Supertrend band option write
A slow, positional option-selling strategy. A daily Supertrend on NIFTY decides the side: after it turns up, the strategy sells a put; after it turns down, a call. The Bollinger Band decides how far out: the strike is the first one beyond the opposite band, so in volatile markets it sits further away. The option is held on the monthly expiry until the trend flips, the premium doubles, or expiry approaches.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
With only 14 trades, no market condition reached the eight trades needed to call it a strength or weakness, and in this test every bucket was profitable. The 6 trades during which NIFTY stayed within ±1% made ₹26,144 with no losses, as the far option simply decayed. The 4 trades during which NIFTY rose more than 1% made ₹5,937, and the 4 during a fall of more than 1% made ₹15,551: because the strike sits beyond a Bollinger band, the market had to travel a long way before it hurt. Choppy entry days (₹26,338) and quiet ones (₹21,296) both did well.
About this strategy
- Each evening, compute a 10-day, 2× Supertrend and 20-day, 2-standard-deviation Bollinger Bands on daily bars of the NIFTY future.
- If the Supertrend flipped at the previous close, act at 09:20 the next session.
- After a flip up, sell the first listed put strike below the lower band; after a flip down, sell the first call strike above the upper band.
- Use the nearest NIFTY monthly expiry with at least 10 calendar days left, one lot.
- Stop out if the option's premium doubles.
- Close when the Supertrend flips the other way, checked once a session at 09:20, and sell the new side straight away.
- Otherwise close at 15:15 one trading session before expiry.
Why traders use it
Selling options in the direction of the trend means the market has to reverse sharply before the short strike is threatened. Using the Bollinger Band to place the strike adapts the distance to recent volatility, instead of a fixed number of points that is too close in wild markets and too far in calm ones. Monthly options give more premium and slower, steadier decay, and a daily signal means only one or two trades a month.
The year in plain words
On NIFTY from 1 Oct 2025 to 30 Sep 2026 with default settings, the strategy made just 14 trades, about one a month, and won 12 of them for ₹47,633 before costs. The two losers averaged ₹2,177, the largest drawdown was ₹2,325, and eleven of twelve months were positive. Nine trades ran to the pre-expiry exit, four were closed by an opposite flip, and only one hit the premium-doubled stop. With a single leg and few orders, costs barely mattered: the after-costs result was ₹46,615. The sample is small, and naked short options can lose far more than this year's worst trade.
What the settings do
Risks
- A naked short option can lose many times its premium on a gap, far beyond the doubled-premium stop.
- Fourteen trades is far too few to judge reliability; one large loss would change the picture.
- The rolled futures series jumps at monthly rollovers, which can flip the daily Supertrend without a real trend change.
- Positions are held overnight and over weekends, so global news can move the market before any exit.
Who it suits
Positional option sellers who want a low-frequency, rule-based routine with one decision a day at most, the margin for a naked monthly short option, and the discipline to hold through weeks of small moves.
Questions traders ask
How do you sell options using Supertrend and Bollinger Bands?
The daily Supertrend sets the direction: bullish means sell a put, bearish means sell a call. The Bollinger Band sets the strike: the first strike beyond the lower band for puts or the upper band for calls. The option is held until the trend flips, the premium doubles or expiry is a session away.
Is the Supertrend Bollinger option selling strategy profitable?
In this backtest on NIFTY from 1 Oct 2025 to 30 Sep 2026 it made ₹47,633 before costs and ₹46,615 after ₹20 per order and bid-ask slippage (statutory charges not included), from only 14 trades. That is too small a sample to rely on, and past results do not guarantee future ones.
Why use the monthly expiry instead of the weekly?
A daily signal can last several weeks, so a monthly option fits the holding period. It also collects more premium for a strike far from the money, and its decay is steadier than a weekly option's last-day collapse. NIFTY monthly options expire on the last Tuesday of the month.
Why is the strike placed beyond the Bollinger Band?
The band marks roughly two standard deviations of recent daily closes. A strike beyond it needs an unusually large move to be threatened, and because the band widens in volatile markets, the strike automatically moves further away when risk is higher.