So you got it right 
As a options trader making a living out of this market for last many years, I usually avoid placing bets on possible large moves (and advice the same to all).
Long or short around big events - it can be a killer either ways - high risk, high reward.
Rather, it is better to let the dust settle down after the move happens. Then rest of the days are there to make money. Enjoy!
I booked losses in both long straddles as well as short straddles on results 
now rarely i carry positions for the results , even if i carry i hedge if i am short or sell otm options to minimize losses if I am long
True that! I also don’t prefer short straddle as a volatility play, instead Vega negative plays like customized Iron Butterfly give a lower exposure to risk.
weekly banknifty straddle is trading at 675rs and i dont this coming down much till the budget …
straddle or strangle seems to be risky considering its expiring on the budget day …
shuld do reverse condor or reverse butterfly ( buy atm and sell otm )
Please allow me to clarify:
So essentially, if you are SHORTING or selling options when the VOLATILITY is high, you will receive a high option premium. The Buyer (who goes LONG) will pay this high premium. So when the volatility is high, sellers benefit.
INDIA VIX is a good indicator of the OVERALL volatility of the Indian stock market as a whole.
However, it SHOULD NOT be assumed to apply for all kinds of stocks/index options.
Hope this clarifies.
@jesuslovesusjohn
Just to add one more point.
In my earlier posts on this thread, i’m referring to IV.
That stands for “Implied Volatility”. Search on Google about this term to understand it (if you don’t know it already!)
one more thing to note here is that , when there are events sheduled like budget , election results , RBI meet , premiums wont fall or wont fall relatively …
last week finance minster scheduled a meeting on this wednesday(24th) … ATM straddle on weekly bank nifty option settled at 330rs on thursday ( 18th ) , 335 on friday , 355 on mondya and 295 on wednesday …
when any events are expected , its not bad to go long even if the premiums are high
anyone took bets on budget day ?
i have long strangle on tata motors for the budget …
i have not done iron butterfly or iron condor in bank nifty for the budget , but its a decent bet …
Buy 27400 CE + PE = 410Rs app
Sell 27800 CE + 2700 PE = 170rs app
or any other strikes
Is it because of 600 crore project deal for tatamotors?
I have long strangle on nifty. 11250 CE and 10850 PE
lol … no
i picked it mainly because it wont lose premium during the budget and fair chance of showing decent moveemnt up or down…
did little analysis … it easily moves 3/4% during the budget session …
also auto sales data is lined up on 2nd and results will be out on 5th , so i feel premiums depreciation will be very less … prepared for 10% loss though
whoever bought straddle or starngle might have lost big esp in bank nifty …
iron condor or iron butterfly in BN might have given decent loss as well
@iSTFF @VelmuruganSengottai @RSOptions After reading complete post, I think long straddle is merely useless and loss bound if Volatility is high at the time of taking position. However just to confirm, can someone comment about this strategy for Feb 2nd 2021 budget session? If my understanding is correct post budget session market IV reduces on the same day itself so there is no use of taking the position on Friday 3 PM (30 Jan) and square off on Monday once good move happens in the market?
Hello Guys,
I trade BN options every week mainly for expiry play.
I deploy short strangle with 1000-1500 points away from the spot starting from tuesday i.e. two days before expiry.
I some times do long straddle also on BN but on intraday basis. The main factor that effects the long straddle is volatility along with the spot price.
Coming to budget day strategy, now is not the correct time for deploying long straddle bcz the options prices have already shoot up due to increase in volatility. The best thing is to open long straddle 10 days before the budget and close it one day before or on opening day of budget.
We can also initiate long straddle on the budget day after 3pm and can carry forward it till expiry. This strategy has been back tested and was profitable 7/10 times in the last 10 years.
The rewards in the above strategy will be very good ranging from 50-100% on capital.
Backtesting results which you mentioned is for Nifty or BN? But the big move will be completed by 3 PM on budget day so still is it wise to go for long straddle till expiry?
Actually I’m seeing conflicting statements for the same strategy so a bit confused, some are saying initiate straddle on Friday evng or Monday mrng (by 9.20) and exit by same day 3 PM or Tuesday 3 PM.
The reason being big move will happen either immediately after budget or by next day.
While some others said the same way as you suggested. But in this case even though volatility cools off a bit I’m more concerned abt the big move.
In my opinion, do a long straddle only if you think that the delta move will be greater than the IV crush after budget. Only then will you be making a profit.
Hi…
The back testing was done on nifty but the same should also equally applicable for BN.
Since the volatility cools off after the event, the option prices should be cheap after 3pm.
Also in most of the years,market has shown trend and made big move either up/down side after the budget till expiry. This strategy mainly depends on the expected after the budget till expiry.
Coming to intraday, u can initiate long straddle in the morning and can close it once u see the volatility is falling. But this needs u to constantly watch the market minute by minute bcz market can give wild swings on budget day.
Only thing worrying me is that market is already trending and can become sideways after the budget.
Pretty good profit indicators.