Hello, The market today executed a short straddle trade that resulted in an overall loss. I’d love to hear your thoughts on what could have been improved, or if you have any other advice.
Nifty 17100 CE @ 131
nifty 17100 pe @ 127
pe sl hits at 191 as markets fall
Holding ce until the market’s full closing time ended up closing at 125 with an overall loss
If you have any advice, please let me know what was good
thank you
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Were you using Sensibull or Opstra before deploying these strategies?
No, I was aware that Opstra is only for backtesting and for live data you have to pay a subscription
Update yourself and let us know if you need to include it in your daily strategy.sure to add
Options are risky, so it’s a good idea to review your strategy before deploying it in real time. You will know how much you will gain or lose before the market opens. Of course, if the premium changes, the profit and loss will also change, but it will give you a good idea in advance.
You can also try out different adjustment scenarios to increase profits or reduce losses in advance and be ready when the market opens. That market doesn’t surprise us, but at least we have some idea of the loss. sale.
I’m saying this because I use Sensibull. I don’t know about Opstra.
The way I got to this is by purchasing an opstra subscription there.We have an options simulator and we tested straddles rigorously purely during the day and showed good log term payoffs were positive so we then took a paper trade and executed
Of the 17 trading days from the first day of actual rollout, only 2 are red
The problem is that if it’s green it ends very quickly and tends to hold it according to the rules I’ve backtested, like in today’s example if it’s red. The result is that these two days have eaten up the green days and are now at 0.
So I wrote this here hoping to seek advice on what perhaps I did wrong
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I have almost the same experience as you.
So why not trade positions, deploy these strategies only during the day, take profits early and wait until EOD for the market to reverse? Set a target and stop loss before trading. Why take profit early if you didn’t?
I’m not sure if the backtesting rules work 100% the same in the real market. Especially when the market is unpredictable and both calls and puts go up and down.
And what was your view today? Did you choose the short straddle thinking it would be rangebound?
As an aside, 17 trades with no profit or loss would not be too bad compared to the experience I have had in the market.
I think you are probably right. I’m sticking with red, so I still need to have a green day. Today, I was aiming for a range bound. The premium was good, so the 100 points plus or minus was good, but I think the gamma probably spiked.this
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It works most of the time, but just one big gap up or down and you lose the whole profit. It also depends on the day you take it. From Thursday to Friday, there may be many days when you don’t work. Additionally, we assume premiums will fall, but what if premiums pile up before the event or volatility increases? And there are things that cannot be measured. That is market sentiment. One value may increase and the other may not. You need a lot of understanding of the bottom line before you do it naked.Margin benefits allow you to take more lots, but more lots means you become more leveraged, defeating the purpose of risk management
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Selling options is best done intraday near or on the expiration date. Always use stops or hedges. Hedging can also reduce your margin requirements.
There are multiple platforms where you can backtest your options strategies for free
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thank you for sharing.I’ll look into Sensible and let you know if I have any further questions
Hi, I tried the sensibull vwap and option pricing you shared, but I had some questions. This is on the short side and we want to collect the maximum premium, so the logic is to buy spikes and exit cool. ,
Also, if there is a detailed video somewhere or an article I can share about this that walks you through it step by step, I think that would be a good start to make a real comparison in real market time.Return to existing strategies for effectiveness
thank you
There is no one size fits all shirt. Depends on your risk profile, the length of the strategy you want to do. For YouTube, I don’t have a channel, but typing Straddle shows thousands of videos as the best-selling.Strategies on Earth. All Tom Dick and Harry sell courses on straddles There are hundreds of varieties.
The bottom line is risk management, position size, IV, and direction.no correction formula
Just one quick question and let me know if my understanding is correct
Given a spot of 17000, looking for an OTM option with a delta of about .16 and a theta of about 5, this is a thin It means that you can expect things to come from points to deal with if gamma spikes, just in case
One suggestion is to read the varsity and sentimental lessons.
Then check the options chain, price and delta. Read about synthetic futures and analyze the total ATM premium over time, the premium difference between two strikes, and more. The rest is up to you to understand. We also do paper trading.