Article written on Tuesday, 22-April-2025

Highest Call & Put Open Interest for April 2025 Monthly Expiry

NIFTY OUTLOOK

Highest Call Open Interest has moved higher to 24,500 strikes, while on the downside, the highest put is at 23,800 for the monthly expiry.

It may change since the monthly expiry still has a few days left.

Nifty has moved up over the last 8 trading days, and today it is near its 200-day moving average.

Some profit booking cannot be ruled out.

BANK NIFTY OUTLOOK

Bank Nifty scaled a new all-time high, led by HDFC Bank. PSU banks broke out above the 200-day average with a strong gain of 2.5% on average.

The highest Call Open Interest (OI) has moved higher to 55,500 strikes, while the downside, the highest Put Open Interest (OI) has moved higher to 54,000 for the monthly expiry.

Here too, some profit booking cannot be ruled out.

Please keep listening to the news. Markets will move once Trump opens his mouth.

If the news is negative, like an increase in tariffs, then short. If the news is positive, like no increase in tariffs, then go long.

Trade safely and with a hedge.

My Monthly Income Options Course will teach you proper hedging and trading options, futures and stocks. Contact me if you want to do the course.

Date of post: 23-Feb-2025

The markets have been falling for six months now. I am sure many investors who bought stocks when the markets were at their peak (Aug-Sep 2024) must be regretting their decision.

But here is where the stock markets test your patience.

If you lose patience and sell stocks at a loss now, you may do more damage than staying invested.

This phase will come and go but once you take a loss the recovery can be even more painful.

My advice is to stay invested if you do not need the money. If you need then exit from the stock which is making a profit even if small, or the one which is losing the least among all the stocks in your demat account.

P.S.: This is a copy of the email sent to my subscribers on Thursday, 23-Jan-2025. If you want to receive my emails, please register your email using the form above.

India VIX for some strange reason is increasing. This is good for option sellers – you will get a good premium.

At the time of writing this email India VIX was:
16.84
It is +0.062 or up by 0.37% since last close.

You can see real-time India VIX here:
https://www.google.com/search?q=india+vix+today

The reasons why India VIX is increasing could be due to the elections in Delhi on Wednesday, 5 February 2025.

Usually, state elections do not affect market volatility much. But this is not the only factor.

Donald Trump becoming US President and taking stringent actions on Day 1. His actions included everything from economics to border issues etc. This is a major reason for an increase in India VIX.

No one knows what lies ahead. So there is panic in the markets which has resulted in an increase in India VIX.
Trade with strict stop loss and hedge.

If you want to learn options strategies with proper planning and hedging you can do my paid course.

What is EPS?

EPS is a financial metric that indicates how much profit a company makes for each share of its stock.

To calculate EPS, we must divide the company’s net income by the total number of outstanding shares.

For example, let us assume that company XYZ’s net income is 100,000 and its outstanding shares are 100. Then its EPS is 100,000 / 100 = 1000 per share.

This does not in any way mean that everyone holding its share is making Rs. 1000/- profit per share but it means that the company is earning 1000 per share.

EPS gives a good indication of the financial health of the company but it still does not indicate the future growth of the company.

EPS indicates how much profitable a company is and how much each shareholder would receive if all the net income were distributed as profits. However net income is never distributed as profits but dividends are given on income made.

It is out of the scope of this post to discuss how dividends are calculated. I will post some other day.

Other than the options course I also have a course where I teach how to select stocks to invest for the short term 5-6 months for good returns. Let me know if you are interested.

In this article, I will explain how to set up, and when to use a Double Calendar Spread.

What are Double Calander Spreads?

It is an option strategy where current month options are sold and far / next month options are bought to protect the losses from huge movements. Selling the current month options is the original trade and buying far month options is the hedge trade. The hedged trades act as a protector.

What strikes are used in Double Calander Spreads?

The same strikes for calls and the same strikes for puts are used.

For example, if you have sold a call option of a stock’s 1000 strike of this month, you must buy a call option of its 1000 strike for the next month. And if you have sold a put option of the same stock’s 950 strike of this month, you must buy a put option of its 950 strike for the next month.

When a Double Calander Spread be traded?

When the VIX (volatility index) is low. You can check INDIA VIX here. Trade a Double Calander Spread when INDIA VIX is below 14. Trade it preferably near the expiry of the current month.

When does a Double Calander Spread make a profit?

A double calendar spread will profit when the stock/index expires near the sold call or put option or it can profit if the stock expires anywhere between the sold strikes but the VIX increases.

When the stock expires near the call or the put option sold, this is what happens:

The sold options expire worthless, and the bought option’s total premium would not have lost too much value because one of the strikes would be in profit due to the direction being on its side. The other bought option would not have lost much value since 30 days are still left for the expiry.

As written above, it will also profit if the VIX increases and the stock/index is anywhere between the sold call and put strikes.

When this happens, both the sold options expire worthless. This pair makes good money for the trader. Due to the increase in VIX, the bought options do not lose much due to theta decay. The premium loss is compensated by the increase in volatility. So the profit from selling the options is more than the losses made by buying the options. Overall the trader is in good profit.

When does a Double Calander Spread make a loss?

If on the expiry day, the stock is above either the call or the put sold strikes. However, since there is a hedge (the bought options), the losses are reduced to a large extent.

If the stock moves too early just after the trade, the trader may get panicked and get out of the trade at a loss. Therefore the trade should be planned well in advance. The trader should know the risks involved in the trade before taking the trade.

There is a platform Sensibull – India’s Largest Options Trading Platform which makes a max profit and loss graph of a trade in advance that a trader plans to trade. This is possible only in the paid version of the platform. The paid version costs Rs.800/- per month. However, if you open an account with this broker you get all the paid services of Sensibull for free.

Conclusion:

Trade Double Calander Spreads when you feel that at least till the expiry the stock you wish to trade on is not going to move much. Do not trade Double Calander Spreads near the result season. During the result season, too many speculative trades take place and almost all stocks witness volatility. Also, avoid trading in stocks going through any kind of news either good or bad. Good news will push the stock north and a piece of bad news will pull the stock towards the south direction which is bad for a Double Calander Spread.

Recommended article:

How to trade neutral calendar spreads

P.S.: I have a paid course on conservative option trading strategies. You can see the details here and check the testimonials here. If interested you can WhatsApp me or email me.

For many years country’s strong inclination towards fixed-income investments like FDs and PPFs has not changed much. This is good, however, slowly things are changing which is not good. The new generation even the generation born in the late 90s and thereafter shifted their inclination from fixed and guaranteed returns to very risky investments like cryptocurrencies and short-term investments like equity intraday / few days holdings or derivative trading.

Nothing wrong with this but the problem comes when the investors put all their eggs in one basket.

You will find people who invest everything in guaranteed return investments and then some who have invested everything into equities and/or derivative trading.

Either of the above is not good.

The right approach is a balance of equity, derivative and debt. 50% of your savings should be in debt, 30% in equities long term and the rest can be used for derivatives/crypto/commodities whatever you want to try.

As you can see if you follow the above approach, 80% of your savings will be safe and generate good returns. In such a situation even if that 20% generate or do not generate any returns you will still be safe.

I hope you will follow this approach. Let me know what approach to investing you follow.

If you want to do safe trading you can do my Conservative Option Course. It will make your derivative section of investments safe due to hedge.