Trading Straddles using NR7 setup

#1
Hi all,

Can we trade (Buy) straddle/strangles using NR7 set up.

Ideally they should be implemented when volatility is low, thats when you get them cheap, so assuming NR7 day occurs after period of decreasing volatility, I think buying of Straddle makes sense.

My plan:
1. On a day NR7 is likely to occur say at aroung 3:15pm we might be aware that today would be a NR7 say, buy a straddle.
2. Next day sell out one leg which is loss making (ie market moved in oppposite direction); hence you have one leg open which will be in the direction of market
3. After say a pre determined target of say 200 points movement sell the profitable leg.
4. SL still not though about it ( may be when premium paid becomes half)


Opinions invited, strategy still inception phase, meant only for those who cant be full time trader
 

Sunny1

Well-Known Member
#2
Hi Jain.

I am too thinking straddle/strangle recently .

But my base is different.
Nifty makes movement of about 250-1000 points every month execpt 1 or 2 months.
My idea is to buy straddle at start of month ( i.e., exactly next day of expiry)
you will get straddle at average cost 200 rs.considering 100rs each leg...
when anyone one leg reach above 300 rs...sell it (this will happen when nifty moves more than 250 points)

when the month goes thru narrow range and our both options expire worthless we can double the lot size for next month trading as after narrow range month nfity will explode at least 500 points..

So my plan is based of min range of nifty every month and yours is based on nr7...
 
#3
I am attaching a file showing OHLC data for Nifty spot

in the file the is a col. called range and in the last col. where ever there is a value that day NR7 is triggered.

So the trick is to assume that day we buy straddle/ strangle and the see if the Nifty moves 200 points after that, this gives us an idea about the performance of this strategy.




http://www.4shared.com/file/VUmNhbR5/NR7SetUp.html
 
#4
I am attaching a file showing OHLC data for Nifty spot

in the file the is a col. called range and in the last col. where ever there is a value that day NR7 is triggered.

So the trick is to assume that day we buy straddle/ strangle and the see if the Nifty moves 200 points after that, this gives us an idea about the performance of this strategy.


Hi,

Can you please be kind enough to re-uploade the Xcell file. The uploaded file shows the following error"
Sorry, the file link that you requested is not valid.
Reasons for this may include:

Invalid link
The file has been deleted because it was violating our Terms of user"

Read more at http://www.4shared.com/file/VUmNhbR5/NR7SetUp.html?cau2=0759nousr#wCq1Mf9GP856BH2D.99"

Regards....
 

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