VIX spiked up by 8% yesterday. It may spike up further next week.
One may use high VIX for trading nifty options.
Current nifty spot level is 6700. 10 % upmove will take it to 7370. 10% downmove will take it to 6030.
If one sells May 7500 CE for 31.1 and 6000PE for 38.4, the trade would be delta neutral.
Assuming margin of 1,00,000 for two lots, inflow would be 6,900 or 6.9%.
With 19 trading sessions to go, if nifty expires between 6000 and 7500, one can make 6.9% in less than four weeks.
Upper and lower BEPs would be 7570 and 5930 respectively.
I think this would be fairly safe trade for a conservative trader.
One may use high VIX for trading nifty options.
Current nifty spot level is 6700. 10 % upmove will take it to 7370. 10% downmove will take it to 6030.
If one sells May 7500 CE for 31.1 and 6000PE for 38.4, the trade would be delta neutral.
Assuming margin of 1,00,000 for two lots, inflow would be 6,900 or 6.9%.
With 19 trading sessions to go, if nifty expires between 6000 and 7500, one can make 6.9% in less than four weeks.
Upper and lower BEPs would be 7570 and 5930 respectively.
I think this would be fairly safe trade for a conservative trader.