Paper Trading Nifty Straddles

[bandlab2]

Hope you don't mind me extending your post

Trade reason - Benefit from high premium before the budget day. Expecting premium to fall due to timedecay and drop in IV post budget. Selecting Short Straddle strategy as it will benefit for timedecay on 2 option positions. Protecting unlimited risk part of strategy by buying far OTM call and put.

Trade open date - 3/July.
Nifty 4400 July Short Straddle
4400 Call = xxx
4400 put = xxx
total = 425

Target Premium - 300 or less (+125 pts)
Stop loss - 550 (-125 pts)
Time limit - ready to hold till expiry
Breakeven point = 4825 on higher side / 3975 on lower side.

note - though reward risk ratio is 1:1, but probability is in our favour.
=================

Happy Trading

yesterday i squared off the OTM options at cost . holding the 4400 straddle, no at 330 rs. target is 50% of premium which is 212

 

[AW10]

AW da,

i have bought 4500CE & 4500PE at different time means bought 4500PE (NIFTY AT 4650) & 4500CE (nifty at 4200)....this way i tried to reduce the cost of straddle...

can we know how you prepare yourself for this event means what position you have now ?

just have a curiosity that how master of options prepare himself for big event..it will be a study material for us...

thanx & regards

Sorry Vineet. Did not see your msg early so couldn't reply.

My strategy was to benefit from high premium - so sold 4300 straddle (@430rs) on Thursday. Protected the downside by 3800 PUT in 45 Rs. Upper BEven was beyond 4700 which was recent high so did not expect that mkt will stay above that level. So took calculated risk on upside.

On Thursday, also took covered futures position at Long NF @4333 and sold double 4500 call @131. This is to benefit from any bullish pull till 4500/4600 level. Delta neutral position as Long NF had delta of +1, when 2 short call gave delta of -1.. So net delta very close to 0.

On Monday, closed NF covered future trade. I looking the big weakness, decided to break this trade and exited NF first by 11.15 am and closed short 4500 call in the evening.
My Short straddle is still open, will close it as market comes near 4300. Till that time, I am happy to collect time decay. Today mkt did not make new low gives me comfort that
it is not falling further. Closed the 3800 Put (and cut the loss), that I bought to hedge the straddle as market has become lot more reasonable after the event.

On Monday, near the close, also built up covered NF position @4146 level and selling double 4300 call. My stop for covered position is at 4000 and the risk money is collected by short call
premium. Again delta neutral on market now.

In short the strategy has been - 1) Exploit high premium by collecting it 2) Don't predict the direction and remain delta neutral 3) Keep risk within reasonable limit

Aur Boss, I am not yet master so please don't embarrass me with such titles. More I know about the subject, more I feel how ignorant I am..

Happy Trading.

 

[myvineet]

Sorry Vineet. Did not see your msg early so couldn't reply.

My strategy was to benefit from high premium - so sold 4300 straddle (@430rs) on Thursday. Protected the downside by 3800 PUT in 45 Rs. Upper BEven was beyond 4700 which was recent high so did not expect that mkt will stay above that level. So took calculated risk on upside.

On Thursday, also took covered futures position at Long NF @4333 and sold double 4500 call @131. This is to benefit from any bullish pull till 4500/4600 level. Delta neutral position as Long NF had delta of +1, when 2 short call gave delta of -1.. So net delta very close to 0.

On Monday, closed NF covered future trade. I looking the big weakness, decided to break this trade and exited NF first by 11.15 am and closed short 4500 call in the evening.
My Short straddle is still open, will close it as market comes near 4300. Till that time, I am happy to collect time decay. Today mkt did not make new low gives me comfort that
it is not falling further. Closed the 3800 Put (and cut the loss), that I bought to hedge the straddle as market has become lot more reasonable after the event.

On Monday, near the close, also built up covered NF position @4146 level and selling double 4300 call. My stop for covered position is at 4000 and the risk money is collected by short call
premium. Again delta neutral on market now.

In short the strategy has been - 1) Exploit high premium by collecting it 2) Don't predict the direction and remain delta neutral 3) Keep risk within reasonable limit

Aur Boss, I am not yet master so please don't embarrass me with such titles. More I know about the subject, more I feel how ignorant I am..

Happy Trading.

just awesome.....excellent, DA

i know that you must have some very effective but simple techniques..

hae taken print out of this post ...now will study each leg of this deeeply

thanx a lot for sharing all this..

thanx & regards

 

[bandlab2]

can we resume this thread?

 

[trader.trends]

bandlab
Will look forward to that.
TT

 

[AW10]

I have been waiting to post on this thread for over 3 months now.
Just create a straddle / strangle and post it..
What about trying out skewed position as well.. Say we expect market will be down from
5000 by nov.. say 4800.. level so create a straddle at 4800 / and a strangle around 4800.
We need market to expire near the center point of straddle.. so why can't we construct the straddle in that fashion.

Happy Trading

 

[munde_77]

can we resume this thread?

@bandlab , resume the thread:thumb:

 

[adg123]

So many expert in this place...! Where are you all ??? What next for 16th May/2014 ?

 

[adg123]

SHORT STRADDLE / STRANGLE please

 

[lemondew]

Good reminder to an old thread