Disha Pro Option Selling Algo
Rule-based, positional option selling on NIFTY weekly options, driven by a proprietary trend-direction model. Backtested across 5.5 years — with real costs, slippage, walk-forward validation and a look-ahead audit.
📊 Headline Metrics
All numbers are net of brokerage, STT, exchange charges, GST, stamp duty and slippage. Per-lot (65 qty), 1 trade per signal, on a ₹2,00,000 capital basis.
🎯 What Disha Pro Is
The Approach
A proprietary trend-direction model on NIFTY decides which side of the market to be on. The algo then sells NIFTY weekly options aligned to that view — bullish, it sells puts; bearish, it sells calls — and holds the position until the model flips to the other side, or the weekly expires.
- Fully mechanical — no discretion, no screen-watching
- Positional: signals are infrequent, not intraday churn
- One position at a time · no fixed stop, no profit target
- Lot size 65 (1 lot per trade in this backtest)
The model's internals, parameters and execution rules are proprietary and not published.
Risk Profile
This is a naked option-selling strategy held overnight. Losses on a bad trade are not capped by a hedge leg.
- Worst trade in 5.5 years: —
- Max drawdown peak-to-trough: —
- Max consecutive losses: —
- Average trade: —
📈 Equity Curve (5.5 Years)
Cumulative P&L (₹) across the full backtest. The shape tells you how consistent the strategy is — flat patches mean drawdowns.
📉 Drawdown Profile
Peak-to-trough drawdown over time. This is what your account looks like during the worst stretches — be prepared for it psychologically.
📅 Year-by-Year Performance
| Year | Trades | Wins | Win % | P&L (₹) | P&L (pts) |
|---|
🗓️ Monthly Returns Heatmap
Each cell is that month's net P&L in ₹. Green = profit, red = loss, intensity = magnitude. Hover to see exact values.
🧾 Gross vs Net — Where the Costs Go
Plenty of published backtests quote gross P&L and quietly skip the costs. Here is the full path from gross to what actually lands in your account.
| Gross P&L — before any costs | — |
|---|---|
| Slippage — adverse fills, never favourable | — |
| Charges — brokerage, STT, exchange, GST, stamp duty | — |
| Net P&L — what you keep | — |
Costs consume — of gross. Every headline number on this page is the net figure — never the gross.
🔬 Why This Backtest Is Trustworthy
Most published backtests quietly fail at least one of these. This one passes all four.
✅ No look-ahead bias
Every entry is placed strictly after the signal candle closes — never using a price that wasn't knowable at the time. Verified by an automated temporal-integrity audit.
✅ Real costs & slippage
Brokerage, STT, exchange charges, GST and stamp duty are all modelled. The edge survives even at 5× realistic slippage (₹9.25L → ₹9.00L) — it isn't a fill illusion.
✅ Walk-forward validated
Out-of-sample 2024–26 (PF 1.53) performs as well as in-sample 2021–23 (PF 1.48). No curve-fitting signature.
✅ The signal is the edge
Keeping the entries, expiries and holding periods identical and replacing only the direction call with a coin flip collapses the result to ₹1.55L. Selling blindly gives ₹1.64L. The model gives ₹9.25L — and cuts max drawdown ~2.6×.
⚠️ Risks You Must Understand
1. Naked Option Selling = Limited Profit, Larger Loss
The premium you collect on a trade is capped, but the theoretical loss is not — if the market moves sharply against the position, losses are uncapped. The trend model reduces how often you are on the wrong side, but it does not eliminate the risk.
2. Worst Trade in 5.5 Years
Largest single losing trade: —. A single bad day can wipe out 2–3 weeks of gains. Position sizing matters more than the signal itself.
3. Drawdown Reality
Max peak-to-trough drawdown: —. Multiple losing trades in a row will happen — see "Max consecutive losses" above. You must have capital to ride through these.
4. Past Performance ≠ Future Results
This backtest covers 2021–2026 (5.4 years) including COVID recovery, 2022 rate-hike volatility, 2023–2025 rangebound, and 2026 election volatility. Future regimes may differ materially.
5. Execution Risk
Backtest assumes fills at next-bar open. In live trading, slippage, partial fills, broker outages, and rejections happen — typically reducing realised P&L by 5–15%.
6. Discipline Required
Disha Pro holds positions overnight (next-weekly = 8–12 DTE). You must NOT manually exit on fear, NOT skip signals on intuition, and NOT increase size after losses. Algo discipline beats human emotion.
📜 Important Disclaimer
Backtest disclaimer: Results shown are based on historical NIFTY options data from January 2021 to May 2026. Past performance does not guarantee future returns. Option selling carries risk of significant losses in volatile conditions.
Not investment advice: Disha Pro Option Selling Algo is provided for educational and informational purposes. Nothing here constitutes investment advice or a recommendation to buy or sell any security. Consult a SEBI-registered investment advisor before trading.
Slippage & costs: Backtest includes 1-point slippage and standard brokerage. Live trading may experience larger slippage in fast markets or on illiquid strikes.
Capital requirement: Option selling requires sufficient margin to hold positions to expiry under adverse moves. Recommended minimum capital: ₹2–3 lakh per lot to safely absorb drawdowns and margin spikes.
No guarantee of profitability: No trading strategy is risk-free. You may lose part or all of your invested capital. By using Disha Pro you acknowledge that you understand these risks and trade at your own discretion.
© Disha Pro · OptionSellingAlgo.com · Backtest data last updated: 2026-06-04