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Dumb straddle (9.20 am) straddle

Started by Michael Gonsalves, Sep 14, 2021, 01:05 PM

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Michael Gonsalves

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.


Michael Gonsalves

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.


Michael Gonsalves

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.


Michael Gonsalves

Today was a green day with a profit of Rs. 12500.




Michael Gonsalves

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.


Michael Gonsalves

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.


Michael Gonsalves

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.


Michael Gonsalves

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.


Michael Gonsalves

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.


Michael Gonsalves

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.

   

Michael Gonsalves

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.




Michael Gonsalves

#41
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.


Michael Gonsalves

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.