Need help on Synthetic Straddle

Hi Traders,

This is my Synthetic Straddle for Aug08:

Bought 2 Lot Aug4400Nifty Put at 85 &
1 Lot Nifty Aug Future at 4442.
Now I know that
Upper Break even Point = 4612 (Nifty Aug Future) &
Lower Break Even Point = 4188 (Nifty Aug Future)

Now there are only 4 days remaining for this Synthetic Straddle to expire and I have reached no Break Even Point and I am in loss.

Please suggest any way of adjusting the Synthetic Straddle so that I can come out of the losing postion.

Thanks & Regards,

AJ

Sell 2 lots 4400 calls, it's free money from this position. If Nifty rises above 4400, sell 2 lots 4300 puts.

Straddle is strategy to play the momentum /breakout in the underlying stock/index.
The way it is played is to take direction neutral position before the breakout, and once breakout has taken place, then close the loosing leg and enjoy the ride on winning leg.

It is not lazy persons strategy who can't take call on the direction of the market but decides to buys and holds Straddle till expiry. In such case 1) he pays double the premium and 2) time decay is going to hurt twice.

In your case, there were only 4 days to expiry hence the position is hit by faster time decay (time decay is very high near expiry). In this case, best option is to book the loss and search for next trade. Maybe, explore the option of selling this straddle near the expiry and be on the winning side of this trade (caution - option selling is lot risky then what one can think of, so please understand the risk and manage them well before you decide to sell options)

Happy Trading