ATM Option Selling Strategy

ATM Option Selling Strategy – Explained
This strategy is designed for intraday option selling based on the 9/15 EMA crossover, 50/80 MA trend filter, and RSI 50 level. It ensures that all trades are exited before market close (3:24 PM IST).

. Indicators Used:
9 EMA & 15 EMA → For short-term trend identification.

50 MA & 80 MA → To determine the overall trend.

RSI (14) → To confirm momentum (above or below 50 level).

2. Entry Conditions:
🔴 Sell ATM Call (CE) when:

Price is below 50 & 80 MA (Bearish trend).

9 EMA crosses below 15 EMA (Short-term trend turns bearish).

RSI is below 50 (Momentum confirms weakness).

🟢 Sell ATM Put (PE) when:

Price is above 50 & 80 MA (Bullish trend).

9 EMA crosses above 15 EMA (Short-term trend turns bullish).

RSI is above 50 (Momentum confirms strength).

3. Position Sizing & Risk Management:
Sell 375 quantity per trade (Lot size).

50-Point Stop Loss → If option premium moves against us by 50 points, exit.

50-Point Take Profit → If option premium moves in our favor by 50 points, book profit.

Exit all trades at 3:24 PM IST → No overnight positions.

4. Exit Conditions:
✅ Stop Loss or Take Profit Hits → Automatically exits based on a 50-point move.
✅ Time-Based Exit at 3:24 PM → Ensures no open positions at market close.

Why This Works?
✔ Trend Confirmation → 50/80 MA ensures we only sell options in the direction of the market trend.
✔ Momentum Confirmation → RSI prevents entering weak trades.
✔ Controlled Risk → SL and TP protect against large losses.
✔ No Overnight Risk → All trades close before market close.