ashishgupta325
ashishgupta325
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ashishgupta325

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Full time trader | Options/Volatility Trader | Blogger

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Joined on 8th September 2025

ashishgupta325
Feb 06, 2026Public Post
If you are trading index options, try and observe this - If Index is going up, OTM puts will also go up, far OTM will go even more up. So, a good trade structure at that point is to buy 2-3 strikes OTM put option and sell those hefty OTM puts that gained value. The trade can be at cost or some debit or even credit depending on the distance from ATM. I traded put ratio today on this recent upmove to 25600-25650. The trade was 1 lot 25500 put long and 6 lots 25k puts short at a cost. Check attached chart of this strategy. As the index came down 25500 put went from 60 to 80 while 25k put went from 10.7 to 10. Both legs yielding money. Point 1 in attached chart is 12 PM when index was trading at highs of 25650 and point 2 is when index went back to 25550 or below - Doesn't mean I entered/exited at exactly on point 1 and 2 :) Same happens when index goes down. OTM call options rise in value while near ATM go down. If you create similar structure, it will yield intraday. Risks Involved - ... see more
If you are trading index options, try and observe this - If Index is going up, OTM puts will also go up, far OTM will go even more up. So, a good trade structure at that point is to buy 2-3 strikes OTM put option and sell those hefty OTM puts that gained value. The trade can be at cost or some debit or even credit depending on the distance from ATM. I traded put ratio today on this recent upmove to 25600-25650. The trade was 1 lot 25500 put long and 6 lots 25k puts short at a cost. Check attached chart of this strategy. As the index came down 25500 put went from 60 to 80 while 25k put went from 10.7 to 10. Both legs yielding money. Point 1 in attached chart is 12 PM when index was trading at highs of 25650 and point 2 is when index went back to 25550 or below - Doesn't mean I entered/exited at exactly on point 1 and 2 :) Same happens when index goes down. OTM call options rise in value while near ATM go down. If you create similar structure, it will yield intraday. Risks Involved - Flash crash, broker glitch, etc. So I won't trade degen size. We can't hedge the trade by buying even farther OTM options because they too gain a lot of premium and the trade becomes messy. So trade intraday about 4X exposure of account size and can keep some SL for OTM options which could be spread. For ex - in this case it could be spread from 20 to 30.