Nifty || Hedged || Directional || Overnight
What is it?
Every intraday trader knows the feeling — you close your positions at 3:30 PM, and then the real move happens overnight. Global cues shift, US markets close strong or weak, and by the time 9:15 AM comes, Nifty has already made its move — without you.
Zen Credit Spread Overnight is built to capture exactly that window. It identifies a directional bias before market close and sets up a hedged credit spread position that stays live overnight — letting the position work while you sleep, with risk fully capped on both sides.
Why overnight — and why credit spreads?
Two separate edges working together here.
Edge 1 — The overnight window
A large chunk of Nifty’s directional moves happen between 3:30 PM and 9:15 AM — driven by US markets, Asian cues, FII flows, and macro events. Most retail traders are shut out of this window entirely. Zen positions you inside it — systematically, every session where the conditions are right.
Edge 2 — The credit spread structure
Just like Damper @Algo Spotlight #1, Zen uses a credit spread — not naked options selling. This means your maximum loss is defined and capped the moment the trade is placed. Even if markets gap against you overnight, the hedge is already in place. You wake up knowing the worst case before you went to sleep.
Simple analogy: Think of it like placing a considered bet on tonight’s cricket match before you sleep — with a defined maximum loss already set. You don’t stay up to watch. You wake up to the result. Zen does the same with Nifty’s overnight move.
How does the trade actually work?
This is where Zen is elegantly simple. There are only two possible outcomes — and both are defined before you sleep.
Before market close - Algo identifies directional bias + enters the credit spread
Based on its signals, the algo sets up a bullish or bearish credit spread on Nifty options. The hedge (bought leg) is placed simultaneously — so the maximum loss is locked in from the moment the position opens.
Overnight - Position stays live — SL is the only early exit
While you sleep, the algo monitors the position. If the market moves sharply against the trade overnight or at the morning open, the stop loss triggers automatically — cutting the position before it can breach the defined maximum loss. No manual action needed.
Next day 3:00 PM - Auto-exit if SL hasn’t triggered
If the stop loss hasn’t been hit, the algo squares off the entire position at 3:00 PM the next day — avoiding last-hour volatility and expiry risk entirely. Clean exit, every session.
When does it work best?
When global markets are trending — US closing strong or weak gives Nifty a clear overnight direction to exploit
Normal to mild volatility regime — VIX 13–20 — where overnight moves are meaningful but not extreme
When you have 50:50 cash-to-pledged margin — overnight positions need adequate cash buffer, not just pledged collateral
VIX above 20 — extreme overnight gap risk, even hedged positions can get challenged by violent morning moves
Heavy cash-to-pledged imbalance — if most of your margin is pledged, overnight positions carry additional broker interest cost and margin call risk
The capital tier reminder
In our algo cheat sheet post, we recommend staying fully intraday below ₹5L capital. Zen is the first algo in this series that carries overnight exposure — which means it’s best suited once you have adequate capital and a healthy cash-to-pledged margin ratio.
If you’re early in your journey, start with Damper or Fixed RR intraday first. Add Zen as your portfolio grows and you’re comfortable with overnight exposure.
Who is this for?
Someone with ₹1L+ in capital who is comfortable with overnight exposure, has a healthy cash margin ratio, and wants to participate in the overnight move window that most intraday traders completely miss. It’s also the community’s most popular overnight algo — and one of the top deployed on broker marketplaces.
Available on Stratzy. If you’ve already read the spotlights on Damper (intraday credit spread) and Fixed RR (options buying), Zen completes the core trio — intraday selling, options buying hedge, and overnight directional.
Zen is one of the most loved algos in this community. If you’re already running it — how has your experience been with the overnight exposure? And what algo should we cover next? Drop it below 