A predictor is only half the system; the filter decides whether to act. Bands: probability between 0.58 and 0.80 (below is low edge, above likely overfit or leaked). Days to expiry above one (avoid expiry-day Gamma risk). India VIX z below two (block extreme vol). Max-pain distance above 0.3 percent (avoid pinning).
Plus a position cap of two percent premium risk per trade. Worked example: Bank Nifty spot 52000, P(up) 0.64, VIX z minus 0.3, max_pain 0.2 percent — band OK, VIX OK, but max_pain too close — size reduced, not blocked. This nuance separates a framework from a signal.
Q: What probability band is safe?
A: Roughly 0.58 to 0.80; below is low edge, above suggests leakage or overfit.
Q: Why block trades when VIX is high?
A: Extreme VIX means gap risk and crowd panic that calm-calibrated models mishandle.
Q: How much risk per trade?
A: Cap at about two percent of premium at risk per position, adjusted by regime.
Q: Why reduce size instead of blocking near max pain?
A: Pinning is probabilistic; reducing size respects the magnet without refusing all trades.
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By Shakti Tiwari · Options AI research pillar. NISM XII certified. Educational only, not investment advice; verify before acting.