Inverted strangle option
This intraday NIFTY option-selling strategy sells a call and a put of the nearest weekly expiry at 09:20 and closes them at 15:15. By default the strikes are one step either side of the at-the-money strike, but they can also be chosen by delta. An optional inverted form sells the same two strikes the other way round, both in the money, and optional bought wings turn it into a defined-risk condor.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
In this test choppy sessions did the damage: the 66 trades on wide-range days that closed mid-range lost ₹1,11,061 with a 38% win rate, because the swing in one direction stops one leg and the swing back pressures, and often stops, the other. Quiet sessions made ₹76,315 over 108 trades, as both legs decayed undisturbed. Trend days also earned, ₹47,171 over 69 trades: one leg was stopped early and the other decayed towards zero. Evenings with India VIX above 14.5 lost ₹43,524 over 69 trades, while normal VIX made ₹44,207. Gap-down openings cost ₹25,287 over 40 trades, and Thursdays were the weakest weekday.
About this strategy
- At 09:20, open the option chain of the nearest NIFTY weekly expiry, which falls on Tuesday.
- Pick two strikes: by default the strike one step above ATM and the strike one step below; in delta mode, the call and put nearest to 0.30 delta.
- Normally sell the call at the higher strike and the put at the lower one; with “Inverted” on, sell the call at the lower strike and the put at the higher, so both are in the money.
- If “Wing strikes” is above zero, also buy a call and a put that many strikes further out to cap the loss.
- Each sold leg has its own stop: buy it back if its premium rises 50% above entry. Wings have no stop.
- Close everything still open at 15:15.
Why traders use it
A strangle just outside the money collects a good share of the straddle's premium while leaving a small cushion on each side. Choosing strikes by delta keeps the risk similar whether the market is calm or volatile. The inverted version is a talking point among option sellers: it collects more premium because both legs carry intrinsic value, yet profits over the same range between the strikes. Having all these in one rule set lets traders compare them directly on identical days.
The year in plain words
With default settings (one strike out, not inverted, no wings) on NIFTY from 1 Oct 2025 to 30 Sep 2026, the strategy traded 245 days and won 61% of them, ending ₹13,689 ahead before costs with a profit factor of 1.06. The usual option-selling shape showed: wins averaged ₹1,576 and losses ₹2,345. Only 26 trades hit a 50% leg stop; the other 219 closed at 15:15. February made ₹30,975 and March lost ₹36,804. After ₹20 per order and bid-ask slippage on two legs a day, the result is a ₹24,228 loss.
What the settings do
Risks
- Without wings the sold options have open-ended risk until a stop fills, and fast moves can fill stops well past 50%.
- With strikes just one step from ATM, a normal intraday move can push a leg in the money.
- In the inverted form, a percentage stop on an in-the-money premium is far wider in points than it looks.
- Trading every day with two sold legs makes costs large relative to the thin gross edge.
- Naked option selling needs substantial margin compared with the premium earned.
Who it suits
Intraday option sellers with the margin for a naked NIFTY strangle, or for the winged version, who want to compare strike-selection methods and can tolerate a high win rate paired with larger occasional losses.
Questions traders ask
What is an inverted strangle?
It sells the same two strikes as a normal strangle but swaps them: the call at the lower strike and the put at the higher, so both are in the money. It collects more premium because of the intrinsic value, yet the profit zone between the strikes is the same, and the in-the-money legs move almost point for point with NIFTY.
Is the intraday short strangle profitable on NIFTY?
With the default settings from 1 Oct 2025 to 30 Sep 2026 it made ₹13,689 before costs but lost ₹24,228 after ₹20 per order and bid-ask slippage, before statutory charges. The before-costs drawdown was ₹53,354. Past results do not guarantee future ones.
Should strikes be picked by delta or distance?
Both are available. Distance uses a fixed number of strikes from ATM, so the cushion in points is constant. Delta mode adjusts to volatility, placing strikes further out when options are expensive. Running both on the same period shows how much the choice matters.
What do the wings do?
Wings are options bought further out on each side. They turn the naked strangle into an iron condor, capping the maximum loss and lowering margin, at the cost of paying their premium every day.