Bank Nifty Iron Fly 30th Sept

[Michael Gonsalves]

For the first time, I increased my quantity in the Bank Nifty to 2000 units which is equal to 80 lots. The straddle is at 37800 and the wings are at 37000 and 38600. The BEPs are at 37200 and 38300. The max profit is Rs. 10.51 lakh while the max loss is Rs. 5.46 lakh. The capital employed in the trade is Rs. 51 lakh.

[Michael Gonsalves]

The Iron Fly, if it had been left alone, would have yielded a handsome profit of Rs. 209,000 as of date. Unfortunately, due to the extreme volatiliy, during which the Bank Nifty surged, and then plunged, and then surged again, I had to make repeated adjustments, which has caused a loss of Rs. 2.80 lakh.

[Michael Gonsalves]

The Iron Fly was a disaster. In the morning, the Bank Nifty plunged and so I sold calls at 38000, 37800 and 37500 to extend the breakeven on the lower side. However, soon thereafter, the Bank Nifty reversed and surged towards 38000, leaving me with no option but to cut my losses.

I squared off all the positions and entered into a brand new Iron Fly for tomorrow's expiry which looks like this:

[Michael Gonsalves]

Today's aggressive volatility in the Bank Nifty also took a toll. Thankfully, after a number of adjustments, I salvaged the situation with a profit of Rs. 1.19 Lakh.