Suryameet's Strategy - Trading Diary

[OptionQuant]

Dear friends,

Suryameet 25 has put forward a strategy that has impressed me -


http://www.traderji.com/options/104...intraday-strategy-without-any-analysis-7.html


I have decided to try it out with real money, but only one lot (30K margin). I will post results here


June 27, 2017

Loss of 1350Rs. Loss was because BN bobbed around pivot line 10 times! Each time I lost 10 points. Total points lost = 10points x 10 times x 40 units = 4000. This was reduced from the profits I made on same day.


June 28, 2017

Profit of Rs 2050

 

[aces27]

Thanks OptionQuant.

Even I found the strategy to be conceptually sound.
Intending to try it myself :

Can you please check below , this is my understanding :
Please advise if to modify. I shall also note them as rules and also post my results here (if alright with you).



Key Idea :
Being Short Straddle. Eating up the time decay.
Key Risk of Short Straddle is the price moving out of range , that too quickly.
How to handle risk : Buy / Sell Future at/within the Straddle breakeven points.
If market is within the Straddle Profit Zone , you make a profit.
If it jumps out , future will mitigate the risk.


Observation (10:00 AM) :
Note :
1. Spot Price
2. ATM/ITM CE Price and ATM/ITM PE Price
3. Future Price

Orders :
1. Sell ATM CE and PE (ATM based on SpotPrice)
Note two points :
UL (UpLimit) : Spot + 20 points
LL (DownLimit) : Spot - 20 Points
2. Buy Future , if FuturePrice > UL
else Sell Future if FuturePrice < LL

Monitor :
If you are Long future , monitor it.
If FuturePrice falls below LL. Close Position by selling. Sell one more lot.
If you are Short future , monitor it.
If FuturePrice goes above UL. Close Position by buying. Buy one more lot.

If FuturePrice is bwtween LL and UL. Remain as such - No new Open Postion in Future.
This is the position where the Straddle is most profitable. Loss in Future should be tolerable/offset.

End Of Day :
Close all positions / Carry Forward one more day if in close proximity of existing straddle

 

[.Strategist]

The same strategy was tried by Linkon7 on nifty years ago. He found it was unprofitable because of the overnight gaps.
It may be possible on weekly options without overnight carryover. I will watch your progress.

 

[OptionQuant]

June 29, 2017

Profit of Rs 2410

 

[aces27]

Hi ,

It would be beneficial , if you can post more details of the trade.
The CE / PE selling price. Future Price bought. Sold.
All Trades undertaken.

Will help understand better.

Thanks

 

[OptionQuant]

OK, aces. I'll do it.

 

[mohan.sic]

The same strategy was tried by Linkon7 on nifty years ago. He found it was unprofitable because of the overnight gaps.
It may be possible on weekly options without overnight carryover. I will watch your progress.

Linkon7 used this trading idea on positional basis.
Losses due to entry/exit's in future positions can be easily taken care by profits from time decay. Overall it's a good trading plan in theory, but he backed off may be because he felt it not feasible in all conditions. Linkon's views are very practical and ideal.

But here I don't know how it is being used for intraday. How is Time decay possible in intraday.. I think its not written properly.

 

[OptionQuant]

Mohan,

In weekly BN, time decay intraday is a certainty

 

[OptionQuant]

June 30, 2017

Loss of 1800

Dear Aces,

I had promised to give trade details, but I made a lot of errors in trading, some mistakes. So not giving details as it would be confusing. But will give them hereafter. Thanks

 

[OptionQuant]

June 30, 2017

Loss of 1800

Dear Aces,

I had promised to give trade details, but I made a lot of errors in trading, some mistakes. So not giving details as it would be confusing. But will give them hereafter. Thanks