2% monthly return using Covered Call strategy in NIFTY BEEs:

How can one do it and beat FD returns and mutual funds with ease?

Step by Step explanation:

Hope it's helpful to someone.

A thread 🧵

1/ Covered Call? What is it?

It is strategy  which involves buying the index/stock and shorting a call near ATM.

When you buy a stock you make money only when the stock goes up.

Covered call takes the game to another level.

You can make money if stock goes sideways too.

2/ Well why am I doing it?

Without doing anything I will get 1-2% (12% annualised) returns on my capital.

Bye Bye to FDs.

You don't need to be an option geek or sit infront of terminal full day to do it.

Just need 5 mins every week to make this return.

3/ How am I doing it?

Step 1: Find quantity of NIFTY BEEs you need to buy.

For that find contract value of NIFTY ATM contract.

NIFTY was trading at   18750 when I was buying BEEs. The contract value is 18750*50 = 937500.

(One lot size in NIFTY is 50)

4/  NIFTY BEEs was selling at 206.1 Rs.

I bought 4550 qty so that the total value of NIFTY BEEs is same as contract value.

You are doing this to ensure your exposure in NIFTY is compensated by selling call.

This will ensure your portfolio won't bleed during violent up move.

5/ Step 2: Sell July Month expiry 19000 CE at 204.45 Rs.

Why July month expiry? More premium.

Why 19000 CE, you ask?

It is a strong resistance according to technical and Open Interest analysis.

If NIFTY moves down I can roll down the call.

6/ Now the pay off looks something similar to this.

You can see there is substantial loss it there is a down move.

7/ Step 3:

For downside insurance deploy put butterfly.

Buy 1 Lot of 18000 PE, Sell 2 Lot of 18300 PE and Buy 1 Lot of 18600 PE.

The payoff of put butterfly will look like this.

It will compensate your loss (to an extent) in case NIFTY moves below 18600 level.

8/  Scenario 1 at expiry: By end of July NIFTY close at 19000.

NIFTY Bees profit: 12,740 Rs
Call Sell: Profit of 10,222 Rs
Put butterfly loss: 2000 Rs

Total profit: 20,962 Rs

9/ Scenario 2: By end of July NIFTY close at 19300.

NIFTY Bees profit: 26390 Rs
Call Sell: Loss of 4750
Put butterfly loss: 2000 Rs

Total Profit: 19640 Rs

10/ Scenario 3: If NIFTY falls to 18500

NIFTY Bees Loss: 10,465 Rs
Call sell profit; 10222 Rs
Put Butterfly profit: 4000 Rs

Net Profit: 4250 Rs


11/ Ok. What about adjustments in this strategy?

The best adjustment you can do is : Do Nothing.

If you believe that Indian markets will go up longterm, think of dips as an opportunity to invest at cheaper rates.

12/ If market moves down, you won’t be hurt much till 18000 level since put butterfly is there.

If market moves up and you believe it will continue to do so you can roll up your calls.

I thank @Suresh_kumar047 for sharing this strategy.

13/ You can pledge the NIFTY BEEs for margin and use the margin for trading.

If you enjoyed this thread, then:

→ Follow me @sabareeshmdas for weekly info like this.


You can read the unrolled version of this thread here: https://typefully.com/sabareeshmdas/fT5Asrv

Covered Call Strategy: Beating FD Returns and Mutual Funds

 I am starting 1000 Day Full Time Trader challenge.



In 1000 Days I will quit my day job and become a full time trader.

This is how I will do it:


I am starting with a capital of 14 Lakhs.


I will try to achieve over 30% return every year.


By end of 1000 days I hope my trading income comfortably covers my expenses.


Why am I doing this?


1. Accountability: By sharing my trades here I can be more accountable in trading


2.Networking:  I would love to connect with like minded traders.

Day 1 update:

Positional Trade: I have a entered 1600 point delta neutral strangle in NIFTY by shorting 19500 CE and 17900 PE in July month expiry.


As hedges I have bought same strike price Call and Put options in June 22 expiry.

