It will be so good n exciting to experience the DRAMA ....
General Trading Chat
- Thread starter timepass
- Start date
- Tags idle thoughts trading talk only
These are the times one should use straddle or strangle depends on their convenience. Especially when you expect a volatility and not sure about which side it might settle at the end of the day , the above options could be better. That too since it happens on expiry day, the risk will be less for this strategy and reward could be huge. Because all time decay will be factored on expiry day so all CE and PE will be at muted prices and once it shows volatility there are huge probabilities we will be in profit. This is just my view.
In all such type of scenario ...... unfortunately ..... Option sellers price all such uncertainties both ways ...... and there is not much juice left in straddle / strangle ......
I tried in limited quantities on many such occasions ... not much success ....
One such time was may 2014 ... just before Lok Sabha Election results ....
Had I betted naked calls on Modi ..... I could had made handsome profit ....
But prior to that event both Calls & PUTs were hugely expensive ..... I went for straddle ......
.... got only small profit ....
Another was way back in 2005 or 2006 ..... at that time IT stocks were still hot ..... and whenever result day of biggies like Infosys was due there were huge volatily due to speculation on whether or not INFY will beat market expectation .....
I bought a straddle ...... and ended in small marginal loss
Another one was also way back in NDA time when Arun Shourie (not Jaitly) was Disinvestment Minister ......
and whenever discussion on parliament happen on HPCL Disinvestment ...... there was huge volatility .....
At that time I made some money in straddle
I tried in limited quantities on many such occasions ... not much success ....
One such time was may 2014 ... just before Lok Sabha Election results ....
Had I betted naked calls on Modi ..... I could had made handsome profit ....
But prior to that event both Calls & PUTs were hugely expensive ..... I went for straddle ......
.... got only small profit ....
Another was way back in 2005 or 2006 ..... at that time IT stocks were still hot ..... and whenever result day of biggies like Infosys was due there were huge volatily due to speculation on whether or not INFY will beat market expectation .....
I bought a straddle ...... and ended in small marginal loss
Another one was also way back in NDA time when Arun Shourie (not Jaitly) was Disinvestment Minister ......
and whenever discussion on parliament happen on HPCL Disinvestment ...... there was huge volatility .....
At that time I made some money in straddle
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In all such type of scenario ...... unfortunately ..... Option sellers price all such uncertainties both ways ...... and there is not much juice left in straddle / strangle ......
I tried in limited quantities on many such occasions ... not much success ....
One such time was may 2014 ... just before Lok Sabha Election results ....
Had I betted naked calls on Modi ..... I could had made handsome profit ....
But prior to that event both Calls & PUTs were hugely expensive ..... I went for straddle ......
.... got only small profit ....
Another was way back in 2005 or 2006 ..... at that time IT stocks were still hot ..... and whenever result day of biggies like Infosys was due there were huge volatily due to speculation on whether or not INFY will beat market expectation .....
I bought a straddle ...... and ended in small marginal loss
I tried in limited quantities on many such occasions ... not much success ....
One such time was may 2014 ... just before Lok Sabha Election results ....
Had I betted naked calls on Modi ..... I could had made handsome profit ....
But prior to that event both Calls & PUTs were hugely expensive ..... I went for straddle ......
.... got only small profit ....
Another was way back in 2005 or 2006 ..... at that time IT stocks were still hot ..... and whenever result day of biggies like Infosys was due there were huge volatily due to speculation on whether or not INFY will beat market expectation .....
I bought a straddle ...... and ended in small marginal loss
Yes long straddle I was in .... in hindsight ... though ... it was time to play naked long call ....
My long straddle did not make money because when I had bought .... both call & puts were hugely expensive ... (I think Option Sellers had priced in the uncertainty both ways ..... Modi winning and modi losing both were priced in the straddle .....
My long straddle did not make money because when I had bought .... both call & puts were hugely expensive ... (I think Option Sellers had priced in the uncertainty both ways ..... Modi winning and modi losing both were priced in the straddle .....
When we have more confidence on the movement of price then we can go for naked CE or PE. You might know better than me.say this month, in my view, naked 490CE or 520 CE in axisbank are good. Because both would definitely get doubled in april expiry with respect to yesterday closing.My expectation is more but with the concervative approach I am targeting 100%. Because I have been following EW in it and i knew it would reverse maximum around the end of first half today. But it reversed in the morning itself so does CEs.Ideally we could wait for few more hours to get some more confirmation about 5 waves in lower time frame so that we can confidently enter. So far it has made only 3 waves up. If the bigger B wave turns to be a triangle then this month will be useless for naked CE but would be better for option writers.I feel it will cross 540 this month. lets see
Yeah that is why i said timing is very important with respect to the expected volatility. Theoretically staraddle seems to be blindly a good option. But practically timing of straddle entry is really very important and we should try to make an entry in such a way that reward (volatility) is atleast 1.5-2 times the risk. So that one side we will make breaneven nicely and other side we will be in loss but if you book the profit, we will still be in profit. because the other side didnt go worthless. we book the loss and the remaining along the with the amount that it went above the breakeven in the first side, will be our profit.
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