1682 on a margin deployed of 15,000. Now even if we go ahead, we'll see what is going to happen with the trade. We can look to book our profits partially. But I have a question for you. Tell me how comfortable you going to feel when the last time somebody told you on YouTube a trick which is easy to do otherwise everything else in trading is just shooting in the dark. You must be thinking this is a trending month. How about if the month just remain where it is? Then what is going to happen? Are we going to get theta DK? I'm going to show you that month as well. So here we go. Let's check out which month we going to do. So this month we check. Now this month which is as you can see is sideways there will be no changes in our technique in our trick we going to stick to it and if you are somebody who really looking forward to level up you really want to increase your trading prowess fill up the format which will help you leveling up we are here on the March and what do we see simple we're going to change it here now here we are in May and we're going to change it now this month is sideways month which is going to be very easy are we going to do changes here no very simple we open option chain. There are some tricks which I'm going to tell you towards the end of the video. So you make sure that you stick around. And what do we see here is market is 22,750. We are talking about this month, right? This one. This one which is not trending and we are testing it. Is this going to change a thing? I do not think so. Right. So now first we have to make a what do we have to make? We have to make a debit spread. So here we go. We find where out of the money is and we just simply sell a call. So what do we have to do? We we go out of the money and we have to simply long a call and then we have to sell the next call which is 23100 in this situation. We buy it and we sell it and let's figure out the difference between the premium. The difference is very very easy to calculate is 179.3 minus 142.4 which happens to be 36 multiply by 2 73.8 is the call which we have to sell. Obviously, it's going to be more out of the money. We open option chain and we find where 73 is and we scroll down and we see where exactly it's going to be 73. 73. We don't have 73 but we have 72.15 and we simply plainly sell it. When we do something like this, this is how the payoff looks. Of course, earlier the margin requirements were less. Now the margin requirement has gone up. It will not change a thing. So we can expect very relaxed. If market is not trending, we're going to get the theta DK anyways. So next day, ETH have come now and market is just consolidating and it's up to us when do we want to lock in. We know the next move of the chess of this game. What is that? We have to buy a call and market is hovering around here. Now we open option chain. Remember this ROI is on the lesser margin requirement because earlier it used to take very less margins. Now what do we have to do? We have shorted the call 23,350. Just one easy step, right? What is that? 350 is what we sold. We go one strike inside and we buy this. As soon as we buy this, the things will turn out to be completely different for us. And this is how it happens. Now market can continue to go down or continue to go up. There is no issue. I want to ask you one thing really. I wanted to ask you do a lot of option selling, right? And you get theta DK. If you have to get theta DK theta DK we are getting it here as well right but here you have locked your trade as you can see here isn't this better I want to ask you much better right even when you're winning why to win small let's see now what happens even if market stay where it is there is no issue here absolutely there is no problem whatever can happen in this particular trade you can hold on to it because we are doing exact opposite exact 360° opposite versus how other retail traders trade. This is the real difference when you have better knowledge and how much time it takes to learn something like this. We are not done yet. I'm going to tell you VIP points because half knowledge is dangerous. I want to give you full information. I'm here to remove your blind spots. So, let's talk about the VIP points, your favorite. Because if you're staying in the video so far, that only means one thing that you deserve to know even better. So, here we go. Keeping a hard stop-loss is must. That's the exact reason why I say you can learn the craft in record time. Just like you've learned something special, powerful. I'm 100% sure that you will take advantage of what you've learned in this video. And thanks for showering so much love on the channel. Your likes, your comments tell me that you're getting things like this, which is really good. I make videos for people who already have basics in place. Thanks for watching.