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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

Today was a rough and volatile day. In the first half, the markets surged and took out all the CE SLs. Later, the markets plunged and took out most of the PE SLs. The result was that I had to suffer a loss of Rs. 17000.


Michael Gonsalves

Today was a choppy day with the Bank Nifty moving all over the place. I managed to eke out an income of Rs 7400.


Michael Gonsalves

Today, the Bank Nifty was relatively well behaved though it did take out my PE SL before surging upward and threatening the CE SL. Thankfully, not much damage was done and I could take home a gain of Rs. 9900.


Michael Gonsalves

The extreme volatility under which the Bank Nifty moved from one end to the other, took a toll on my dumb straddle. I made a loss of Rs. 13900.


Michael Gonsalves

Today, a handsome profit of about Rs 17000 was converted into a loss of Rs. 8900 due to the uncontrollable volatility. The SLs on both sides were hit.


Michael Gonsalves

Today, I managed to eke out a gain of Rs. 8600 from the dumb straddle.


Michael Gonsalves

I got badly trapped by the extreme volatility. In the morning, the Bank Nifty had plunged and short Puts had hid their SLs. The short Calls were in hefty profits of Rs. 30000+. However, the savage surge in the Bank Nifty in the second half took me by surprise. Unfortunately, I had not changed the SLs so as to lock in some of the profits. Also, I was very preoccupied with managing the Calendars, which were also in trouble. The result is that I had to book a loss of Rs. 58000.


Michael Gonsalves

Today, also, I got ripped up by the extreme volatility. The chart shows how the Bank Nifty plunged and then surged and then plunged and then surged ..., tearing up all the SLs.



I suffered a heavy loss of Rs. 32000.


Michael Gonsalves

Today also was a crazy volatile day. The Bank Nifty opened at 40500 and plunged. Thereafter, without warning, it surged a mind-numbing 1300 points and crossed 41800. I managed to salvage the Dumb straddle with a manageable loss of Rs 4100.


Michael Gonsalves

Today also i was lucky to escape without major loss. The movement of the Bank Nifty was totally unpredictable. It hit all the SLs and made life very difficult.


Michael Gonsalves

Today was an equally aggressive day. However, with a stroke of luck, i managed to get a gain of Rs. 25200.


Michael Gonsalves

Today, I had the bad experience of watching a handsome profit of Rs. 20000+ morph into a horrible loss of Rs. 66000. The CE SLs were hit and the Puts were doing well. Unfortunately, the market reversed and I did not react in a timely manner until the PE SLs were also hit. This put me in a sorry position indeed.


Michael Gonsalves

Today also there was a dramatic shift in the Indices which saw my MTM profit turn into a loss and then into a profit. Luckily, I salvaged a profit of Rs. 10800.


Michael Gonsalves

Though the Bank Nifty started off on a Bearish note and did a sudden reversal, I was able to make a gain of Rs. 15900 from the Dumb Straddle.


Michael Gonsalves

Somebody rightly stated that there is not much point in doing the Dumb Straddle on an intraday basis and exposing oneself to unnecessary stress. There is also no margin benefit now. Instead, the sensible way is to implement the strategy on a positional basis, with full protection against Black and White swan events.

Also, as it is a protected strategy, one can deploy larger sums of money into it.

For the ongoing week, I chose strikes which are of the same price as this will give it some degree of neutrality. Though, it is technically not a "straddle", it achieves the same purpose.