Review for weekly Iron Condors on Nifty

Hey guys…
What are your trading results on weekly iron condors on nifty?
Is it profitable strategy?
What about adjustments in trending markets?
How it is better than Iron flys?

Please share your views…

@TradeB2B @siva

I have done both of these without hedges, i.e. straddle and strangle.
Straddle adv:

  1. high premiums received, therefore, more range
  2. high theta decay
    straddle disadvantage:
  3. Adjustments needs more margin
  4. high fluctuations in MTM

you can reverse the advantages and disadvantages for strangle.

Even though I do not take hedges throughout the day, I place hedges at 3.25 and remove by 9.20 next day

Coming to profitability, 2% per month is doable, but one should identify a trending day and exit at least if you cannot ride the trend

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Yes i agree 100% to your last line
I made strangle 18100 pe and 18300 ce on Tuesday but market kept falling.
I kept on adjusting the call side until straddle was formed.

Finally had to come out with a loss (2 weeks profit gone in this week)

I wanted to know better adjustment ways…
please share your experience
@MohanKri

if you have additional margin, could’ve sold calls above 18100, else you can move the straddle lower.
But, if you trading less than 5 lots, then it’s not worth the adjustments as brokerage will eat up whatever profits you make

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I too do something similar and I sell Deep OTMs only on Friday
My range for nifty was 17600pe and 18800ce. As market kept falling I kept getting my calls strike closer. On the day of Expiry I had sold 18k call.
I am active whole day in front of the screen. I was ready to move 17600pe lower but somehow held on to it. So overall good premium received.
My target is just 0.5percent per week. So on annualised basis it comes around 30percent.
Brokerage isn’t that big an issue for me because I trade in max allowable order quantity.

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Great !!
How long have you been trading Jason?
And when did you started selling options?
What is your trading capital?
:slight_smile:

I started with mutual funds in 2015 and then started equities in 2016 for long term. But this is more of investing than trading.
Started options in Jan 2020 but was just experimenting with small capital of Rs.1Lakhs.

May 2020. So almost 20 months now.

At any given point I would have option positions in 18,000 to 20,000 quantities of nifty calls and puts.

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Good to hear @Jason_Castelino . I believe you’re doing a short strangle.
Can you please tell me if you prefer it over straddle? If yes, can you share your rationale behind it?
Thanks in advance

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There is too much movement in straddle. With deep OTM strangle most of the options expire worthless. So in past 2 years only 6 times my stop loss was hit.
And this means like loss of 1 percent of my total capital.
So I have totally lost around 6 percent in aggregate. On net basis I make around 25 to 30 percent per annum and am more than satisfied with this.

Straddle may work if am super active in front of the screen.

2 Likes

thanks a lot for sharing @Jason_Castelino .
If it’s not too much to ask do you keep 1% of your capital as MTM as SL? or do you look at other metrics too?
Reason I’m asking is, I bring legs closer till it becomes straddle, and Usually end up losing more.

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Usually I sell options having delta 0.1. These give me total of 10 to 12 points if I consider nifty. So the moment this pair goes to 40 I trigger the stop loss and move the strike even further. If stop loss is hit usually that week I lose around 1 percent of my capital.
In addition to delta I even check for IVs, theta and PCR

If I have to give you for this week, yesterday I had sold 15500pe and 19kce for combined 25 points. In this week its more because of higher IVs.
If it was other weeks I would have shifted put strike to 16k. But this week I will just hold at least till Tuesday.

This has worked for me so far. I might lose out big someday. Do your own study.

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Whats your view on doing an iron condor on short 350-400 points away from spot with 150 long options to hedge both sides?

And moving the untested side closer in case market falls/rallies…

I’m doing it on trial basis since 4 weeks and results so far are good (0.7-1% ROI weekly) except the last week where it was crazy fall and i didn’t have much experience to manage my positions.

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Personally I am not comfy doing this. Moreover if you shift your strikes it can hunt your SL on both sides.

Just the last week if we consider I guess the expiry was near 17700. So your 400 points would be 17300 to 18100. Friday it fell below 17500 before it recovered. You would have shifted to 17200 to 17900. And Monday it fell to 17k. Here you must have shifted to 16600 to 17400. The way it rallied on Tuesday until 17300, you must have shifted again to 17k to 17500. And yesterday it again went to 16800 and ended 17100.
So almost everyday you must have lost.

My initial range was 16800 to 18500. I had to make one shift on Monday 16500 to 17500 and I held on to it till expiry. On net basis I still made small positive. We will get around 5 to 7 such weeks in a year. So I am ready to lose in these weeks. Yes, I would lose more if there was no recovery on Tuesday. In such a case I would close my put position and buy nifty futures. Some day or the other nifty may be 10 years down the line it will come back to these levels right. I am okay with that too. I can keep selling higher calls till then.

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I usually take trades on Tuesday only and hold it till Thursday and do adjustments in between if the market moves in one direction. Since we get most decay advantage from Tuesday onwards, and on Fridays and Mondays there’s not much of a Theta decay.

Thanks for your expertise Jason!!! Looking forward to learn more from you… I am also aiming for 3-5% monthly returns.

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thanks @Jason_Castelino and @Nidal for making this thread

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Welcome @MohanKri and we would like expert options writers to add their expertise on subjects such as short strangle, straddle, iron condors iron flys, etc. to help retail traders like us…

@t7support @siva @Karthik @ravika @sudheer_kumar @RMMENON @ManoranjanS

What @Jason_Castelino suggested looks good, but one will need to keep their size small. Make sure you dont get smothered even if stop losses are hit 5 consecutive times. Also ensure you survive atleast 2-3 consecutive ferocious moves.

@Jason_Castelino
How did this strategy do during the covid fall/rise period ? Did you trade this?

2 Likes

I totally agree. It’s not as easy as I might have sounded. You have to trigger your stop loss.
Last two expiry that is NOVEMBER and December I was able to only make 1.5percent on net basis.
Write down your rules and strictly follow them.
As I have mentioned earlier for this week I had sold 15500 for 15 points on Thursday. I didn’t shift it to 16k on Friday. I could have easily added 5 points. 15.5k is trading at 6 even now for a reason. So don’t let your greed get better of you.

I was doing it little differently. I started with this strategy when nifty was at 8900. I was ready to buy whole of nifty at these levels. So I started with selling 9500pe and 10kce weekly option. My plan was to keep rolling 9500 for as long as it goes OTM. I was also backed up with even capital to buy all the qty in cash at these levels. This worked for me.
Even now the qty of 15500 I have sold is backed by enough cash. So let’s say on budget day nifty fall to 15500 I will go long on nifty futures and keep rolling them as long as it takes. Will definitely keep selling higher calls.