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Hello Friends. My name is Michael Gonsalves. I have enjoyed reasonable success with Options strategies. I made Rs. 2.5 Cr in FY 2019-20 and Rs. 1.65 Cr till date in FY 2020-21 (see proof). I am eager to learn more and also to impart my learnings to others. If you have any queries, please ask. I will answer soon.

Dumb straddle (9.20 am) straddle

Started by Michael Gonsalves, Sep 14, 2021, 06:35 PM

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Michael Gonsalves

Sep 14, 2021, 06:35 PM Last Edit: Sep 14, 2021, 06:47 PM by Michael Gonsalves
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.


Michael Gonsalves

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.


Michael Gonsalves

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. 


Michael Gonsalves

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.


Michael Gonsalves

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.


Michael Gonsalves

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.


Michael Gonsalves

Today was also a rough day though I managed to reduce the loss from about Rs 30000+ to Rs 12300.


Michael Gonsalves

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.


Michael Gonsalves

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


Michael Gonsalves

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.


Michael Gonsalves

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.


Michael Gonsalves

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.


Michael Gonsalves

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.


Michael Gonsalves

Oct 07, 2021, 10:02 PM #13 Last Edit: Oct 07, 2021, 10:04 PM by Michael Gonsalves
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.


Michael Gonsalves

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.