Traders & Investors Paradise

Futures & Options Trading => Our Current Trades => Topic started by: Michael Gonsalves on Sep 14, 2021, 01:05 PM

Title: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Sep 14, 2021, 01:05 PM
Someone on Tradetron has set up a 'Dumb Straddle' according to which an ATM straddle in the Bank Nifty is sold at 09.20 am. There is a stop loss of 20% put on each leg. the straddle is allowed to expire at the EOD.

According to the data on Tradetron, the strategy was set up on 11th June 2020 and has generated a cumulative return of 150,000 in 310 trades. This means that the average return per trade is Rs. 483. (see link: https://tradetron.tech/strategy/15377)

As the margin requirement is Rs. 1.67 lakh for one lot of Bank Nifty straddle, the average return per day works out to 0.28%. This translates to about 5% per month, assuming there are 20 trading days.

(https://i.ibb.co/NW1BfYt/Dumb-Straddle-Bank-Nifty.png)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Sep 15, 2021, 03:34 PM
The Dumb Straddle Options strategy works especially well in trending markets. I did one today at the 36600 straddle. I did 10 lots (250) and put a stop loss of 20% on 100 units and 30% on the balance. When the CE stop loss was hit, I did a 36700 straddle. The CE of that also hit the stop loss. However, because the Bank Nifty kept trending upwards and closed at 36852, the PE legs gave a handsome profit.

My intra day profit from the Bank Nifty Dumb Straddle is Rs. 51,800.

(https://zerodha.trade/zerodha-uploads/Dumb_Straddle_Bank_Nifty.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Sep 16, 2021, 08:33 PM
Today was also a trending day and the Dumb Straddle succeeded. I first did the 37000 straddle and then the 37100 straddle. 10 lots of each. I put a 20% SL on 100 units and a 30% SL on the balance 150. I profited Rs. 10,900. 

(https://zerodha.trade/zerodha-uploads/Dumb_Straddle_Bank_Nifty_160921.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Sep 17, 2021, 04:25 PM
Today, 17th Sep, was a volatile day. The SLs on the CEs and the PEs were hit. However, I managed to eke out a gain of about Rs. 10000.

The strategy that should be adopted is that when the SL of one leg is hit, the SL of the other leg should be revised to the CMP + 20%. This way, if there is a rebound, at least some profits of the other leg are saved. Also, when the SL of one leg is hit, one can enter into a fresh straddle at the CMP.

(https://zerodha.trade/zerodha-uploads/Dumb_Straddle_Bank_Nifty_170921.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Sep 20, 2021, 07:59 PM
Today also was a wild day with both CE and PE SLs getting hit. I was staring at a MTM loss of Rs 40000 at one stage. However, with some luck, i managed to close at a gain of Rs. 8600.

(https://zerodha.trade/zerodha-uploads/20210920_195738600.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Sep 21, 2021, 03:58 PM
Today also was a volatile day with wild swings in the Indices. The MTM also swung between gain and loss. Thankfully, i was able to close with a gain of Rs 21800.

(https://zerodha.trade/zerodha-uploads/20210921_155333142.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Sep 22, 2021, 06:55 PM
Today was also a rough day though I managed to reduce the loss from about Rs 30000+ to Rs 12300.

(https://zerodha.trade/zerodha-uploads/20210922_185205975.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Sep 23, 2021, 04:01 PM
Today was a relatively calm day with the Bank Nifty moving only in the upward trajectory. So, after hitting the SL of the CEs, the PEs gave a handsome profit of Rs 28800.

(https://zerodha.trade/zerodha-uploads/20210923_155735135.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Sep 24, 2021, 02:46 PM
Today was no less in terms of volatility.  My SLs on both sides were taken off. Luckily, at 2.45 PM or so, i took off all the intraday positions and booked a gain of Rs 24800

(https://zerodha.trade/zerodha-uploads/20210924_144243129.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 01, 2021, 03:40 PM
The last couple of days witnessed a loss in the dumb straddle owing to the choppy nature of the markets.

Today, the 1st of October, i implemented a straddle and also a strangle with 10 lots in each.

This yielded a gain of about Rs 42000.

(https://zerodha.trade/zerodha-uploads/Dumb_straddle_011021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 04, 2021, 04:46 PM
Today was a calm day with the Bank Nifty behaving in an orderly manner. My 10 lots of straddle and strangle yielded a gain of Rs. 23000.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_041021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 05, 2021, 03:54 PM
Today also was a benign day though there was a breakout towards the second half. I made Rs. 36500 from the combo of 10 lots of straddles and strangles.

