Why Gain/loss ratio is important that the batting average • More than the Win Loss ratio check the total Gain /loss ratio • If your avg loss is 1% and avg gain is +5% then even if you are losing in 7 positions and winning in 3 out of 10 still you will be net profitable

Treat Trading as a business: • Stick to a single strategy. Eg: A restaurateur usually wouldn’t be changing his recipe on a daily basis • Mitesh Sir only works on BO or BD strategy, as he is a versatile trader

• Any trader should atleast experience 3 scenarios i.e. bull, bear & consolidation • Target 4% per month i.e. 48% p.a. • Option buying requires skill, everyday there wont be huge momentum, so buying options won’t yield good results, but high chances of falling into a bad habit

Stock Selection: • In F&O segment there are ~150 stocks • Not everyday all stocks will move • Only 5-7 stocks move upside or downside • Focus only these momentum stocks • Check which one is moving • Range BO/BD never disappoints. BO/BD from a rectangle (consolidation)

• Recent example: Hindalco, Tata steel & Sunpharma • Trade only in trending stocks • Mostly in the first hour itself movement can be seen • Post market work is to check the range of the stock & whenever they are near the BO/BD one should add them into watchlist & monitor it

• Remember the levels of BO or BD of such stocks • By 9:07 i.e. the pre-open one can get the pre-opening rates of the stocks • Check the ones that are near BO or BD and then add them to watchlist

Focus only on High Momentum Stocks: • Even if you lose on 7 out of 10 and make on 3, with max loss of 1% of total capital when you lose & make 5-7% on the winners you are still net profitable • Stocks after BO or BD usually moves in the range of 5-7-10%

• Lets say if the entire capital is tied up to a single position then always hedge • Traders having modest capital should always go with hedge or rather trade in cash to keep the risk under check • In intra day one can stick to SL

• However for overnight positions, given the gap up /down risk SL won’t protect • Mitesh Sir never hedges his position as he is disciplined enough to take a position only post a BD or BO

Strangle/ Straddle in Stocks vs. Index • In stocks never attempt straddle or strangle as the stock can move suddenly and unlike index stocks can move > 10% and beyond in F&O segment • In such cases, one has to just exit with SL only

• Mitesh Sir prefers selling options without hedge as he is a directional player • In index weekly or monthly options are preferable • For learning, one can try only in cash given the position sizing & risk management

• The real litmus test is when a trader is profitable in all 3 scenarios i.e. Bull, Bear & Consolidation • At the age of 38 years Mitesh Sir started as a full time trader after gaining experience for 3-4 cycles of the 3 situations (Bull, Bear & consolidation)

• He started with a target of 1% per week by focusing on weekly options • He started in Dec 2017 with a capital of 45 lacs and made it to 70 lacs in a span of 3 months with a full time job

• Mitesh Sir’s 90% of the capital is allocated for option selling (positional), balance 10% for adjustments or for future trading

For new traders having a small corpus fund of 2-5Lakhs • Earlier there was a benefit of leverage, • Now as per the norms leverage has been done away with • So one is forced to play intraday

• Intraday trading in option selling means finding direction only as theta decay can be captured only in Positional/overnight • Hence Better to opt for option buying instead of selling if one has a skill in finding direction • Buy options with SL in intraday.

• If you want to play positional, then time value is your best friend • Find the range in index. He would prefer index because in stocks whenever there is BO or BD stock moves by 5-7-10% • In index he has witnessed 1 upper circuit and 2 lower circuits only so far

• During the Covid crash, Mitesh Sir had already found the direction during the lower circuits that's why he didn't have any puts that time and he got saved • Probability of a big move is less in Index, unless any mega events i.e. elections, Demon, lockdown, 3rd wave (if any)

• If one is scared then go with hedge • If you're satisfied with less profit but prefers more mental peace then hedge. • Mitesh Sir doesn’t prefer hedges as his profit gets limited

Preference to Bank Nifty over Nifty • Nifty adjustments are very difficult given the low premium. Bank nifty has multiple strikes so easy to adjust • Nifty has less theta component in it • In nifty you'll have to make a straddle and then inverted strangle it's that difficult

• Nifty has low probability of big move, however oflate, even Nifty is becoming volatile

Should an aspiring trader focus on one thing or should attempt everything? • Some traders only sell options • Some only buy • Some only do intraday futures • Everyone has different skill

• Mitesh Sir does everything as he is highly skilled, and this skill he has honed after paying huge sum to the market as fees • He does everything • His skill is more in selling than buying options, so whenever he buys options he only puts 2% of his capital

Whenever there is a BO what should be done from the list of options: buy fut, buy call, or write deep ITM PE? • Preferably buy a future over buying a Deep ITM CE if one wants to gain 100% absolute as futures do not have a time value component, they move lock step vis-à-vis spot

• Check probability eg: sunpharma, if he gets 2% by put sell then he'll do that

How to sell in Bull and bear market & how to identify direction? • Bull market means direction is clear. Wherever the fresh breakout starts one can sell that option with full capital also and make 2%.

• Lets assume market gaps up & crosses 35k under current scenario he'll prefer to sell 34600PE • Next day again if it again gaps up and goes up he will sell last day closing price strike put to gain more after squaring off the previous put

• On the other hand, lets say the market again comes down after going above 35600 he would prefer to sell 35600 CE as that is the resistance • And that’s how he identify the range • With practice anyone can learn this, so practice is the only key to the success

Straddle or strangle which one to sell? • Sell strangles as we're in a range • If market goes up near the resistance you can try with straddle selling there as market may halt for 2-3 days there before taking the level out • If resistance crossed then go single side only

• Intraday decay doesn't happen much • Better play positional • He doesn’t prefer Intraday straddle or strangle