The POP of this strategy is 90% and RR is about 1.

I am targeting 2-3% monthly income on my capital using this strategy.

If you want to follow my journey do follow @sabareeshmdas



1000 Day Full Time Trader Challenge

How I made 2.1% of my capital today, trading FINNIFTY expiry?

#VerifiedBySensibull https://verified.sensibull.com/ps/outlying-chairlift/GjfjVqRYKjuqQW


 I entered in 600 points strangle (17700,18300) in FINNIFTY at 0940 hrs.

Why did I enter a short strangle?

The premiums were juicy (I was getting 20 points on 600 point strangle on expiry day!).


The first 25 mins price action indicated a neutral view.


At 1035 hrs I rolled on my puts from 17700 to 17800 as the price action indicated that FINNIFTY has made day's bottom and is moving up slowly.


Later I rolled on my puts from 17800 to 17900 and then to 18000 as the market kept moving higher.

I rolled 18300 calls to 18250 at around 1230 hrs making it a 250 point strangle (1800,18250).

All these bets paid off.


I was sitting at close to 3% profit for the day at around 1330 hrs.


The fall in FINNIFTY around 1415 hrs spiked 18000 PEs pushing me out of the trade and hit the SL.

This is my 1st month into trading and today is the biggest profit day til date (I started trading with a capital of Rs 4.4 Lakhs on 1st Jan 2023).

Performance on first month of 2023:

Profit:Rs 25.66 K

Capital: Rs 4.4 Lakhs

ROI (January): 5.8%

Trading FINNIFTY with a Short Strangle Strategy

7 Step process to learn Option trading from scratch  (without enrolling in any paid courses)

Hop in👇

Disc: I don’t claim to be an expert “trader”. If you are starting out and confused, I can make your journey easier.

Step 1

Have the right mindset.



 Trading can’t make you rich overnight. Don't run behind those "fake traders". You need to put in your time and effort to become good at it.



The best traders out there make a profit of about 50% of their capital.


Step 2

Understand that trading is not complex.


Approach it like a game.


Option Trading is composed of two things.  One, You should have a view. (Ex:NIFTY will go up by 100 points today). Second, a strategy to get maximum profit out of the view minimising the risk.

Step 3


Learn the rules of the game before you play.


Understand what, why, when and how of options. Also learn basic technical analysis and OI analysis to form a view.



By basics I mean reading candlestick, support, resistance etc. (Don't run behind indicators and stuff)

Use Zerodha varsity for technical analysis (https://zerodha.com/varsity/module/technical-analysis/) and Option strategies(https://zerodha.com/varsity/module/option-strategies/).



Refer Sheldon Natenberg book to understand Options better. (https://www.amazon.in/Option-Volatility-Pricing-Strategies-Techniques/dp/0071818774)

I found @abidsensibull Daily Market analysis helpful in forming a view and employing option strategies based on your view.

Observe how he does it and then try yourselves.
 (https://www.youtube.com/watch?v=zIWJ3Qm-AL8&list=PLkxTRam6E2V9e8czMzthvp0Cx_JXPPQhM)

Step 4


Learn Risk Management and Behaviour Psychology.

This is what differentiates between a bad trader and good trader. @BandiShreyas explains how edge for a trader lies in risk management.

A Must watch.
https://www.youtube.com/watch?v=xMMvnHnLzp4&t=568s

Step 5


  Once you learned the rules of the game, start practising. Do paper trading using apps like sensibull (https://web.sensibull.com/virtual-trade)

Step 6


  Once you are confident enough start the real game. Use minimal capital (I used Rs 1 Lakhs) and experiment with different option strategies in NIFTY.

Step 7


Track your trades. Analyse them. See what went right and what went wrong. Use this feedback when you execute the next trade.


I use a excel sheet to track my trades.

Follow these steps. Strive to improve everyday. Be curious. Put in the time.

Good Luck trading


If you found this thread helpful, please RT the first tweet and help others find this thread


Follow me at @sabareeshmdas