SBER SMI can be used for swing analysis on higher time frames (check recommendation for new users).
- Do not leave position unhedged overnight.
- Select strike carefully. Far OTMs selected for swing trades can be highly risky for option buyers.
- Prefer to select expiry which are at least 8 to 10 days far at any time.
- For stocks options, it has been observed that theta decay accelerates between 11th to 20th of the month. Plan your trades carefully.
- If plan to hold trades for say around 6 days and every day movement of a stock is average at 20 points (check SBER PEC tool for planning swing trades), then buying options with extrinsic or time value above 60 rupee (days X PEC value / 2) can minimize returns. Plan your trades carefully.
- Exit the trade if any trading condition is interrupted.
Do not trade options if textual information reads “Abrupt indecisive moves expected” or “Info NA”