Verdict
Real option-buying backtest. Decoded entry: a Supertrend flip on NIFTY 10-min bars → buy the ATM weekly CE (long) / PE (short), stop 30% / target 60% of premium, square-off by 15:15. Priced on real 1-minute NIFTY option premiums (GFDL, 2015–2026 — every tick of theta, IV crush and gamma is inside these prices), real charges and spread.
3,247 trades on ₹1L: net -279.5% over 12 years (-23.3%/yr, loses money), win 39%, payoff 1.42 (avg win ₹2,474 / avg loss ₹-1,739), max drawdown -301%, worst trade ₹-10,428. 2015: ₹-22,352. 2016: ₹-26,904. 2017: ₹-11,241. 2018: ₹+21,297. 2019: ₹+8,045. 2020: ₹-31,491. 2021: ₹+4,826. 2022: ₹-64,975. 2023: ₹-71,353. 2024: ₹+21,160. 2025: ₹-80,324. 2026: ₹-26,205.
Option buying is convex — low win-rates are normal; the question is whether winners outrun the premium bleed. Backtested on 12 years of minute-level premium data (2015–2026; monthly contracts before 2019 — weeklies didn't exist; constant 65-unit lot); entries tested intraday as taught. Flagged for human review.
Full transcript (1361 words)
In today's video, we are going to see three-minute option buying strategy just by using trending OI feature and chart indicators. This strategy is Shiva's is one of most frequently used strategy to follow the intraday trend. We have been doing this post market analysis videos for the past 1 month. If you would like to see how OI pulse features and our strategies work in the live market, let us know in the comments. If we receive more requests, we will make live trading videos using OI pulse and the concepts we have taught so far. This is Raja here. Welcome to another episode of decoding the market with OI pulse. Today, 1st July, Nifty opened with a gap up of nearly 130 points and continued moving higher during the first 30 minutes. Now, let's check how trending OI is building at 9:45. Always check trending OI after at least 30 minutes from market open. The opening values change very quickly due to morning volatility. That's why we recommend waiting for the first 30 minutes. Here, the call OI is 1.8 crores and the put OI is also almost 1.8 crores. The difference is just 48 lakhs, which makes the difference percentage almost zero. That's why it shows a rounded value of 0% here. So, we have to wait until sellers dominate on either side along with more than 40% difference and at least two strength dots. Now, at 10:00, the call OI reduced to 1.6 crores while the put OI increased to 2.3 crores. The difference has now increased to around 72 lakhs, but the difference percentage is still below 40% and we have only one strength dot. So, even though the market is moving higher, we still have to wait for the trending OI strength to improve before taking a call trade. As expected, at 10:15 the difference percentage increased to 52% and we also got two strength dots. This meets our criteria to look for a call trade in Nifty. Sellers have built three crores of positions on the put side and only 1.4 crores on the call side. This indicates a strong bullish sentiment because sellers are expecting a higher probability of the market moving up rather than down. Now, we know the trend is strongly bullish. The next question is, where should we enter? We cannot randomly buy call option just because the trend is bullish. You can see the candle is already trading near the day's high. From here the market may continue higher or it may pull back. So, we have to wait for a pull back first. If the current trend is bullish, then during a pull back bulls are likely to defend our support levels and push the market higher again. That is the entire logic behind the strategy. The indicators we use are On the 3-minute futures chart, we use the default VWAP, super trend with 10 and two settings, the volume indicator to track futures volume, and a 20-period WMA. It is not necessary to use every indicator I mentioned. You can add or remove indicators according to your comfort. Here, I have disabled the WMA just to keep the chart simple and clean. Now, the market moves slightly higher and around 10:30 started pulling back near our super trend. At the same time, trending OI is still very strong with 67% difference and three strength dots, making the bullish trend even stronger now. So, the trade plan will be two lots at super trend, another two lots at VWAP, and a stop loss a few points below VWAP because VWAP is one of our strongest support indicators and it should be treated as a zone, not just a thin line. The market may slightly move below it before taking support. That's why we always give the market a little room here. Let's see how this trade goes. After our two lot entry, the market came down to VWAP, so we added another two lots. Now the market is almost near our stop loss, but in the very next candle, bulls defended VWAP and the market started moving in our favor. We can exit two lots once price moves away from our average entry, then trail the stop loss much closer and exit the remaining position once it gets triggered. Because after such a large green candle, we don't want to give back those gains. Now at 11:30, we are getting another pullback near both super trend and VWAP. In trending OI, sellers are still adding more positions on the put side while reducing some positions on the call side. The difference percentage is still above 40% along with two strength dots, indicating a bullish trend. So technically, we can look for another call trade. But the concern here is the previous up move failed to make a new swing high even after this large green candle. And including today's gap up, Nifty has already moved around 260 points, which is more than its current average daily range. If you place the ATR indicator with a 14 period setting on the daily chart, it shows the average daily movement of Nifty. Currently, that value is around 256 points. This value changes according to market volatility. During May, it was nearly 350 points. During April, it even crossed 400 points. So for now, 256 points is the average daily range. It doesn't mean Nifty cannot move higher. It simply means the probability of extending the rally becomes lower, especially when there is no major news or event supporting the move. So you can either skip the trade completely or take it with a tighter stop loss without averaging like we did earlier. Since super trend and Vwap are already very close together, there is no need to average again. Simply enter two lots here and place the stop loss a few points below Vwap. Let's see how this trade performs. After our two lot entry, the market moved in our favor. We can exit one lot here and move the stop loss to break even. That way, even if the market reverses, we still close the trade with some profit. However, the market continued moving higher. So, we can trail the stop loss candle by candle and exit once it gets triggered. Now, again at 12:30, we are getting another pullback near super trend. Trending OI is still showing a strong bullish trend with 60% difference and three strength dots. But, we are still choosing not to take another trade because this previous rally also failed to make a proper new swing high. Just because the wick moved above the previous high, it doesn't qualify as a genuine breakout. This level is still acting as a strong resistance as the market has already rejected from here three times. So, it is not ideal to take another call trade even though trending OI is showing strong bullish strength. Also, the market has already stretched beyond its average daily range. We have also captured two good trading opportunities already. So, from here, we are not going to take either a call or put trade unless we see a major OI reversal or a proper breakout on the chart. After 12:30, the market once again failed at the same resistance and remained stuck in this range. But, many traders ignore these chart conditions and continue buying calls just because trending OI still shows strong bullish percentages. Remember, the OI data is derived from what the market is doing at the current moment. It tells you the current trend, but it does not tell you exactly when to enter or when to avoid a trade. That decision depends on your chart reading, trading setup, and discipline. Our job is to combine both the OI data and price action to decide when to trade, and more importantly, when not to trade. Hope you like this video. If you have any doubts or feedback about OI Pulse, comment below. We'll look into it. Subscribe to our channel and share this video with your trading friends, and I'll see you in another interesting analysis video. Thank you.