I checked that doing credit spreads on ITM is more profitable than ATM since sometimes in big moves ATM becomes OTM and after 100 pts move there is not much decrease in the OTM position.
But in ITM since intrinsic loss will also be there it will enhance the result. I check the strategy for 13 Jul 2026, if damper might have taken the trade in 100 points ITM on dhan HQ. It would have been more profitable by 57%. Margin increase is just 10%.
There is more alpha that can be captured. On left is ITM and on right is ATM which damper sold. these positions are showing more profit on ITM than ATM.
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Hi @ProTrader
Thank you for sharing your observation and the effort you’ve put into analysing the trades.
I’d like to clarify that what you’re suggesting would fundamentally change the Algo’s trading logic rather than being an optimisation to the existing strategy.
While a particular ITM Credit Spread may appear to have generated higher returns for a specific trade, it also comes with a different risk profile. Higher potential rewards are generally accompanied by higher risk, and evaluating a strategy based on individual instances may not reflect its behaviour across different market conditions.
Before an Algo is made LIVE, our research team evaluates and rigorously tests it across multiple market environments, expiry cycles, and strike selections, including different option moneyness (ITM, ATM, and OTM). The final strategy that you see on the platform is the outcome of extensive research, validation, and robustness testing with the objective of delivering consistent behaviour over the long term rather than optimising for a particular trade or market phase.
That said, I genuinely appreciate you taking the time to share your analysis. Feedback and ideas from our users are always welcome, and we continue to review them as we evolve and enhance our Algo offerings.
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