Day: August 28, 2021

counting money

Aug21-W3: When money is coming, stop counting it

Last Friday was a gap-down event. I remained glued to screen for the first 15-20 minutes. I booked profit on the call options.  I also sold additional put options with intent to make some intraday money. But the deadly ‘validation pending’ problem of Zerodha spoiled the entry and trade had to be closed at no profit – no loss. I then made content by selling OTM calls.

The gap-up opening on Monday made me think of aggressive roll-in of my puts. And I went a bit too aggressive. I ended up selling a strike which was not OTM enough. However, I kept holding the strike and eventually it became comfortable.

This led me to an important introspection. How much of an aggressive roll-in is aggressive enough. I cannot be subjective about it. I have now formed a rule that I will not roll-in more than the ‘adjusted ATR’ value of my indigenous model.

I am not sure if this new rule of mine makes sense in a trending market. In my last blog, I had written about the advantage of aggressive roll-in. Maybe I will know more once I trade such a market. I guess there is no way other than trial and error.

On Tuesday, my self-created alert system shouted ‘oh no’ on my call position. After taking that mega loss during first week of August, I built some checks in my indigenous system. The ‘oh no’ alert indicates that trade might go wrong.

However, my call position was still green and still contained a lot of premium. I got greedy and chose to ignore the warning. It turned out to be a bad bet and I had to book loss later. The good takeaway is that I hit the stop loss button. This is a good sign. I hope I can fix my weakness of not booking losses.

For the time being, I should stop looking at premium i.e. I should absolutely stop counting how much would I make if I hold this option to expiry. I remember doing so a lot of times earlier also. This just makes mind go wrong. Perhaps I should take positions blindfolded.  


Aug21-W4: Nifty Option Trades beat target CAGR

I have clocked my second maximum ROI this week. The highest annualized ROI was 80.68% in the first week of July series. Successes like these are important when the going is good. Selling options is risky and losses are unavoidable. So, maximizing the gains when they come helps in averaging the inevitable red numbers. Nonetheless, it is very important for me to do this analysis only on weekend and not during the week. I could have earned more if I had adhered to this principle.

So I sold OTM strangles from Aug 13 to Aug 18 whose daily candles were like this:

Here are the results:

Net Profit (after deducting brokerage)Capital deployed (approx)Week’s ROIAnnualized ROI for this weekTotal no. of weeks traded till todayAnnualized  return till today
Rs. 5,344.17Rs. 7,11,3840.751%47.58%1115.24%

The following is breakdown of week’s positions:

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.