DTBhat Profile picture
May 7, 2023 19 tweets 9 min read Read on X
I am sharing an options trade and its adjustments which I did recently. I had goofed up in one of the straddle shorts in Nifty. At one stage I was down nearly 1.5% of total capital but with some hectic adjustments and (some luck) I could escape with almost no loss at the end.
1/n
1) Initiated a #Nifty straddle at 17850 strike on 26052023 for 04052023 expiry at fag end of the day at 15:29 . I had forgotten about this trade as I was on holidays from 27052023.
2/n Image
2) I did not check the status of straddle on 27052023. Status at the beginning and end of the day
3/n ImageImage
3) I did not check the status on 28052023 (Friday) with a longer weekend ahead due to trading holiday on 01052023 (a risky proposition)
Notice that the breakeven already breached on CE side
4/n ImageImage
4) Next day (on 01052023) Nifty gapped up and my position was bleeding.
5) On 02052023 at open - loss was 56K
5.1) First bought 18000CE (at 09:16:22)
5.2) shorted 18150PE (at 09:17:18) - loss at 9:20 was 59K
5/n ImageImage
6) Shorted 18150CE (9:21:46) - idea was to shift the short straddle to 18150 strike and convert to a broken wing fly
7) bought 18250CE (9:26:00) - Loss 60K
8) bought some OTM hedges on PE side - 17500PE
6/n ImageImage
9) Closed 17850PE and added to 18150PE (still holding 17850CE) (10:10:52)
10) Next shifting CE leg inside to 18200CE (did delayed shifting) Loss now at 67K
11) Next set of adjustments between 11:25 and 11:27
7/n Loss at 70K ImageImage
12) Converted strategy back to straddle at 18150 (idea was to buy hedges before close and gain on intraday theta decay)
13) closed all buy legs of CE and also covered 17850CE
14) now had 20 lots of straddle at 18150 with far OTM hedges (loss at 70K now)
8/n ImageImage
On 02052023 - Traded an intraday strangle 18100PE-18250CE (profit approx 5k)
At EOD 0n 02052023 - loss had comedown to 55 K
Carried a highly risky position.
9/n ImageImage
On 03052023 - Nifty gapped down and the position was still hopeless with loss back above 65K
continued...
10/n ImageImage
16) Did not do any adjustment till 15:05. Strategy loss has reduced to 50K and breakeven was broken on PE side. Decided to shift straddle to 18100 and convert to an Ironfly to mitigate overnight risk
11/n ImageImageImage
17) On 04052023 - Nifty opened at most favorable position and loss came down to 41k
Removed buy wings and bought far OTM hedges
12/n ImageImageImage
13/n
18) At 10:10, Nifty was going up. to reduce risk on CE side and increase the range, shifted CE leg to 18150CE
19) Now if Nifty expires between 18100-18150 I thought I will escape with no gross loss !!!!
20) Did some directional selling
14/n ImageImage
14/n
At 14:05 loss had reduced to 3k - only two PE sold positions at this stage
At 14:30 - loss free at gross level!!!!
15/n ImageImageImage
15/n
At 14:45 only one position was open
Closed at 15:25 with Gross profit of 2+ k
One hell of a series of adjustments !!!!!!!!
Net loss was around 8K after expenses
16/n ImageImageImage
Lessons learnt -
1) Never carry overnight positions without proper hedges
2) Do not carry positions without hedge if you are likely to be away from terminal even for a couple of days
3) In case of directional moves, quickly adjust with directional view at least for intraday
17/n
17/ You need real luck if things go completely wrong to come out with minor injuries
This strategy was executed in an account with 50L capital. Normally I do not trade Delta Neutral Nifty Options Strategies in this account. It seems I had a brain fade at 15:29 to initiate this strategy!!
Look at the time of execution - 15:29:45 - Phew!!! Image

