💫 Practical option plays · Defined risk
Weekly hedged strategy
Sell a weekly OTM strangle and buy further-OTM protective wings — essentially an iron condor entered mid-week. Defined risk, positive theta, bounded loss.
Setup
- Instrument: Nifty (Tue expiry) or Sensex (Thu expiry) weekly options
- Entry timing: 3-4 trading days before expiry — long enough for theta to work, short enough to avoid too much gamma
- Sell OTM strangle at ~1.5% OTM strikes; buy protective wings at ~2.5-3% OTM
- India VIX below 18 preferred — richer premium without ridiculous tail risk
Entry
Simultaneously (multi-leg order): sell 1 OTM call + sell 1 OTM put + buy 1 further OTM call + buy 1 further OTM put. Net credit received.
Exit
Take profit at 50-60% of max credit. If tested (short strike breached), close before wing distance turns against you. Full exit no later than the day before expiry.
Stop-loss
Loss ≥ 200% of net credit received — close entire position. Wings limit max loss automatically, but discretionary earlier exits preserve capital.
When it works
- Range-bound weekly regime with no major events (RBI, budget, expiry Fri)
- India VIX 12-16 — premium adequate without being crisis-inflated
- Multi-week win streaks funded by disciplined 50% profit exits
When it fails
- Trending breakout weeks that punch through short strikes
- Event weeks where IV spike pumps premium against you before theta helps
- Holding to expiry day gambling on pin — gamma spikes destroy the R:R
General trading rules that apply
Regardless of the specific setup, these apply to every strategy on this site:
- Never risk more than 2% of your account on a single trade
- Place a hard stop-loss before entering — no exceptions
- Journal every trade: setup, reason, outcome, one lesson
- After two consecutive losses, stop for the session
- Backtest and paper-trade for a month before deploying real capital
Every strategy here is an educational description of a widely-known technical setup. Past behavior does not guarantee future results. The chart above uses synthetic price data generated for illustration — real market behavior varies. Backtest, paper-trade, and size responsibly before risking real capital.