Day: October 16, 2021

desert, drought, dehydrated

Oct21-W2: Low volatility week doesn’t make much money

I was pretty much clueless about how Nifty was going to behave during the week. The macro trend is obviously bullish but momentum indicators on daily timeframe have been a bit weak lately. The exact in the middle position with respect to a parallel channel added to the confusion.

This is the easiest setup to create option selling positions. Just sell on both sides with a hope that everything will consolidate. In case price starts breaking out in 1 direction, reduce risk accordingly while adding to the other side.

I did all of the above but I was barely able to money. I hardly closed any positions on Friday and Monday. Whenever I did, the next strike of choice did not come at a valuation which would make money. However, I contended with what came to me. I did not move strikes closer to money.

Eventually, the ROI is above 15% but hey, my true interest is in getting return more than 30% on weekly basis. I guess I can’t have that on all weeks especially when VIX is trending down. I need to calm down and stay happy with what I get, especially when I had disastrous results during first 13 weeks.

I should start looking at banknifty for mean reversion trading setups if I need to quench my greed. Maybe not until week # 26, I suppose. It is not because I would not be able to manage both Nifty and Banknifty but mainly because I still lack enough funds to properly perform mean reversion trading. I have to fund my account a bit more.

oct21 w2 return

Oct21-W2: Did everything right but could not make enough money

Option valuation is crazy stuff. My wife keeps crying out loud daily as to why options were not behaving the way they were supposed to. I am joining her chorus as I think I should have earned more this week. Nifty was all green and I was on the right side as I was all short on puts. I even exited my call position when I found that Nifty was going to blast up. Should I blame the VIX? Maybe yes. Maybe unidirectional weeks don’t end up bringing enough money for option sellers.

Should I have been more aggressive with my put strikes? But then staying OTM is the name of the game. Whatever.

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. 3716.14Rs. 884796.520.42%24.35%1830.37%

The following is breakdown of week’s positions:

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