Day: September 4, 2021

counting money

Sep21-W1: When money is going away, stop counting it

I was very skeptical last weekend while writing this blog. I was carrying OTM positions but they did not have much premium in them. The charts too were showing that volatility was compressed by a lot. I convinced myself that the positions that I have are quite far. I now have tight SL rules and I will take the loss if it comes.

On Monday morning, I told my wife that an impulse candle is coming on perhaps a 75 minute timeframe. She checked with me what I was exactly trying to say? I said that there may not be a zig zag movement. It will be a unidirectional linear blast. My wife said that if that is indeed the case, it is going to be a bull trend.

So it is not that the last week’s massive move was a surprise to me. I took the SL on Monday itself, and felt good that I am now acknowledging and taking SLs. But it was the next thought which ruined it all. The thought was to recover the loss of Rs. 3150.

So, I sold call options just 100 points away from the strike on which I had booked loss. If all went well, I would have recovered loss completely while gaining whatever I was making from put options. But on Tuesday, my SL was hit on this new strike as well.

My mind, body and soul were not willing to take 2 SLs in the same week. I believed in the power of theta and decided to let it go. And Nifty literally let itself go. There was no stopping it. The relentless and merciless trend made positions go in deep red.

On Wednesday afternoon, I booked loss on 17150 CE and moved to 17200 CE since it seemed like a safe strike. I kept fluctuating between these 2 strikes on Wednesday and Thursday. By Thursday EOD, I decided to roll-over 17200 CE and await mean reversion.

Much of the reason for taking this decision was that this is what I did after loss during first week of August also. I recovered about 50% of loss during second week due to rollover. Stupid memories. The market does not work this way.

I have now left myself at the mercy of Nifty. The charts do not look promising. I may have to rollover 1 more week. Despite knowing it all, I have let myself enter this ridiculous situation. This is bad trading, but I now know I am more ready to face such trend in future. Just need to somehow mitigate this ongoing loss.    

Sep21W1 money heist

Sep21-W1: Nifty Option Trades mismanaged to cause loss

If I stay with you, if I’m choosing wrong

I don’t care at all

If I’m losing now, but I’m winning late

That’s all I want

I don’t care at all

I am lost

I don’t care at all

Lost my time, my life is going on

It is not like I did not take stop loss. I took it on 17050 CE but immediately sold 17150 CE. Why? Because I wanted to recover the money heist done by Nifty. P&L was situation was not that bad till Wednesday as I did some smart plays between 17150 and 17200 CE. But by Thursday noon, I decided to retain 17200 CE till 1530 and rollover in case of loss. And well, the rest is history. This trend is not my friend.

So I sold OTM strangles from Aug 27 to Sep 2 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. -11,051Rs. 7,16,384-1.54%-55.43%126.01%

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.