Fin Nifty Expiry Day Trading Strategy

An expiry day trading strategy for FINNIFTY →

Hey there 👋🏼

Today in less than 5 minutes:

1) A FINNIFTY trading strategy for expiry days 
2) Example trade

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2 days ago, we posted an expiry day trading strategy for BANKNIFTY. After getting an encouraging response to the post and several requests later, we are finally posting another expiry day trading strategy, this time for FINNIFTY.

So without any delay, let’s dive into it ↓

FINNIFTY Expiry Trading Strategy

Capitalizing on theta decay

We will play on the same theta decay logic explained in the previous expiry day trading strategy post.

We will be selling out-of-the-money options since their theta decay is rapid, and they lose value as the time to expiry runs out.

You can buy options to capture theta decay as well, but this approach typically yields a lower success rate compared to option selling. Nonetheless, if the trade proves successful, it can potentially offer greater profitability.

The strategy

We will be using the following indicators & time frame for this strategy:
- 200-period EMA
- 9 & 26 period EMA crossover
- Time frame: 1 minute

You can find these indicators on TradingView, a freely available charting software. Learn to make the most of it with our How to Use TradingView course, a full guide on how to use multiple tools to draw on charts and build your trading set-up.

Here’s how we will enter and exit a trade using this strategy:

LONG TRADE

1) Prices should be above the 200-period EMA.

2) The 9-period EMA should cross over the 26-period EMA.

3) Once the trend is confirmed, sell an OTM put with a strike price having a delta within the range of -0.1 to -0.2.

5) Wait till a bearish crossover is formed, or the option expires.

SHORT TRADE

1) Prices should be below the 200-period EMA.

2) The 9-period EMA should cross below the 26-period EMA.

3) Once the trend is confirmed, sell an OTM call with a strike price having a delta within the range of 0.1 to 0.2.

5) Wait till a bullish crossover is formed, or the option expires.

This is an intraday strategy, and can be deployed on a 2-minute and 3-minute time frame as well.

Read on for an example of this strategy deployed on 14th Feb 2024!

Starts 18th March!
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Ask us anything!

Do you have any doubts related to this strategy, or want to learn something else? Reply to this email & let us know!

Example on FINNIFTY

Here’s an example of the strategy playing out:

FINNIFTY, 1M

At 2:11 p.m. on February 14, 2024, a bullish signal was triggered as prices surpassed the 200-period EMA, accompanied by a bullish crossover of the 9/26 EMA. Implementing the strategy of selling an OTM put with a strike price tailored to a delta range of -0.1 to -0.2 resulted in a lucrative intraday profit, primarily driven by the swift theta decay characteristic of expiry days.

Note that we are not SEBI-registered advisors and none of the above trades are intended as recommendations. Do your own due diligence before trading/investing.

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