Intraday bank nifty short straddle & short strangle!

#1

Experimenting short straddle/strangle for the last 1 week . Aim is to figure out a strategy to trade in bulk .
So far results seems to be good ( I did banknifty intraday condor and butterfly for close to 1 year and the results were incolclusive, backtested by removing the hedging losses and the results are impressive ) .

Initiate the trade after minor upmove or downmove ( we will get extra 3/4 points cushion even for OTM ) , SL is 10% of the premium or 100pt movement in bank nifty. This strategy got a good safety margin than going for positional condor or butterfly.
Trader needs to keep monitoring the position though.

@sushil_sirari1 will try expiry gambling later , first need to play safe . @newguy @Nandha207 @AnandaRaj :place_of_worship:

3 Likes
#2


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I deviated a bit on thursday by hedging it with current week option , dont have final SS.
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4 Likes
#3

I think when traders hedge, they become complacent and sit on losses longer. When writing naked options or buying selling future, the fear takes over and mind messes up the trade mgmt.

Traders have to have a plan to overcome fear of loss on losing trade and fear of uncertainity on open profits on profitable trade.

Instruments such as hedged, unhedged, option writing or buying or futures are secondary

2 Likes
#4

100% agree with you … i have the habit of initiating the position and go back to sleep till 12pm as well :blush:
hedging is needed if people cant follow the mkt , but i feel for intraday hedging is counter productive ( like if straddle loses 25pt premium in a timeframe , 200pt outside strangle loses 15-20pts…

i took input from @Nandha207 as well who had shown his P/L report :heart:
and one of my senior trader friend who do occasinal intrady shorting told me many times that if we are follwing the mkt , then we dont need to hedge

4 Likes
#5

Thanks for sharing Velmurugan Sir. I have been testing stuff on excel too. My idea is to identify the right strikes (both PE and CE) to short.

Just curious, how do you decide the strike prices. Do you go with a thumb rule saying + or - 300/400/500 points away from the spot or is there any other logic

#6

try to select call n put with same price range …

usually when i was experimenting , put bought as hedge use to cost higher than similar call

1 Like
#7

Hi - Can you pls elaborate with one example or with one of your trade done.
Not able to understand properly with screenshots. Thanks!

#8

sell both call and put and take advantage of time decay …

like sell 25600 CE and 25300 PE put 200points … have 20pt SL or 100pt move in bank nifty …
cover it whenever you want

2 Likes
#9

What day you look for to do such trade, or you are doing it everyday?

#10

@VelmuruganSengottai bro your strategy is for normal day trading and not for expiry?

For the past two weeks I saw that option writers are very agressive. Premium is very low today. So I tried long strangle after 2 pm between 25600 CE at 53.5 and 25700 pe at 52 RS .

I was expecting a 100 points movement but closed the trade at 25600 CE @ 12 RS and 25700 pe @ 120 RS.

One thing is strange that why the premium is very low just 5 points for in the money long strangle when banknifty is around 26650.

I am still looking for a way to increase my profits during expiry. Please share your thoughts

#11

You can use the app Risk - Strategize Your Trades - It will show you payoff graphs and help you identify precisely the points where your strategies will start giving losses. Also, it has option greeks calculated one the fly across option chain to help you figure out the delta risk you might be comfortable to get into or for balancing the hedge.

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#12

hi bro…

STT is 32 points for bank nifty … if BN expired exaxctly at 26550 , buyer of this strangle will get just 32 points and not 100 points …

i am looking for a safe strategy to play on expiry day in bulk … best is reverse butterfly for very short duration like 30 to 45mins …
like buy 25600 ce and pe and sell 25700 ce and 25500 pe … OTM decays way more than ATM options …

1 Like
#13

Yes bro, I did not consider the stt. My plan is to square off the position by 3.10 pm if target is not reached.

As I am watching banknifty for a long time I am 90 percentage sure that there will be atleast 50 points movement in any direction between 2.30 pm to 3.15 pm.

Usually there will be15 to 20 points premium for call or put alone. If that was the case, strangle will take a premium of minimum 20 rupees and my position would be in loss.

Luckily premium is very low about 5 or 6 rupees for entire trade and made a profit of 1000 rs per lot.

I would like to give your strategy a try so I can make money safely.

#14

Is there a web version for this app. I don’t want to install countless number of apps in my mobile

#15

I exactly know what you are talking about …
Alas. Its only an app … but this one is just 2 MB.

1 Like
#16

The best way to find the right strike price is by understanding the delta risk you are getting into and one you can sleep with. Hint - probability.

Look for those keywords and you will find your way out to the right strike prices.

#17

For the expiry day gamble, we don’t need to follow the greeks other than delta.

If strangle costs 70pts , it is straight forward to guess approximate value of the strangle if it moves by 50 or 100 or 200 points by looking at the next strike and deduct 5/10%.

Dont break your head , these are all probability trades and not technical trades.
And most books consider last week of option expiry as a different ball game.

1 Like
#18

your app keeps crashing. I am unable to use it properly!

#19

Hi rbtj,

Thanks for pointing out. It uses kite. And your token expired the next day. Everything should work fine if you logout and login … but it should not have crashed. We will fix this in next release. Thnx again.

#20

It did not work even after logout/login. Thanks. I have uninstalled the app.