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Make Money in Sideways Share Market using Short Straddle Option Trading Strategy - YouTube
Channel: Pushkar Raj Thakur: Business Coach
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So hello everyone, welcome back to your channel,
so far you have learned the option strategies
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which you can use in the market if your view
is bullish or bearish in the market.
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So what about if you feel that the market
will neither go up nor will it go down.
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It will be sideways, so the market is going
to be sideways.
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So are there some options strategies for that
also that we can earn money in that too.
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The answer is yes, you can earn money in the
sideways market if you think that market will
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remain neutral or sideways, what do you do?
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There is a beautiful strategy for that, which
is a short straddle.
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Now short means to sell, you are shorting
the position, meaning you are selling.
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Now what you sell in the straddle, understand
the straddle, it means the same strike.
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Whatever the strike price is going on, it
means that at the money options, there are
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call options and put options in the at the
money options, if it will be short straddle
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then we will sell it.
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And if it will be a long straddle then, which
we will learn in the upcoming videos, when
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to use them, then you will sell the call and
put both in it.
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You will purchase in the long straddle and
you will sell in the short straddle.
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These both should be at the money and I will
show you on my computer screen and I will
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show you how you are going to earn money in
the sideways market and when we are talking
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about the benefit of the money options you
will sell.
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So you will see some kind of graph being made
in this way and you will earn money on this
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peak, so I will just show you.
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So I take you to my computer screen only log
in on one sensible, so there is a link of
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sensible in the description and comment box
so that you can also log in.
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Alright see here, when we go to sensible,
simply you have to go on strategy builder
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and when you will go to sensible builder and
in the readymade strategy and when you have
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the neutral view for the sideways market,
then you will click on the short straddle
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When we click on short straddles, then you
see that short means selling and we will sell
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the call and put options in at the money.
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Here nifty closed with 17,277 means at almost
17,300, so the money came at 17,300.
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We have taken the lot of 17,300 of the call
option and put the option as your budget allows for one or two lots.
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So you can short both, if you have a view
in the market that the market will not be
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much volatile here, now see what you did here.
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When you sell them Both, then you did your
position theta long, theta long means as time
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will go by, you will earn money.
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Now look here, Now here you will see a break-even
point.
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How far is the break-even point here?
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Right now the market is at 17300, the market
has been closed.
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The market closed at 17300, one is your break-even
point here close to 17100, so 17093 and second
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round to 17500, means you are getting a gap
of 400 points, then there's a difference of
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400 points if the market remains within 400
points till the expiry, then you will have
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profit till here and there will be a maximum
profit of 10,300.
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And loss can be unlimited, there can be an
unlimited loss.
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So sir why are you telling us this strategy?
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Unlimited loss can happen because if the market
rises too much and has fallen so much then
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you see that you definitely can get a loss
in both places.
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But your view of the market.
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Views are very important here because your
view for the market is that the Market will
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remain sideways and it will not go up and
down.
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If the market closes around 17300, then see
here you will have maximum profit in the middle.
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Let me show you by zooming out then on 17300
you are getting 10303, which is the maximum profit
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If the market stays here, and this is what
we are talking about expiry, if you will see
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before it, then you will not get much benefit
in sideways because here you are doing theta long
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Here all Greeks are written as Delta, Theta,
and Gamma.
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Everything is written here, so when you are
doing theta long here, then you will benefit
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from the passage of time.
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And option sellers benefit from the passage
of time so If you feel that the moment in
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the market is going to be neutral, then you
will earn money here and even if the market
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will increase by 100 points and if it will
decrease by 100 points.
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And here you are getting a pitch of 400 points
to play in the market.
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So here is the difference of 400 points, you
can see if the market gets close around expiry
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of 17100 then you are going to earn 303 rupees
and if 17490 comes then you are going to earn
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around 800 rupees.
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So this is a strategy that you can use, but
here see the margin requirement.
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Here funds are needed for ₹ 120000 to use
it as you are shorting both the positions
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then you will have fund requirements.
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You need margin here and here the Probability
of Profit is 60%.
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So when you will use this strategy, you will
be short straddle, you will use it when the
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market is sideways, but I will tell you in
the coming strategies that when you have to
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long the straddle and how much profit you
can earn from it and you can also make an
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unlimited profit, so now in this series, we
will study those options which you can get
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used in the sideways market.
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So you learned one strategy which is the short
straddle.
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How did you like this strategy, you can tell
in the comments and you can share this video
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so that people can also learn this strategy
sitting at home.
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Along with this, you can like this video to
give your love and if you have any questions
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then you can ask in the comments.
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If you do not have your Demat account yet,
then there is a link to leading brokers in
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the description and comment box.
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You can go and open your Demat account today
and if you have seen this video on Facebook
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then follow immediately if you are watching
on YouTube then subscribe and the bell icon.
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I will see you in the next video till the
time you go self-made.
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