Discover effective intraday options strategies, how to manage risk, and choose trades based on volatility and market structure.
Intraday options trading focuses on capitalizing on sharp price movements within the same trading session. Since the holding period is short, typically within the same session, factors like time decay, intraday volatility, and liquidity become pivotal. Traders often rely on a combination of technical indicators, real-time news, and options chain dynamics—like Open Interest (OI) and implied volatility—to time entries and exits precisely and optimize risk-reward ratios.
Lower Capital Requirement
Options offer significant leverage at a fraction of the cost required for equities or futures, making them accessible for small-capital traders.
Defined Risk
Buyers of call or put options face a maximum loss equal to their premium paid—providing a clear understanding of downside risk.
Exploit High Volatility
During economic data releases, earnings, or global market events, options can move rapidly, enabling traders to capture outsized intraday returns.
Ideal when implied volatility is subdued but a breakout is anticipated:
Buy an ATM (at-the-money) call and put it simultaneously.
Profit potential exists for sharp moves in either direction, but time decay works against holding this strategy too long.
As per SEBI margin rules, buyers must pay the full premium upfront. This strategy is best used when you expect a sharp move and can manage quick exits.
Use tools like MACD, RSI, or moving average crossovers:
Enter bullish calls when momentum indicators confirm an uptrend.
Buy puts on bearish signals.
This method works best in trending intraday markets and requires swift execution with tight stop-losses.
Target deep out-of-the-money options nearing expiry:
These cheap options can yield high returns on sudden moves—but time decay is steep, so they must be scalped quickly.
Best used during news-driven spikes or on expiry days when premiums get quenched sharply.
Deep OTM option scalping is a high-risk, advanced strategy. Most contracts lose value rapidly, especially on expiry. Retail traders should approach with caution and only after thorough understanding.
A neutral, multi-leg strategy designed for range-bound sessions:
Sell ATM call and put, buy wings (OTM call and put) to cap risk.
Profitable if the underlying stays within a narrow band—liquidity and quick exit discipline are crucial.
The Iron Butterfly is a margin-intensive strategy best suited for experienced traders using liquid indices like Nifty. Traders must account for peak margin requirements and ensure tight execution across legs
Track rapid increases in OI and volume at specific strikes:
Sudden builds in OI often align with institutional positioning, signaling possible directional moves.
Enter near-term option trades aligned with this momentum but manage exits tightly.
Implied Volatility (IV): Rising IV boosts premiums, beneficial for buyers; falling IV helps sellers.
Open Interest: High OI at certain strikes identifies support/resistance and institutional interest zones.
Volume: Confirms strength of movements—higher volume adds reliability to breakouts.
Delta: Indicates sensitivity to underlying price; high Delta calls reflect stronger directional exposure.
Close Before Expiry: Avoid overnight holding on intraday strategies prone to time decay and gap risks.
Use Stop-Losses: Protect positions from sudden reversals or unexpected volatility.
Choose Liquid Contracts: Target instruments with high OI and narrow bid-ask spreads to reduce slippage.
Manage Position Size: Never risk more than a small fraction of your trading capital per trade.
Imagine Nifty is trading at 19,500 with strong buy-side momentum early in the session:
Buying an ATM 19,500 call at ₹80 and a put at ₹70 gives a total cost of ₹150.
If Nifty rallies to 19,600 intraday, the call may surge to ₹230 while the put decays to ₹30.
Closing the straddle nets around ₹80 profit—less time decay since holding duration was just a few hours.
Intraday options trading offers high-return opportunities—but it's not suited for the faint-hearted. By combining focused strategies like straddles, directional buying, scalping, or wings, with rigorous entry criteria and tight risk controls, traders can potentially thrive in fast-paced markets. The key lies in swift execution, disciplined exits, and staying aligned with market structure and volatility conditions every single session.
This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.
Strategies like at-the-money straddles with defined stop-losses can offer a balanced risk-reward profile during periods of high volatility. However, the safety of any strategy also depends on broader market conditions, structure, and your ability to manage risk actively.
Yes, many traders rely on indicators like moving averages, RSI, Bollinger Bands, and basic price action to guide entry and exit points. While these tools are applied to the underlying asset, they can still be useful in timing options trades.
Not all options are suited for intraday trading. It's best to stick to instruments like Nifty, Bank Nifty, or heavily traded stocks with high open interest and narrow bid-ask spreads, as these provide better liquidity and easier execution.
Time decay, though more pronounced in multi-day trades, can still impact options pricing during the day—especially in out-of-the-money contracts nearing expiry. Even a sideways market can erode premiums quickly.
It can be, but beginners should be cautious. The learning curve is steep, and options trading involves fast-paced decisions. Practicing in a demo environment and avoiding excessive leverage in the early stages is strongly recommended.