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More from @dtbhat

Sep 14, 2023
Options strategies - In this thread I will explain how a profitable CE buy position can be adjusted to reduce risk. Guess my choice. I will reveal it tomorrow.
1) I had taken a 20100CE long today at 111.2 about an hour before close. Image
2) Shift 20100CE to 20200CE (50 delta to 40 delta). The payoff will be like this.
Max risk reduced to half Image
3) Convert to a bull call spread.
* Shift 20100CE to 20200CE
* Short 20300CE - same qty Image
Read 4 tweets
Mar 5, 2023
#BankNiftyOptions #IronFly
On popular demand I am sharing the adjustments I made to get out with good profits.
1) BNF started trending - brought the CE buy leg inside to 41000CE (at 9:27)did not exit 41100CE (delayed shifting)
2) Naked selling 40600PE (at 9:42 ) using #DOS
+2/n
+2/n
3) exited 41100CE (10:03) and added 40600PE (at 10:22)
4) Now thought of adding a broken wing fly at 41000 (at around 10:22). Brought the buy wing to 40900CE
5) Abandoned the idea and closed 40900CE and 40500CE (part of original IFLY at 10:25)

+3/n
3/n
6) Created a debit spread at 41000CE - 41500CE
shorted 41500CE (at 10:27)
7) BN was nicely trending- did delta drifting to 41100CE, 41200CE
8) At this stage thought BN might do mean reversal and prepared for creating BFLY at 41300-41500-41700. So bought 41700CE (11:36)
+4/n
Read 5 tweets
Feb 16, 2023
A thread to demonstrate how a profitable options trade can be converted to a crown strategy. Learnt this recently from @NiftyOptionss
I had initiated a naked put sell on 31-Jan-2023
1) Sold 4 lots 17000PE
2) Shifted to 4 lots 17500PE
3) Today shifted to 18000PE
+ 1/n ImageImage
4) Convert to put butterfly at 18000 strike
-5 lots 18000PE
+5 lots 18200PE
+5 lots 17800PE

2/n ImageImage
5) Add a put butterfly
+ 5 lots 17800PE
- 10 lots 17700PE
+ 5 lots 17600PE

3/n ImageImage
Read 4 tweets
Sep 25, 2022
IronFly simulation - Initiated IRONFLY on 01.Sep.2022(Thursday for next week expiry)
ATM Straddle has premium above 350, initiate wings slightly inside this range
+2/n
+ 17250PE
- 17550PE
- 17550CE
+ 17850CE
2/n
02-Sep-22 (Friday) 9:20 Nifty inside the wings
02-Sep-22 (Friday) 15:20 Nifty inside the wings
No adjustment
+3/n
3/n
05-Sep-22 (Monday) 9:20 Nifty inside the wings
05-Sep22 (Monday) 15:20 Nifty inside the wings
No adjustment
+4/n
Read 7 tweets
Apr 24, 2022
Let us discuss a simple pullback scanner which I use for swing/positional trades.
1) I am looking for stocks which have become oversold recently (as per PMOX indicator) and positive column reversal has taken place.
2) To achieve this I look for PMOX - oversold either in column 1
or column 3.
3) Check whether column reversal has taken place in the current column (at column 0)
4) Next I am adding a few filters -
* Price above MA
* No of boxes in the latest column is less than 10 (this is to limit my SL)
* The stock is not in PMOX bullish momentum. The logic behind this condition is to avoid stocks which are already in bullish momentum.
This scanner is published in TradePoint-Web. Look for
"PMOX-BuyWhenOversold" under Point And Figure Image
Read 5 tweets
Jan 30, 2022
A small multi time frame system to identify stronger stocks based on RSI/SuperTrend/EMA
@Definedge
Conditions:
a) RSI > 55 < 70 in daily
b) RSI > 60 in weekly/monthly
c) Candle close above SuperTrend(10,3)
d) Candle close above 200EMA in daily and 34EMA in weekly/monthly
+
I have published these scanners in TradePoint Web of @Definedge. These scanners can also be developed in TradePoint Desktop.
1) Run these scanners on Multi Time Frame Scanners
+
Save the qualified candidates (score above 2) to a group for doing further analysis.
+3
Read 6 tweets

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