Legs: What Gets Traded

The conditions you build say when to act. The leg says what to buy or sell when that moment arrives.

Keep the two apart in your head. A rule watching NIFTY does not mean you trade NIFTY — you almost always trade an option on it.

Type is CE (a call, which gains when the market rises) or PE (a put, which gains when it falls).

Side is BUY or SELL.

These combine in four ways, and it is worth being deliberate: buying a CE and selling a PE are both bullish, but they behave completely differently in risk and margin. Buying costs a premium and caps your loss at that premium. Selling collects a premium and does not.

Strike Selection offers three ways to pick, and all three are worked out fresh at the moment of entry rather than fixed when you save.

• ATM / ITM / OTM with an offset — 0 means the strike nearest the current price. A positive or negative number steps that many strikes away.
• Closest Premium — pick the strike whose price is nearest a rupee amount you give. Useful when you want to spend roughly the same on every trade.
• Closest Delta — pick the strike whose delta is nearest a value you give. Useful when you care about how much the option moves rather than what it costs.

Current Weekly is the contract expiring this week — cheapest, fastest moving, and it loses value quickest as the week ends.

Next Weekly and the monthly options hold their value longer and cost more.

Most intraday strategies use Current Weekly. Be aware that on expiry day itself, a current-weekly option decays very fast.

One lot is a fixed number of units set by the exchange, not by us — NIFTY is 75 at the time of writing, and the exchange changes these occasionally.

Start at 1 while you are testing. The strategy behaves identically at 1 lot and 10; only the money differs.

MIS is the intraday product. Your broker closes anything still open near the end of the day, and it needs less margin.

NRML is for positions carried overnight, and needs more margin.

Match this to your Trade Type. Intraday with NRML works but ties up margin unnecessarily; positional with MIS will be closed out by your broker whether you wanted that or not.

You can add several legs to one strategy, and they all fire together on the same signal.

That is how spreads and straddles are built — a CE and a PE at the same strike, or two strikes forming a spread.

With multiple legs, look at the All or None setting. It decides what happens if one leg is accepted and another is rejected: either keep what filled, or close it and stay flat rather than sit in a half-built position.