NIFTY and Bank Nifty Algo Trading: Why a Strategy Built on Bank Nifty Weeklies Will Not Port Straight to NIFTY
Many Indian option sellers built their first strategy on Bank Nifty weekly expiries. For a few years that was the most active weekly contract in the country, and a lot of backtests, courses and shared templates were written around it. Those weekly contracts are gone. The surviving weekly expiries are NIFTY on the NSE and SENSEX on the BSE. So a large pool of old rules now needs a new home. The…
When Indian option sellers created their first strategy using Bank Nifty weekly expiries, they found it was the most active weekly contract in the country. However, those weekly contracts have now disappeared, and NIFTY and SENSEX have become the surviving weekly expiries on the NSE and BSE, respectively. Consequently, many traders are now faced with the task of adapting their old rules to fit the new indices.
While the entry time and logic may remain the same, the numbers within the rules will not, leading to potential risk changes without any alterations to the logic. This article focuses on recalibrating a strategy for a different index, using a worked example and step-by-step procedure.
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