(https://zerodha.trade/zerodha-uploads/dumb-straddle-051021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 06, 2021, 04:31 PM
Today was a very rough day. The market fluctuated wildly. The SLs of the CEs and PEs were repeatedly hit. At one stage, i was staring at a loss of Rs 40000+. Luckily, i managed to reduce it to Rs. 11900 by the close.

(https://zerodha.trade/zerodha-uploads/Dumb_straddle__061021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 07, 2021, 04:32 PM
Today, i was very preoccupied with managing the positional Iron Fly in the Bank Nifty and Calendar in the Nifty. Both positions were in a terrible shape because I had made rampant adjustments and had lost track of what was happening.

Anyway, on the intraday dumb straddle cum strangle, i managed to make about Rs 10500.

(https://zerodha.trade/zerodha-uploads/Dumb_straddle_071021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 08, 2021, 03:35 PM
Today was a relatively benign day though some SLs did get hit. I managed to churn out a return of Rs 14800 through the combination of 10 lots of dumb straddles and strangles.

(https://zerodha.trade/zerodha-uploads/Dumb_straddle_081021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 11, 2021, 06:39 PM
Today was a rough and volatile day. In the first half, the markets surged and took out all the CE SLs. Later, the markets plunged and took out most of the PE SLs. The result was that I had to suffer a loss of Rs. 17000.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_111021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 12, 2021, 04:08 PM
Today was a choppy day with the Bank Nifty moving all over the place. I managed to eke out an income of Rs 7400.

(https://zerodha.trade/zerodha-uploads/Dumb_Straddle_121021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 13, 2021, 09:10 PM
Today, the Bank Nifty was relatively well behaved though it did take out my PE SL before surging upward and threatening the CE SL. Thankfully, not much damage was done and I could take home a gain of Rs. 9900.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_131021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 19, 2021, 01:37 AM
The extreme volatility under which the Bank Nifty moved from one end to the other, took a toll on my dumb straddle. I made a loss of Rs. 13900.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_191021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 19, 2021, 09:37 PM
Today, a handsome profit of about Rs 17000 was converted into a loss of Rs. 8900 due to the uncontrollable volatility. The SLs on both sides were hit.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_191021-2.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 20, 2021, 08:32 PM
Today, I managed to eke out a gain of Rs. 8600 from the dumb straddle.

(https://zerodha.trade/zerodha-uploads/DUMB_straddle_201021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 21, 2021, 06:53 PM
I got badly trapped by the extreme volatility. In the morning, the Bank Nifty had plunged and short Puts had hid their SLs. The short Calls were in hefty profits of Rs. 30000+. However, the savage surge in the Bank Nifty in the second half took me by surprise. Unfortunately, I had not changed the SLs so as to lock in some of the profits. Also, I was very preoccupied with managing the Calendars, which were also in trouble. The result is that I had to book a loss of Rs. 58000.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_211021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 22, 2021, 10:43 PM
Today, also, I got ripped up by the extreme volatility. The chart shows how the Bank Nifty plunged and then surged and then plunged and then surged ..., tearing up all the SLs.

(https://zerodha.trade/zerodha-uploads/bank_nifty_chart.PNG)

I suffered a heavy loss of Rs. 32000.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_221021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 25, 2021, 08:28 PM
Today also was a crazy volatile day. The Bank Nifty opened at 40500 and plunged. Thereafter, without warning, it surged a mind-numbing 1300 points and crossed 41800. I managed to salvage the Dumb straddle with a manageable loss of Rs 4100.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_251021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 26, 2021, 05:51 PM
Today also i was lucky to escape without major loss. The movement of the Bank Nifty was totally unpredictable. It hit all the SLs and made life very difficult.

(https://zerodha.trade/zerodha-uploads/Dumb_straddle_261021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 27, 2021, 10:24 PM
Today was an equally aggressive day. However, with a stroke of luck, i managed to get a gain of Rs. 25200.

(https://zerodha.trade/zerodha-uploads/Dumb_straddle_271021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Oct 29, 2021, 09:30 PM
Today, I had the bad experience of watching a handsome profit of Rs. 20000+ morph into a horrible loss of Rs. 66000. The CE SLs were hit and the Puts were doing well. Unfortunately, the market reversed and I did not react in a timely manner until the PE SLs were also hit. This put me in a sorry position indeed.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_291021.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Nov 01, 2021, 05:46 PM
Today also there was a dramatic shift in the Indices which saw my MTM profit turn into a loss and then into a profit. Luckily, I salvaged a profit of Rs. 10800.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_011121.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Nov 08, 2021, 10:13 PM
Though the Bank Nifty started off on a Bearish note and did a sudden reversal, I was able to make a gain of Rs. 15900 from the Dumb Straddle.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_081121.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Nov 08, 2021, 10:40 PM
Somebody rightly stated that there is not much point in doing the Dumb Straddle on an intraday basis and exposing oneself to unnecessary stress. There is also no margin benefit now. Instead, the sensible way is to implement the strategy on a positional basis, with full protection against Black and White swan events.

