Dumb straddle (9.20 am) straddle

[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]

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.