The Power of Strategic Trading: How Election Result Day Led to a ?559,000 Profit in One Day
On June 4, 2024, the Indian stock market experienced unprecedented volatility, plummeting by approximately 6% due to unexpected election results. While such market fluctuations can be intimidating, they also present unique opportunities for those who are well-prepared and strategic. In this article, I will detail how I leveraged this volatility using the Bank Nifty 52000 and 51000 call write strategy, guided by the Average True Range (ATR), to achieve a remarkable profit of ?559,000 in a single day across various trading accounts on a capital of ?10,000,000 giving 5.5% return in a day with 85% success probability .
For a recording of live trades of this session, check out my video on YouTube: Watch the Trading Video.
Understanding the Strategy
Writing Call Options
The core of my approach involved writing call options on the Bank Nifty index at the specified strike prices. Here's a breakdown of the key concepts:
Average True Range (ATR)
A critical tool in this strategy was the Average True Range (ATR), which measures market volatility by decomposing the entire range of an asset price for a specific period. ATR is instrumental in setting entry and exit points for trades.
How the Strategy Was Executed
Market Analysis
Using ATR to analyze market volatility, it was predicted that the Bank Nifty index would not exceed the 52000 and 51000 levels. This analysis formed the backbone of the strategic positioning.
Position Entry
Positions were entered by writing (selling) call options at the identified strike prices, leveraging the anticipated market behavior.
Risk Management
Continuous monitoring of market conditions was essential. Adjustments to positions were made as necessary to manage risk effectively.
Profit Booking
Positions were closed once target profit levels were achieved, capitalizing on the market's sharp downturn while ensuring gains.
Detailed Trade Analysis
Below is the breakdown of the trades executed across different trading accounts, illustrating the financial impact of this strategy:
| Trade | Total Profit/Loss (?) |
| 1 | 21,969 |
| 2 | 31,357 |
| 3 | 79,308 |
| 4 | 124,017 |
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| 5 | 113,947 |
| 6 | 74,711 |
| 7 | 114,136 |
| Total | 559,445 |
Key Takeaways
Strategic Planning
The effective use of ATR in guiding the call write strategy was crucial in managing risk and capitalizing on the market's volatility. This highlights the importance of robust analytical tools in making informed trading decisions.
Consistent Monitoring
Consistent monitoring and timely adjustments of positions were essential in navigating the rapid market movements on election result day. This underscores the necessity of being vigilant and adaptable in dynamic market conditions.
Profit Realization
The total profit of ?559,000 across various trading accounts significantly exceeded initial expectations, demonstrating the potential of well-executed options strategies even in highly volatile conditions.
Reflecting on Success
This trading success serves as a powerful reminder of the importance of strategic planning, discipline, and maintaining a calm mindset amidst market volatility. While the profits are significant, the journey underscores the ongoing need for continuous learning and adaptation in trading.
To fellow traders and aspiring investors, this experience emphasizes the power of informed decision-making and strategic execution. Even in the most challenging market conditions, substantial gains are achievable with the right approach and mindset.
Let's continue to learn, adapt, and grow together in our trading journeys. Stay motivated, stay humble, and keep pushing forward.
For a recording of live trades of this session, check out my video on YouTube: Watch the Trading Video.
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By sharing this experience and insights, I hope to contribute to the collective knowledge of our professional community, encouraging a culture of strategic thinking and informed decision-making.
As always, thorough research and risk management are crucial. The dynamic nature of financial markets demands vigilance, agility, and a deep understanding of the tools at your disposal. Here's to profitable trading and navigating the election season with confidence!
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Disclaimer
This article should not be interpreted as investment advice. For any investment decisions, consult a reputable financial advisor. The author and publisher are not responsible for any losses incurred by investors or traders based on the information provided.