There is no rule that is has to be on STDV one. It always depends on what the market is doing, High vola or Low vola, as some times market not even make one STDV. Then you have to even go down to 0.8 or what ever the market does or you even have to go up to 3 or 4 or 5 STDV in extreme markets.
nifty spot price-5910
one standard deviation-around +/-200
strangle strategy-
(1.)considering last range of both side in one standard deviation.
long put 5700 and long call 6100
may be a smart trade
(2.) but is it worth to take position in last range of 2 or 3 standard deviation?
like long put 4400 and long call 7100 or more wide range like 1000-
11000 range as after 2 standard deviation cover 95%.
and 3 stanadard deviation covers 99% and i dont know 4 and 5 standard deviation will also cover rest 1%
this kind of trade if possible, will be innocent or stupid trade.
is itn't?
and ofcouce below one standard deviation ,we can increase winning probablity.
as in indian market 3 month fut exercising ,i dont know about us market or other foreign market.
Last edited: