Paper Trading Nifty Straddles

[nareshch]

the objective of the short in nifty is to nullify the losses arising from selling the nifty puts. there is no intention of profiting from short in nifty.

as long as nifty trades below 3100...i am making money (my target is to keep the premium 29,500) and my only line of actin remains if nifty break 3100 on the upside. at that point i'll buy 2 lot of nifty to hedge against losses on 3100 call...


linkon7

At the time of shorting Futures , you didnt have a position of Short PUTs . And by the time you short PUTS , you are already in good profit ( Futures short and Calls short ) . Does int it make sense to take out the gains rather than playing more and more to see the target 295 points ?

And out of the 295 pointspremium you received , you wont get all of that as profit as nifty wont close exactly at 3100 . Even in a range , normally, you can see a profit of 150-180 points . if you are getting 80+ points on a single day , why you want to sell puts again .
Instead you could have squared your futures ,calls and open a new short straddle of 2900 ( as Bias is down )

Finally , let me know if this is a Paper trade or real ?
Naresh

 

[linkon7]

At the time of shorting Futures , you didnt have a position of Short PUTs . And by the time you short PUTS , you are already in good profit ( Futures short and Calls short ) . Does int it make sense to take out the gains rather than playing more and more to see the target 295 points ?

And out of the 295 pointspremium you received , you wont get all of that as profit as nifty wont close exactly at 3100 . Even in a range , normally, you can see a profit of 150-180 points . if you are getting 80+ points on a single day , why you want to sell puts again .
Instead you could have squared your futures ,calls and open a new short straddle of 2900 ( as Bias is down )

Finally , let me know if this is a Paper trade or real ?
Naresh

There was a strong down trend and i could collect a better premium by selling the calls first and then puts at the end. i did not get a chance to short nift at 3100 today and i had to give up 40 points and finally shorted it at 3060.

here all i have to do is carry on holding the nifty shorts till expiry or till 3100 is breached on the upper side where i reverse my position.


the actual value of the stradle as of now is 3100- closing of spot (2978) = 122
The profit earned so far in nifty is 92
premium on the straddle = cost of straddle (295) - actual value (122) = 173

so my profit target stands revised at 173+92 = 265

I had a bear spread i carried from friday and luckily that gave me some profit but i want to keep this short straddle calculation seperate.

paper trading always generates profit and when implemented into trade turns out to be a big looser.

only way you can learn to swim is by jumping into the water. I had to experience this first hand. i will not job the nifty & options in an attempt to gain more profit, i want to see if it plays out the way i want it to.



linkon

 

[linkon7]

the position at the end of the day
scrip: cost: present: diff: profit/loss
3100 CE: 110: 83: 27: 2,700.00
3100 PE: 185: 165: 20: 2,000.00
nifty: 3060: 3017: 43: 4,300.00

Total = 9,000.00

 

[linkon7]

lesson learnt :
i could've sold 3000 put instead 3100 put. targeting a smaller premium.

when the market rallied to 3050 levels, my profit has reduced to 5500 /-

pros :
The actual value of the of the straddle would be just Rs 5. (instead of Rs. 122 /-)
i could keep the profit earned from nifty short at 3060 as short needs to be made at 3000 nifty only.

cons :
i could face a lot of whipsaws at 3000 nifty levels as ideally i would have to remain short below 3000.
by shorting 3100, i can safely remain short below 3100 with having to worry about gap ups to that level.

 

[AW10]

linkon7, Appreciate your posts on new startegy and further analysis/learning of that. I have been watching it and have few comments on that. Will post them later.

plz don't me wrong. but in my opinion, your strategy is diverting the discussion away from the topic of this thread i.e. Straddle strategy.
It would be better if you can start new thread to disucss your strategy so that both threads remain highly focused and don't leave readers confused.

Any other view, please ?
Happy Trading.

 

[linkon7]

linkon7, Appreciate your posts on new startegy and further analysis/learning of that. I have been watching it and have few comments on that. Will post them later.

plz don't me wrong. but in my opinion, your strategy is diverting the discussion away from the topic of this thread i.e. Straddle strategy.
It would be better if you can start new thread to disucss your strategy so that both threads remain highly focused and don't leave readers confused.

Any other view, please ?
Happy Trading.

good idea... i'll start a new thread... no intention for creating confusion here.... thanks buddy...

 

[munde_77]

lesson learnt :
i could've sold 3000 put instead 3100 put. targeting a smaller premium.

when the market rallied to 3050 levels, my profit has reduced to 5500 /-

pros :
The actual value of the of the straddle would be just Rs 5. (instead of Rs. 122 /-)
i could keep the profit earned from nifty short at 3060 as short needs to be made at 3000 nifty only.

cons :
i could face a lot of whipsaws at 3000 nifty levels as ideally i would have to remain short below 3000.
by shorting 3100, i can safely remain short below 3100 with having to worry about gap ups to that level.

Everytime market trends in any direction or becomes volatile ,you will learn new lessons every time.

 

[munde_77]

i can afford to job around many times... at 3100. i got 295 points at hand remember... !

ok.let us see how many months you suceed. Keep posting you daily positions

 

[munde_77]

why no one is interested and continuing this thread

 

[munde_77]

I am going to paper trade nifty stradle buy/sell here fo 6 montha and based on the results will do actual trades

Straddle : Call/Put of same strike price
Stangle : Call/Put of ifferent strike price

Strategy 1:

Sell nifty straddle 5 sessions before expiry of prev month. For Feb, you need to trade this around 22nd jan (aound 5 sessions before curent month expiry). Stop loss 50% of investment, target 50% of investment. You need to do this close to present maket rate to get equal premium on both legs

on 22nd jan , sell for 2700 feb series
Call : 157
Put : 170

Covered in 2373 - 3027 nifty

Need 2 times margin


Strategy 2:

Buy nifty straddle 5 sessions after the start of curent series . For Feb series, buy around 5th Feb. Stop loss 50% of investment, target 50% of investment. You need to do this close to present maket rate to get equal premium on both legs



Its possible you may end up squaring off these trades in 2nd strategy against 1st if there is no movement in nifty or its avaialble to same strike after 10 sessions. I am traking both these stategies independantly to see which one is better.

I will also log the highest/lowest combine premiums fo both strategies even though our sl/target is 50% of investment


Pl be aware for selling options you need to maintain margin of nifty and carries UNLIMITED risk, even though we have 50% stop-loss, due to high gap up/down our stoploss may be useless. Also you can consider selling strangles for Strategy 1 to incease your range. You can also consider far month, but longer the time frame, higher is your risk

PL DO NOT TRADE THESE , WE ARE DOING IT ON PAPER ONLY

Where is bandlab