Paper Trading Nifty Straddles

[munde_77]

Not necessary, closing a position on a small loss is better than waiting as the loss could become bigger.
All depends on what you are comfortable with.

Should I exit and book small loss

 

[munde_77]

update by eod Mar 24, total premium is 300, loss is 40 rs

Should I keep 50% stop loss

 

[munde_77]

Not necessary, closing a position on a small loss is better than waiting as the loss could become bigger.
All depends on what you are comfortable with.

Thanks..................

 

[sumeetsj]

ME 2 shorted the short straddle


April 2800 CE - Shorted at 125
April 2800 PE - Shorted at 140

All the best

As per managing positions I will go long in Nifty Futures if spot goes or closes above 3020 with a strict stop loss. Not going to book a loss in this one.

Suggestions welcome.

Thanks and regards,
Sumeet

 

[sumeetsj]

Another thing could be to book the put at lower level and keep the naked call open. This will help by shifting the upper breakeven point even further. Also the margin released by booking the put can be employed to long Nifty Future. But the risk involved in doing this is that we will have a naked short call open.

 

[AW10]

As per managing positions I will go long in Nifty Futures if spot goes or closes above 3020 with a strict stop loss. Not going to book a loss in this one.

Suggestions welcome.

Thanks and regards,
Sumeet

If the trade plan says stoploss at 50% of premium collected, then the loss limit is known For the trade. As a trader, out job is to execute the plan. So there should be no question now about what to do.

If your view about mkt has changed from sideway to bullish (selling straddle is sideway mkt strategy), then u can adjust the position and make it bullish position.
To make it bullish, you got to remove the bearish leg i.e. short call leg.. Not the bullish leg i.e. short put leg.
And if the view is not changed, then enjoy the time decay and do something better then watching each tick on the chart and calculating your open position P&L.

By closing short put leg, Do you realise that you are just demonstrating the typical limiting tendency of trading that is - book the profit and let losses run ?

Happy Trading.

 

[heeemz]

I have initiated trade as below...

April 2800 CE - Shorted at 128
April 2800 PE - Shorted at 132

=== Total Premium stands at 260

Couple of thoughts Please correct if I am misreading it

1 Would it be appropriate to say that the strategy would yield decent profits as long as market remains within the range (2550 3050) for decent number of sessions in April. But if it goes other wise, that is very big move in either direction say 2200 or 3200, we may end up on loosing side. I get the feel that there has to be a big move very soon on either side, Nifty is moving in range of 2550 2950 for quite a while now
2 In view of above, I have done following trades to hedge this would cover me atleast till this expiry Please suggest if this makes sense, not sure how to do this for April series as premium is too high.

March 2600 PE Bought at 3.2
March 3000 CE Bought at 2.2

2 On the other note, any views with respect to possible closing of Nifty for this expiry? There are ways and means by which one can derive the possible range for expiry but I dont know that

Cheers,

Heeemz

Update as of 24/03 ===

April Series Status : 300 - 260 = loss of 40
March Series Status (Hedged Positions) : 14.5 - 5.5 = Profit of 9
Net P&L = -31

As the strategy is to keep SL at 50%, we continue with positions. Lets see what happens.

Cheers,

Heems

 

[munde_77]

Hi,

here is straddle with protection till mar 09 expiry.

(prices are from last bid/ask in my rkg terminal)

2600 CE APRIL = 182
2600 PE APRIL = 162

Sold for 182 + 162 = 344

Now Protection side ( 200 DOWN and 200 UP, time is much more so upside also need protection)

2800 CE MARCH = 31
2400 PE MARCH = 32

Bought for 31 + 32 = 63

Nett Premium Recd. 344 - 63 = 281

[ 81 points excess value than protection levels ( 281 -200) make this more attractive, as position seems win-win whatever decisive value beyond protection range NF can take till March 09 expiry]

lets see what unfolds.

Great yaar .........you are still in profit of roughly 20 points today at 11.30 AM
Others in huge loss almost near stop loss

 

[pasha]

munde77, good to see you got out early. Keeping a 50% stop loss is fine in theory, but hard to accept a 50% loss in practice.

 

[munde_77]

munde77, good to see you got out early. Keeping a 50% stop loss is fine in theory, but hard to accept a 50% loss in practice.

You are right Pasha, I am lucky to have exited on small less. Thanks