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  • Writer's pictureAvik Chowdhury

Profitable options selling intraday trade: took 10 points

Updated: Apr 12, 2023

Level of understanding required: Intermediate (at least 6 months into trading)

Fig 1 - Day Chart of India Bank Nifty


Pre-Market


Today I will only trade in an Indian index called Bank Nifty. I try and stick to one index as the chances of predicting moves become more and more accurate. I can judge the volatility levels (for instance I know how likely will this index give 20, 50 or 100 points in a candle). Based on this, my control improves on the index.


To start with, I am seeing some charts at the start of the day and noted by POV1 on the daily chart above (Fig 1).


POV 1: This is the daily chart. The daily chart is on a downtrend overall. However, last 3 sessions, the markets have been bullish and the last candle is very close to the trend line.


Today, the market can generally be in any direction. It can go up and break the trendline. It can form a doji and consolidate here. It can go down too. To add to it, the market opens in a gap-up of 0.4%.


Therefore, today, I will wait for the market to open and take a price action before making any intra-day move. I cant judge whether it will be bullish, bearish or range bound.


My target: Take 10 points of options premium


Post-Market


Trade 1: Success


Options Chart


Today, I took my first trade at the 9:25 AM candle and exited after 30 odd minutes. I took this trade of selling PE (expected the market to go up).



Fig 2 - Bank Nifty Chart showing W pattern at PE short point


When I took this trade, I was seeing a bottom at a support point and somewhat looked like a W pattern on the 1 minute chart. However, market was consolidating in a range and I noticed a flag and pole pattern on the 5 minute chart and exited (It was looking like a downward flag and pole).



Fig 3 - Downward Flag and Pole on the 5 minute chart.


I took my successful trade (displayed on the options chart below Fig 4)





Conclusion: Trade was successful. I took 10 points on the options premium which was my target.

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