This is Short Iron Condor on BANKNIFTY Options, specially designed for Intraday option Short traders. This option short BOT is designed to minimize the margin requirement for intraday traders. This strategy can be automated with three Brokers i.e. Aliceblue, Mastertrust and IIFL for now, as and when we integrate other brokers will update you all.
Where the BOT buys OTM call and Put and Short ATM Call and Put. The strategy is designed keeping in mind market is in range bound in 60% days. The Entry is at 09:20 am in the morning and this strategy adjust its Call and Put Short legs automatically based on BANKNIFTY's movement and always remains in hedge position. If the market remains flat or volatile then this strategy performs well, if market becomes compleely trendy then it fails.
To avoid margin conflict, first we buy Call and Put far OTM options, and then Short the ATM options or nearest OTM options. During expiry dates we might short ITM options as well.
Target and SL Logic:
The strategy has a built in Target and Stop Loss. Stop Loss is limited to Rs. 2000/- or 0.5% of premium, whichever is lower. But it changes on Expiry day, on Expiry day we consider more than 5% Stoploss as premium is very low on the day of expiry and has a probability to become Zero on the same day. Target may also vary but, generally around 0.5% of premium price during week days, but it changed on Expiry day, on expiry day the Target increases based on BANKNIFTYs movement. However if the premium price is significantly low then we adjust both StopLoss and Target accordingly.