Anyone with long straddle experience on stocks?

F&O
1

Does anyone of you have long long straddle experience on stocks, or all of you have experienced with only Nifty and Bank Nifty?

Although I may have experienced price of stocks going the opposite direction of expectation, I don’t remember them now, so I am unable to connect them here.

I think it is easy to place long straddle on stocks than Nifty because I think Nifty making big moves in the opposite direction is tough to predict, unless it is a volatile market, up one day, down the other, and it is relatively easy to predict for individual stocks, as there will be many stocks from many sectors with many businesses.

So, anyone? :thinking:

2

I had this crazy idea a while ago though I never tested it properly and said to myself it’s the best risk free return or it’s too good to be true or I am just purely gambling.

For long straddle, ideal conditions are chaos, market gaps , black swan etc :grin:. Almost all weekends have weekend volatility which is in our favor. So test it this way

  1. Every Friday , just 5 mins before market close execute a long straddle (ATM only ).

  2. On Monday after first 30 mins exit irrespective of whether you are profit or loss after market open volatility is dead.

Having a weekend volatility + some news events happening on Sunday is cherry on top because on Monday price will definitely move a lot.

Now I never tested it properly but just made a observation. If it does work for you , do update here !

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3

Let me see if I can do this, thank you.

4

Anyone else? Any experience, ideas, thoughts? :face_with_peeking_eye:

5

Premium decay heaven. Your profit will start at the breakevens.
Do the opposite and you’ll have lots of profits.

If you’re still hell bent on doing long straddles, do this-
Buy the atm call.
Sell an otm call.
Buy the atm put.
Sell an otm put.

Basically you’re reducing your cost basis. So if anything goes wrong, you’ll only lose a little.

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6

Will look into it, started learning derivatives.

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