Gamma Blast Strategy | Expiry Day Trading Strategy | Zero Hero Trede | #stockmarketanalysis

[00:02] ? We will learn this. We will also understand how a premium of ₹10 reaches ₹100 on the expiry day and how we can make good profits by trading on the expiry day. In this video I will also share my strategy on

[00:14] how I trade on the expiry day. This video is going to be very important for traders. So, before moving ahead, please like this video and subscribe to the channel in the future I will keep bringing such information videos for you. First of all let

[00:26] us understand what a gamma blast is. Many times on the day of expiry, the premium of ₹10 suddenly goes up to ₹100. But many beginner traders are not aware of the reason behind this.

[00:39] So let's look at it like gambling and call it Zero Hero Trade. But the reason behind this sudden sharp movement in the premium is the gamma blast which suddenly increases the premium. So let us know why gamma blast occurs.

[00:51] To understand Gamma Blast, we need to understand the two Greeks Delta and Gamma. understand the two Greeks Delta and Gamma. Delta is an important Greek of options which tells how much the premium of the option will

[01:03] change. For example, if there is a movement of one point in the price of Nifty or Bank Nifty, then how much will the premium increase. Talking about call options, they are always measured between 0 and 1. Whereas put option is measured between -1 to 0. Let us look at this as an

[01:17] example. Suppose Nifty is currently trading at 25,000 levels and you have a call option with a delta of 0.75. This means that if the price of Nifty moves by one point. For example, if 25,000 becomes 25,0001,

[01:32] then your option premium will change by 0.75. That means if Nifty increases by 100 points , your option premium will increase by 75 points. Suppose you have bought a call option on Nifty at a strike price of 25,000 , the premium of which is

[01:46] , the premium of which is currently Rs 100 and the delta is 0.75 and Nifty increases from 25,000 to 25,100, then your premium will increase from 100 to 175. This is how delta works in options. What is gamma? Now let us understand gamma. Just

[02:01] as delta increases the option premium , gamma increases delta. Let us understand with an example. For example, suppose the gamma in Nifty is 0.005 at the level of 25,000. suppose the gamma in Nifty is 0.005 at the level of 25,000.

[02:16] then the value of gamma will be 100 times the value of text gamma. That is, 0.005 value of text gamma. That is, 0.005 times 100 = 0.5 and the value obtained is added to the value of delta. That means the value of delta 0.75 will be

[02:30] That means the value of delta 0.75 will be added to the value of gamma 0.5 = 1.25. And if the market moves by 100 points, then our premium will change by that much. This might seem a bit complicated to you because we

[02:43] cannot do so many calculations in the live market. So please understand whatever I have told you once because there is no need for so much calculation in the live market. Let us understand this in simpler language. Out of the money (OTM) has the lowest gamma.

[02:56] At the money ATM has the highest gamma and as the price moves deeper into the money ITM, the gamma value starts decreasing. Delta is lowest when the price is out of the money and increases in value as the price moves in the money.

[03:11] Why does gamma blast occur on the day of expiry ? Let us understand why gamma blast occurs on the day of expiry. You need to know that there are big players behind the gamma blast. If they sell or buy in very heavy quantity then

[03:24] such a big move occurs. That means the market sharp spike in the premium also. Let us now know how we can trade Gamma Blast.

[03:36] Gamma blast occurs mostly between 2 and 3:00 pm on the day of expiry. If you want to understand it deeply then you will have to think from the mind of the operator. He buys it at a cheap price. They make profit by selling it at a higher price. Similarly, on the

[03:50] you should never make an entry at an increased price. Meaning, if the price suddenly increases with a spike, the premium of Rs 5 or Rs 10 suddenly reaches Rs 30 or Rs 40. And if you make an entry in the middle then you may have to take a huge loss.

[04:04] So whenever there is a spike in the price, you should always wait for a retest and let the price become a little volatile. Then you can make your entry. Let us now know can make your entry. Let us now know

[04:17] An Understanding Time Decay Theta Decay Time Decay, also known as Theta Decay, is very fast on the expiry day. If you do not know about Theta Decay then you can understand it like this, Theta is the biggest enemy of option trading. This

[04:31] reduces the cost of your premiums over time. Theta is particularly high in OTM positions and its impact is greatest on the expiry day. That is why, if you are holding an OTM option on the day of expiry, you should be careful. If you want a complete video on Theta DK then you

[04:44] careful. If you want a complete video on Theta DK then you profits, you should square off your position a few hours before expiry because the market is unpredictable in the last 30 minutes and whatever

[04:57] profits you may have made may also be wiped out because in the last few hours of expiry, closing their positions due to which there can be a sudden change in the price. To avoid such volatility, if profit is being made then it should be booked early.

[05:10] Three Focus on ATM options. At the money ATM options offer good trading opportunities as they approach expiry. ATM options are those whose strike price is close to the current market price. These options have the

[05:23] highest liquidity and are more impactful on price movements. This gives you good trading opportunities as these options are sensitive to the direction of the market. ATM options offer the potential for quick profits.

[05:35] But exiting on time is equally important. Four: Avoid high volatility in the last hour. The market becomes very volatile in the last hour of expiry. During this time, many traders are squaring off their positions,

[05:47] which can lead to sudden major price changes. If you are not an experienced trader, taking new positions at this time can be risky as you may find it difficult to understand the market movements or may end up incurring losses at the last moment.

[06:00] Therefore, one should avoid taking too many trades in the last hour. Otherwise, the profits you made earlier may also be lost. Five Always Follow Risk Management. It is very important to follow risk management in trading.

[06:15] management should never be forgotten. You get tempted by the thought that this trade will multiply your money 10 times. Never invest your entire capital because expiry means end. There are only two out of 10 expiries where your premium can be 10

[06:27] times. So if you trade by following the rules of risk management, then you can make good profits even on the day of expiry. If you don't know already made a dedicated video, the link of which I will provide in the description.

[06:40] From there you can learn risk management and I have also told you how to make profit with a small capital. Six keep an eye on open interest, OI open is an important indicator in the options market that shows how many positions are currently open. It is important to

[06:55] keep an eye on the changes in open interest on the expiry day as it can help you understand where large traders are building their positions. If the OI is increasing significantly at a particular strike price, it could indicate that there is

[07:07] significant trading activity at that price level. This can help you predict which direction the market may move. By keeping all these points in mind, you can take better decisions while trading on the expiry day and

[07:20] reduce your risk. So friends, do tell us in the comment section how you liked this video want a video on any topic related to trading, you can also comment.