Option Strategy - Another Practical Analysis

Friends I want to share a strategy based on OPTION. I am a small trader and investor. I share my experience with you through my this online Dairy "tradezy". I am neither here to teach you about trading nor advise you to follow the tips and tricks. I just share my idea with you. Remember friends any strategy or rule is not 100% correct. Let us discuss an OPTION strategy and study for JAN'15 contract of NIFTY.

Look in to "Maximum Pain Theory" excel sheet.

If you study the Open interest of strike prices then you observed that put call ratio is maximum in strike price 7800 and minimum in strike price 8600. So, this indicates that in Jan'15 Future contract of NIFTY may play between 8600 - 7800.

NIFTY FUTURE JAN'15 close at 8277.30, the day(Wednesday,24th Dec,2014) NF Dec'14 expiry. 

Nifty Spot close at 8174.10 on same day.

From above data I consider 8100 as reference strike price.

Now friends watch this chart.

The chart shows that the options of strike price 7600 and 8600 will be worthless at the end of Jan'15 contract.

So, let us watch the prices of 7800PE and 8600CE on Wednesday,24th Dec,2014.

If I look into the price, then It confuse me. A question arise whether I enter LONG or SHORT. Let us analyse more. Watch the following analysis:

I observe that PUT:CALL RATIO is least for strike price 8600 and maximum for 7800. So, it is in my notice that in January 2015 Nifty never breach these levels. I want to make a strategy. Look into  this;

When I make a strategy of "Sell Strangle" with above strike price, then I astonish to found the results. Watch this;

Fine the strategy shows that you may gain around Rs.19975. I want to enter in trade but not in actual money. I make a trial by using "NSE Paathshala". If I success in this strategy then trade with real money.

WARNING: Don't enter trade. It is a experimental strategy. You only watch the follow up posting and its progress.