Update - 19 October 2018
As expected, Nifty and BankNifty started with a gap down and are now struggling to bounce back.
According to charts alone, 25300 to 25380 seems a good place to short. Since I am skeptical of taking any overnight positions, I might take very little quantity of 2 lots. 1 lot at middle of the day and 1 lot around closing. I might even decide to take only 1 lot as I don't find any compulsion to trade right now.
Greed is not good no matter if the premiums are higher. With the kind of volatility we are witnessing, I will rather take less premium and eat the decay. With little direction, far strikes and less quantity, my overnight position will stay safe till 25 oct 2018.
I am thinking of creating a pure bearish call spread. 25350 would be a good place. From weekly trading perspective, I will be targeting 30 to 40 points.
My position will also depend on the fact that I am shifting my broker. I have made a payout from IIFL. By the time I get my payout and shift it to Upstox, if banknifty is at desired level then only I will short else I will skip.
Update 10:50 am - My point of shorting shifted to 25220 to 25300. Ideally 25250.
Update 1:20 pm- Nifty is down by 1.5% and bank nifty by only .65%. Either bank nifty will help nifty recover or it may give up. Trend is strongly down. On higher timeframe, banknifty never bounced to expected levels and on one step lower time frame it started sliding again. I am taking 2 lots of bear call spread and will hold it till expiry. Hoping market opens down or flat on Monday. Nifty has given up days low and will weigh on bank nifty too.
Update 03:15 pm -
With no obligation to trade, there is not much to do.
Sentiment is bearish for bank nifty.
I took a bear call spread of -2 X 25600 and +2 X 25800. I could not exuecute the buy side at the same time due to which it cost me 4 point more. No matter how market went down, overall position was in brokerage loss. So I sold extra call of -1 X 25900. When market came down, I covered it with minor profit after paying brokerage.
I initiated another bear call spread of -2 X 25500 and +2 X 25700. As of now its not moving as expected. But sensing weakness in market, I am holding it for monday.
I will exit if any thing wrong happens in the coming 2 days. Its a hedged position so there is not much risk.
My open positions looks like this right now: