How to build an options strategy on Sensibull
Sensibull is an options analytics platform integrated with Zerodha that allows traders to design, visualise, and execute multi-leg options strategies without building the position leg by leg in Kite. This guide explains how to use the strategy builder to construct a strategy, read its payoff chart and Greeks, and send it to Kite as a basket order.
For background on the underlying platform see Sensibull and Kite, Zerodha’s trading platform. For payoff chart interpretation specifically, see How to use options payoff charts on Sensibull.
Why use Sensibull instead of Kite directly
Kite’s standard order form is designed for single-leg trades. While Kite’s basket order feature allows multi-leg entry, it does not show a payoff chart or net Greeks before execution. Sensibull fills this gap: it shows exactly what the strategy earns or loses at every possible underlying price at expiry, the Greeks at initiation, and an estimated margin requirement, all before a single order is placed.
Sensibull is particularly useful for:
- Strategy selection: comparing multiple strategic approaches (for example, a short straddle versus an iron condor) on the same underlying before committing.
- Strike selection: fine-tuning strikes to achieve a desired risk/reward profile or a target net premium credit.
- Pre-trade margin check: verifying that the combined margin is within your available funds.
- Execution efficiency: sending all legs simultaneously as a basket to reduce leg-risk (the risk that one leg executes and another does not).
Step-by-step procedure
Open Sensibull and select the underlying
Navigate to sensibull.com and log in using your Zerodha credentials. Alternatively, open Kite, click Apps in the top navigation bar, and select Sensibull to launch it in a new tab already authenticated.
In the Strategy Builder panel (the main landing page), click the underlying search box and type the symbol. For index options, type NIFTY, BANKNIFTY, MIDCPNIFTY, SENSEX, or BANKEX. For stock options, type the NSE symbol (for example RELIANCE, TCS, INFY). Press Enter or click the suggestion.
Sensibull loads the current option chain data for the selected underlying, including live LTPs, OI, and IVs.
Choose the expiry
Click the expiry dropdown near the top of the strategy builder. Sensibull displays all available expiry dates for the underlying. After SEBI’s October 2024 rationalisation (circular SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/120), weekly expiries are limited to one per exchange per major index. Monthly expiries remain available for most underlyings.
Select the expiry that matches your intended holding period. Shorter expiries (weekly) have faster Theta decay and are typically used for short premium strategies. Longer expiries (monthly or beyond) have more time value and are preferred for long premium strategies or calendar spreads.
Add legs manually
Click Add Leg. A row appears in the legs table with the following fields:
- B/S (Buy or Sell): determines whether you are long (paying premium) or short (receiving premium) on this leg.
- CE/PE: call or put.
- Strike: type a strike price or select from the dropdown. Sensibull shows each strike’s LTP alongside it.
- Lots: number of lots. Ensure the total quantity does not exceed the exchange freeze quantity limit (see How to handle freeze quantity on F&O).
- Expiry: can differ per leg for calendar or diagonal spreads.
As you add or modify each leg, the payoff chart updates immediately and the Greeks summary (Delta, Gamma, Theta, Vega) recalculates.
Use a pre-built strategy template
Instead of building legs from scratch, click the Strategies button (or “Select Strategy” dropdown) to pick a named strategy. Sensibull offers templates including:
| Strategy | Description |
|---|---|
| Bull call spread | Buy lower-strike CE, sell higher-strike CE |
| Bear put spread | Buy higher-strike PE, sell lower-strike PE |
| Short straddle | Sell ATM CE and ATM PE |
| Short strangle | Sell OTM CE and OTM PE |
| Long iron condor | Sell OTM strangle, buy further OTM strangle for wings |
| Long calendar spread | Buy far-month ATM option, sell near-month ATM option |
| Covered call | Long futures (or stock), sell OTM CE |
After selecting a template, Sensibull auto-fills strikes (typically ATM or standard OTM levels). You can then manually adjust any leg’s strike, quantity, or expiry to customise the position.
Review the payoff chart
The payoff chart is the central visual output. It shows:
- X-axis: the underlying price at expiry, centred around the current spot price.
- Y-axis: the net profit or loss of the combined position (in rupees, after premium paid or received).
- Breakeven points: marked on the X-axis; the underlying price(s) at which net P&L is zero.
- Maximum profit zone: the shaded region of peak return (often capped for defined-risk strategies).
- Maximum loss zone: the extent of potential loss if the underlying moves outside the wings.
Hover over the chart to read the exact P&L at any spot price. Below the chart, Sensibull shows a summary table with:
- Net premium paid or received for the strategy.