Also, as it is a protected strategy, one can deploy larger sums of money into it.

For the ongoing week, I chose strikes which are of the same price as this will give it some degree of neutrality. Though, it is technically not a "straddle", it achieves the same purpose.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_Iron_Fly_011121.jpeg)

 
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Nov 11, 2021, 04:25 PM
I had to make adjustments to cope with the plunge in the Bank Nifty. At one stage, I saw that my MTM was more than the maximum possible gain (at the lower end) and so I exited prematurely with a gain of Rs. 67000.

(https://zerodha.trade/zerodha-uploads/iron_fly.PNG)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Nov 12, 2021, 06:05 PM
The Dumb straddle is not really "dumb" as there are adjustments made to it. I made a couple of adjustments which enabled me to make a profit of Rs. 14300 on 10 lots of CE and PE.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_121121.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Nov 15, 2021, 06:46 PM
Today, I was a bit slow in making adjustments. There was also an increase in the ViX. This caused me to book a loss of Rs. 4700.

(https://zerodha.trade/zerodha-uploads/dumb-straddle-151121.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Nov 16, 2021, 04:53 PM
Today was a green day with a profit of Rs. 12500.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_161121.jpeg)

Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Nov 17, 2021, 08:08 PM
In addition to the 10 lots of the Dumb Straddle, I figured out that 38500 would be a resistance for the Bank Nifty as it had earlier tried to cross it two times and failed. I sold 8 lots naked of 38500 and of one other strike. This enabled me to make Rs. 21000.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_171121.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Nov 22, 2021, 08:55 PM
A real dumb straddle would have worked well today and given hefty gains because the market was trending on the downside. However, I tried to make adjustments and could not cope. I lost Rs. 16500.

(https://zerodha.trade/zerodha-uploads/dumb_straddle_221121.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Nov 30, 2021, 06:13 PM
Today, I tried to be directional. When the market opened gap-up, I sensed that there would be a short-covering rally. I saw on the chart that there was support at 35500PE and so I sold 10 lots of Puts. I trailed the stop loss. When the market reversed and the TSL was hit, I sold the 37000 CE because that appeared to be a point of resistance. The gambit worked and I could make Rs. 15000 for my efforts.

(https://zerodha.trade/zerodha-uploads/dumb-straddle-301121.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Dec 03, 2021, 04:15 PM
Today, I increased my lot size to 500 units (20 lots) from the usual 10 lots. Luckily, the day was trending (downwards). Though there were a couple of whip-saws, I put a tight trailing stop loss and escaped without squandering away the gains. My total take-home is about Rs. 62000.

(https://zerodha.trade/zerodha-uploads/dumb-straddle-031221.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Dec 07, 2021, 12:05 AM
Today, the Bank Nifty displayed violent movement on both sides which put my dumb straddle in a difficult position. I lost about Rs. 32000 today.

(https://zerodha.trade/zerodha-uploads/dumb-straddle-071221.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Dec 07, 2021, 04:08 PM
Today, I goofed up. I thought the market would be weak and so I sold the 36500 Call. However, the market was aggressively bullish and surged 1000+ points. I tried to salvage the situation but the damage was done. I ought to have done a dumb straddle. On trending days, the Dumb straddle works well. I lot a chunk of Rs. 33500.

(https://zerodha.trade/zerodha-uploads/dumb-straddle-081221.jpeg)   
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Dec 10, 2021, 09:10 PM
I was coasting on profits of Rs. 17,000. However, a sudden move in the Nifty and the Bank Nifty spoiled the show. I exited the Dumb Straddle in a hurry and salvaged a gain of Rs. 6900.

(https://zerodha.trade/zerodha-uploads/dumb-straddle-101221.jpeg)

Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Dec 13, 2021, 06:09 PM
Today, I treated the Dumb straddle as a dumb straddle and did not make any adjustments. The market was trending downwards. After the short PE SL was triggered, I trailed the SL on the short CEs. This enabled me to take home a gain of Rs 41500. Unfortunately, I had curtailed my position to only 200 units in view of the past losses and this reduced my gains.

(https://zerodha.trade/zerodha-uploads/dumb-straddle-131221.jpeg)
Title: Re: Dumb straddle (9.20 am) straddle
Post by: Michael Gonsalves on Dec 14, 2021, 10:50 PM
Today's volatility was too rough to handle. After the PE SLs were hit, the CE SLs were also hit, causing me to lose a big chunk of Rs. 56000.

(https://zerodha.trade/zerodha-uploads/dumb-straddle-141221.jpeg)