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How to trade intraday in options during options expiry week since premium will fall even for a small price action. This is for only buying call and puts not for writing. In the money style nifty options are best when expiry is near, simple reason behind this is Nifty options has the premium for time days left for expiry. When the expiry comes near this premium also gets reduced and if you have observed then you will find the all out of money nifty options expire worthlessly i.
If you chose in the money nifty options, they will at least have the real value in it. Like Nifty future is trading at level, nifty call option must have value of at least If Nifty future moves to then nifty call option will be trading at least at But if nifty future is trading at and nifty call options would be at 2 or 3 only and if nifty expires at then nifty call will become worthless at expiry.
Next thing you should check is any important global data that is to be released on that expiry day, if yes then see at what time data will be made publicly available. Because at this time market may give wide swing in terms of nifty it may be about 40 to 50 points, enough to make huge money. If news is bad then just buy in the money put option may be 10 lots, you may notice there is big difference in quantities of call and put option.
This is because traders react slowly to positive news, where as traders reaction towards negative news is extremely vigorous. So there is high amount of risk involved and also there is no guarantee that market will react to global news. We were able to gain extremely high returns on nifty option. Trader should not buy or sell in expiry week. In case of Nifty Index Option, if nifty moves in a range then it's premium decrease rapidly in expiry week.
Better trade in Nifty future in expiry week. To trade in Index Options trader should know about Nifty trend first. Then only you can take any position in call or put option. Nifty trend and Bank nifty Trend is updated daily here for free. First Buy only call or put. On expiry day and next day dont do trading. On expiry day, you may loss whole premium, because it will be ZERO till market closing if you miss the right trade. I would like to share my own strategy, strategy-nifty-expiry.
And be careful after 2: Here is my strategy: This is for only buying call and puts General. Hi Arun In the money style nifty options are best when expiry is near, simple reason behind this is Nifty options has the premium for time days left for expiry.