- Maximum profit (with the price at which it is achieved).
- Maximum loss (with the price at which it is achieved).
- Lower and upper breakeven prices.
For a detailed explanation of how to interpret these elements, see How to use options payoff charts on Sensibull.
Review the Greeks summary
Below the payoff chart, Sensibull shows the net Greeks for the entire strategy:
| Greek | What it tells you |
|---|---|
| Delta | Net directional exposure per 1-point move in the underlying |
| Gamma | Rate of change of Delta per 1-point move |
| Theta | Estimated daily P&L from time decay alone |
| Vega | P&L impact per 1% change in implied volatility |
For a detailed explanation of each Greek see How to read option Greeks on Kite.
Key interpretation points:
- A negative net Theta (positive for long premium strategies) means you lose money each day the underlying stays flat. Time decay is your cost of holding.
- A positive net Theta (positive for short premium strategies) means you earn from time decay every day. This is offset by Gamma risk if the underlying moves sharply.
- A positive net Vega means the strategy benefits if IV rises; a negative Vega means the strategy benefits from IV contraction.
Check the margin requirement
Sensibull shows the estimated margin required for the strategy, typically broken into SPAN and ELM components. Compare this figure with the Available Margin in your Kite Funds page. If the margin shown exceeds your available funds, adjust the strategy: reduce lot size, convert a naked short into a spread by adding a long wing, or choose a closer-to-ATM spread.
For a precise margin breakdown, cross-check using the Zerodha SPAN calculator.
Maintain a margin buffer of at least 10–15 percent above the calculated margin to absorb intraday MTM fluctuations and SPAN parameter updates.
Place the strategy as a basket order
Once satisfied with the strategy, click Execute or Place Order. Sensibull pre-fills a basket order in Kite with all legs. In the Kite basket order screen:
- Verify each leg: symbol, expiry, strike, CE/PE, B/S, product type (NRML for overnight, MIS for intraday), quantity.
- Set limit prices for each leg. Sensibull pre-fills near-market prices; adjust if the market has moved since loading.
- Click Submit to send all legs simultaneously.
For guidance on managing or exiting the position after it is live, see How to exit a multi-leg F&O position on Zerodha.
Saving and monitoring strategies
Sensibull allows you to save strategies (free and paid plans) for monitoring without execution. A saved strategy updates its P&L in real time based on live option prices. Use this feature to:
- Track paper trades before committing capital.
- Monitor the Greeks of a live position alongside the payoff chart.
- Set P&L alerts (paid plan) so Sensibull notifies you when the strategy reaches a target or stop-loss level.
What can go wrong
- Leg-risk during basket execution. If the underlying moves sharply while the basket is being submitted, some legs may execute at different prices than expected, distorting the strategy’s risk profile. Use limit orders rather than market orders for options legs.
- Margin estimate differs from actual. Sensibull’s margin figure is calculated from the most recent SPAN parameter file. SPAN files update intraday; actual margin charged at execution may differ. Always verify with the Zerodha SPAN calculator immediately before placing the order.
- Expiry mismatch after SEBI October 2024 changes. If you saved a strategy before the weekly-expiry rationalisation, previously available expiries may no longer be tradable. Sensibull will flag missing contracts, but confirm the active expiry schedule on NSE.
- IV crush after events. Strategies built for high-IV environments (selling premium around an event) can show large mark-to-market losses if IV collapses faster than expected. The payoff chart at expiry does not capture intraday Greeks P&L.
- Physical settlement risk on stock options. Any in-the-money stock option that is not closed before expiry is physically settled. See How to physically settle an in-the-money option and How to avoid physical settlement.
Related guides
- How to use options payoff charts on Sensibull
- How to read option Greeks on Kite
- How to use the options chain on Kite
- How to use basket order for multi-leg options on Kite
- How to exit a multi-leg F&O position on Zerodha
- How to calculate margin using the Zerodha SPAN calculator
- Sensibull options analytics platform
- F&O segment on Zerodha
References
- SEBI Circular SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/120 dated October 2024, Rationalisation of weekly index derivatives contracts.
- SEBI Circular SEBI/HO/MRD/MRD-PoD-2/P/CIR/2020/198 dated 1 December 2020, Peak margin reporting.
- Sensibull help centre, “How to use the Strategy Builder”, sensibull.com/help.
- Zerodha support article: “What is a basket order?”, support.zerodha.com.
- Zerodha Varsity, Options Strategies module, zerodha.com/varsity.
- NSE F&O product specifications, nseindia.com.