Understanding Dharmik’s Intraday Strategy

Dharmink’s strategy is purely for intraday trading. This intraday strategy revolves around the following factors:

• Dharmik trades in options primarily by shorting (selling) the first out-of-the-money (OTM) CE and OTM PE
• Puts a stop loss at 40%
• Puts a target profit at 50%

This strategy has a risk-reward ratio properly defined. The strategy’s effectiveness lies with synthetic futures wherein you can infer where strikes can go or what could be a good reward per unit of risk.

The simplicity of Dharmik’s intraday trading strategy is in its simplistic approach. Shorten the OTM call and put options, have a rigid SL and target in mind, and let the synthetic futures decide your trades.

To engage in intraday trading, you must first understand dematerialisation meaning and how to transfer shares from one demat to another online. Knowing these are essential for the effectiveness of intraday trading.

 

What are Synthetic Futures?

The easy guide Dharmik’s intraday trading strategy necessitates understanding synthetic futures because it's a crucial part of the strategy. Synthetic futures are calculated values replicating the futures price for a particular expiry.

They are derived by taking the spot price of the underlying asset and adding on the premiums of both call and put options for a particular strike. Synthetic futures are particularly useful as they can give traders an indication of what the futures price should be for an immediate expiry when no futures contracts exist.

 

How to Calculate Synthetic Futures Value

The synthetic futures value is calculated using the following formula:

• Synthetic Futures = Strike price + Call option premium - Put option premium

For example, if the strike price on a 22,000 synthetic futures contract call premium is 166 and a put premium is 110, the synthetic futures value would be:

• Synthetic Futures = 22,000 + 166 - 110 = 22,056

This calculation will help you as a trader determine the price you would want to look at for your intraday positions. With this calculation in mind, you can use Synthetic Futures to make more smart and educated decisions while trading options.

 

Using Dharmik's Intraday Trading Strategy

To implement the strategy, you must set up parameters like capital allocation, entry time, stop-loss, and target levels. To ensure accuracy in your trades, you'll also need to modify the position builder to use strike prices derived from synthetic futures.

It's imperative to thoroughly test the strategy after it has been established before implementing it in real markets.

Intraday traders deal with high volumes of transactions. Hence, understanding Dematerialisation meaning and having a demat account is necessary. It is also important to learn this process of how to transfer shares from one demat to another online.

 

Conclusion

This easy guide Dharmik’s intraday trading strategy has covered everything you need to learn about the Dharmik strategy. Once you understand synthetic futures and follow some basic rules to set stop loss and target, you can use Dharmik's Intraday trading strategy as closely as possible. Similarly, knowing how to transfer shares from one demat to another online is important for trading.

 

Disclaimer: This blog is posted solely for educational purposes. The securities mentioned are examples and not recommendations. It is based on various secondary sources from the internet and is subject to change. Please consult an expert before making any related decisions.