Iron Condor

DISCLAIMER
I am not a SEBI registered adviser. All the information

provided by me are for educational/informational
purpose only.
All analysis is shared for educational purpose only. I do
not take responsibility for the accuracy of the data but
as it may contain typographic or other errors and
inaccuracies and disclaim liability for any errors
How Many People Invest In The Stock
Market In India
We have a population of about 138 crores, and from them, about 1.2 crore people are
actively investing and trading in the Indian stock market. You can think very few people
in India are financially literate. Therefore, there is less number of active investors in the
stock market.
During the pandemic period, people have become aware of the benefits that are
associated with stock market investment through stock trading platforms.
In early 2020, India was adding 400,000 investor accounts every month, according to its
market regulator. In 2021, that number has grown to about 2.6 million, about half the
population of New Zealand.
As per SEBI data, close to 6.3 million (63 lakh) new Demat accounts have been opened
during the April-September 2020 period, representing an increase of 130 per cent on a
year-on-year basis.
WHY OPTIONS SELLING NOT
BUYING?
Selling options is a positive theta trade. Positive theta means the time value in stocks will
melt in your favor. An option is made up of intrinsic and extrinsic value. The intrinsic
value relies on the stock's movement and acts almost like home equity. If the option is
deeper in the money (ITM), it has more intrinsic value. If the option moves out of the
money (OTM) , the extrinsic value will grow. Extrinsic value is also commonly known as
time value.
During an option transaction, the buyer expects the stock to move in one direction and
hopes to profit from it. However, this person pays both intrinsic and extrinsic value and
must make up the extrinsic value to profit. Because theta is negative, the option buyer
can lose money if the stock stays still or, perhaps even more frustratingly, if the stock
moves slowly in the correct direction but the move is offset by time decay. Time decay
works well in the favor of the option seller because not only will it decay a little each
business day, it also works weekends and holidays. It's a slow-moving money maker for
patient investors
TERM THETA ?
The term theta refers to the rate of decline in the value of an option due to the passage
of time. It can also be referred to as the time decay of an option. This means an option
loses value as time moves closer to its maturity, as long as everything is held constant.
INVESTMENT ALONG WITH
TRADING
CONCEPT OF PLEDGING AND NIFTY BEES-
The NIFTY BEES approach is a no-load strategy. One of the cheapest for any mutual
fund scheme in India. For assets worth more than Rs.5 billion, the charges are also very
low.
Benefits of Nifty Bees-
1. Diversification
2. Inflation-adjusted returns
3. Liquidity
4. Low-cost investment
BANKNIFTY WEEKLY MOVEMENT
BANKNIFTY WEEKLY MOVEMENT

1-1-2017 To 31-05-2022
BANKNIFTY WEEKLY CHANGE IN NIFTY CHANGE (IN %)

MOVEMENT
< 3% RANGE 242 85.5%
3% - 5% RANGE 25 8.8%
> 5% RANGE 16 5.7%
TOTAL 283 WEEKS 100%

MONTHLY STRATEGY
High Value Iron Condor to IF

An iron condor is an options strategy consisting of two puts (one long and one short) and two calls (one
long and one short), and four strike prices, all with the same expiration date. The iron condor earns the
maximum profit when the underlying asset closes between the sold strike prices at expiration.
The iron condor has a similar payoff as a regular condor spread, but uses both calls and puts instead of
only calls or only puts. Both the condor and the iron condor are extensions of the iron butterfly,
respectively.
THE STRATEGY
► INSTRUMENT- Bank Nifty

► ENTRY- 1-5th of every month
► STRATEGY- Iron Condor + IF
► STRIKE- As per 25 delta Strikes Sell and 17 Delta Strikes Buy
► ADJUSTMENTS- Conversion of Iron Condor To Iron Fly Then After than
continue adjustment as per IF.
► TARGET- Highest We can get by end of expiry by maintaining the Lowest
SL.
STEPS FOR CREATING A
STRATEGY
Sell one OTM put with
(25) Delta Strike and
Sell one OTM call with
(25) Delta strike at the
starting of the month.
Buy Put strike at

downside Breakeven
and buy Call strike at
upside breakeven of
strategy to complete the
setup.
ADJUSTMENTS
We will adjust only
when market reaches
near to 200 points to
our sell strike at day
end
Convert to IronFly
CONVERTED TO IRONFLY
REACHED TO BREAKEVEN POINT OF IF
Next Change Only

When market reaches
or crosses IF
Breakeven any side.
Reduce the Difference

between sell and Hedge by
shifting Hedge to Near and
reduce the loss of untested
side.
Only Till 100 points gap
between sell and hedge.
FINAL PROFIT OF STRATEGY
SOME PROBLEMS TO IC AND IFS
Increasing VIX/Volatility is always a problem to Credit Trades
Higher Gaps and Fast Movement with short period or within a month
LETS BACKTEST IN THE WORST SCENARIO

PERIOD PROFIT
JAN 2021 6% (+35k)
FEB 2021 -2% (-11k)
JAN 2021 MAR 2021 6%(+35k)

APR 2021 1% (+7k)
TO
MAY 2021 10% (+49k)
MAY 2022 JUNE 2021 6% (+30k)
JULY 2021 4% (+21k)
AUG 2021 2% (+11k)
SEP 2021 5% (+27k)
BACKTESTING OCT 2021 - 4% (-21k)
RESULTS NOV 2021 3% (+15k)
OF DEC 2021 - 4% (-22k)
HALF MARGIN USED JAN 2022 - 1.2% (-8k)
OF FEB 2022 6% (+32k)
5LAC MAR 2022 17% (+85k)
APR 2022 - 4% (-20k)
MAY 2022 8% (+44k)
Total 58.8% (+294k)
RISK MANAGEMENT
Risk management helps cut down losses. It can also help protect traders' accounts from losing all of
its money. The risk occurs when traders suffer losses. If the risk can be managed, traders can open
themselves up to making money in the market.
PLANNING YOUR TRADES
Planned Adjustments
Use Only 65% Margin Not Above That
First Reduce The Loss Then Think about the Profit

THANK YOU…

Iron Condor

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DISCLAIMER

I am not a SEBI registered adviser. All the information

BANKNIFTY WEEKLY MOVEMENT

BANKNIFTY WEEKLY CHANGE IN NIFTY CHANGE (IN %)

> 5% RANGE 16 5.7%

TOTAL 283 WEEKS 100%

High Value Iron Condor to IF

► INSTRUMENT- Bank Nifty

Buy Put strike at

Next Change Only

Reduce the Difference

Increasing VIX/Volatility is always a problem to Credit Trades

LETS BACKTEST IN THE WORST SCENARIO

JAN 2021 MAR 2021 6%(+35k)

PLANNING YOUR TRADES

Use Only 65% Margin Not Above That

First Reduce The Loss Then Think about the Profit

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