Monthly put write on EMA cross
This positional strategy writes a NIFTY monthly put only when two conditions line up: the trend has just turned up, shown by the 5-day EMA crossing above the 10-day EMA, and implied volatility is in the upper half of its recent range. The idea is to sell downside insurance when the market looks supportive and the premium on offer is relatively rich.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
Five trades are too few for any condition to be judged, but they behave exactly as a short put should. The two trades held while NIFTY rose more than 1% both won, making ₹17,280 together, and the one held through a flat market made ₹7,457. The two held while NIFTY fell more than 1% both hit the stop, losing ₹30,677: the crossover had signalled a new uptrend that did not last, and the 30-delta put doubled in price as the index fell and volatility rose.
About this strategy
- Each day, check whether the 5-day EMA of the NIFTY futures close has crossed above the 10-day EMA at that day's close.
- At 15:15 the same day, read the ATM implied volatility of the nearest expiry with at least 7 days left and rank it against past readings; the IV percentile must be above 50.
- If both hold, at 09:20 the next session sell one lot of the roughly 0.30-delta put of the nearest monthly expiry with at least 15 days left.
- Take profit once 80% of the premium has been earned, or stop out when the loss equals the premium collected.
- Otherwise close at 15:15 on the first trading day at least 15 calendar days after entry, or on expiry day if that comes first.
- Only one put is open at a time; the next crossover starts the next trade.
Why traders use it
Selling puts profits if the market rises, stays flat or falls only a little, so it suits a mildly bullish view. A fresh EMA crossover gives a simple trend trigger, and the IV percentile filter avoids selling when premiums are cheap. A 30-delta put sits comfortably below the market, and exiting after about two weeks takes most of the decay without carrying the position into the volatile final days.
The year in plain words
From 1 Oct 2025 to 30 Sep 2026 on NIFTY the two filters lined up only five times. Three trades won and two lost, for a ₹5,940 loss before costs and ₹7,240 after ₹20 per order and bid-ask slippage. Two trades hit the 80% target, including the best at ₹11,388 in April 2026, one closed at the 15-day exit and two were stopped. Those two stops, in June and July 2026, lost about ₹16,900 and ₹13,750, which outweighed the three winners. Typical of put writing, the losers were larger than the winners. Five trades is too few to judge the rules.
What the settings do
Risks
- A short put can lose much more than it collects if the market drops sharply; the stop at 100% of premium helps but gaps can jump past it.
- Positions are held overnight for up to about two weeks.
- The IV percentile is built from the backtest's own chain readings, and its history is limited at the start of the period.
- With so few signals a year, results depend on a handful of trades.
Who it suits
Patient positional traders with a mildly bullish bias and margin for a naked monthly put, who are happy to wait weeks between trades.
Questions traders ask
What is put writing?
Put writing means selling a put option and collecting its premium. The seller keeps the premium if the market stays above the strike, but must pay out if it falls below. It is a bullish-to-neutral trade with limited profit and large downside risk.
Did the EMA crossover put-writing strategy make money?
Not in this backtest. On NIFTY from 1 Oct 2025 to 30 Sep 2026 it took five trades and lost ₹5,940 before costs and ₹7,240 after ₹20 per order and bid-ask slippage. Statutory charges were excluded. Five trades say little, and past results do not guarantee future ones.
What is IV percentile?
It shows how today's implied volatility compares with its past readings. An IV percentile of 70 means IV was lower than today on 70% of earlier days. Option sellers often wait for high percentiles so the premium they collect is richer.
Which expiry does it sell?
It sells the NIFTY monthly expiry, which falls on the last Tuesday of the month, choosing the nearest one with at least 15 calendar days left. It then exits after about 15 days or at expiry, whichever comes first.