Traders & Investors Paradise

My Calendar trade for the week ended 7th October was a fiasco. When the market plunged, I heavily sold many naked CE options. I also rolled down the short positions. However, when the market reversed and surged, I was caught on the backfoot and had to roll up the positions.

Ultimately, there were so many adjustments that I lost track of what I was doing and should be doing.

This week, I intend to be very disciplined and not make any adjustments until the Break even point is reached.

As of today, the short call at 17800 is bleeding profusely though it is more than compensated by the long calls. The strategy is presently showing a MTM gain of Rs 35000 which is about 1.5% of the margin deployed. Hopefully, if the market stagnates in the next few days, more gains may be available.

When the market crosses 18000 today, I was tempted to make some sort of adjustment because my short call was bleeding profusely. Luckily, I restrained myself, remembering my promise to stay disciplined and not make any adjustments until the BEPs are breached.

This was a fortuitous decision because the Nifty later retraced to 17945, coupled with a mild increase in the ViX.

This led my position to show a MTM of Rs. 80000.

The steep surge in the Nifty has put my Calendar in a precarious position though it is still in the green by about 1.5%. In hindsight, it might have been better to shift the short strike upward as it would have bled less as compared to the present one which is dèep ITM.

Tomorrow, i might square off the Calendar and open a new one at 18000.

The surge in the Nifty to 18140, led by the 19% rise in Tata Motors, took my Calendar beyond the upper BEP. I squared off all the positions in the Calendar so as to be able to think straight and without pressure.

Luckily, though my short call of 17800 was deep ITM, I escaped with a nominal loss of Rs. 9500. 

I opened a new Calendar on the Nifty at 18150 and 18200. My timing was fortuitous because the decay coupled with an increase in the ViX led to a MTM gain of about Rs. 40000.

The Calendar yielded a gain of Rs. 90,000. The profits were truncated because of the fall in ViX.