Trades

Log from Friday to Thursday

May22 W1 P&L

May22-W1: One of the best weekly returns

Yes, I made it big this time. A weekly return of 4% is way above my expectations. The best part is that I did almost everything properly. I need such returns from time to time because no matter how good it gets, there will always be a few weeks who will take away a lot from me. Is 4% the best that this strategy can deliver? I don’t know. I have earlier seen weekly return above 6% also but unsure if I was doing it right back then.

More than 50% of the total return came from mean reversion trade which was deployed on Wednesday, and was held till Thursday. The surprise rate hike gave that wonderful opportunity. Luckily, my wife alerted me about it. I took the initial  trade but had to soon start averaging quickly. By the end of Wednesday, I was sitting on 22 lots. I was expecting to earn 50% of premium but Thursday open was a dream come true and I earned more than 90%.

The rest of the profits came through the standard strangle trading which I deploy. Most of them came on Wednesday via call options as the market was slipping in deep red. I did well to aggressively roll-in the strikes. I believed on my analysis. I now have started measuring price action which is helping in setting strategy on daily basis.

With such a return, I have reasons to believe that I am doing well. I must maintain the rhythm.

Net Profit (after deducting brokerage)Capital deployed (approx)Week’s ROITotal no. of weeks traded till todayAverage weekly  return till today
Rs. 61,938.65Rs. 1540927.704.02%42.12%

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.

Apr22-W4-PL

Apr22-W4: Some confident and some lucky trades bring good profits

Apr22-W4: Some confident and some lucky mean reversions bring good profits


The week again started with a very big gap down. It opened way below 17200 level where I was expecting it to find support. I did not have much confidence to be very aggressive on mean reversion. Therefore, I sold only a couple of 17000 PE options. I should have sold more.  

The rest of the week was quite standard except Thursday. The market kept going up relentlessly. I gave in to the temptation of mean reversion. I sold 17300 CE strike even though the charts were not that solid. I had to average continuously for management. Overall, the quantity became 1250.

I was not able to time the exit. I got greedy and kept waiting. It got a bit nervous actually but I got a lucky red spike and exited. It is another story though that I could have tripled my profits had I kept those options till expiry. But you never know, do you

Net Profit (after deducting brokerage)Capital deployed (approx)Week’s ROITotal no. of weeks traded till todayAverage weekly  return till today
Rs. 24,073.57Rs. 15,16,8541.58%31.41%

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.

Apr22-W2: Good restart to Wannabebull


So the 1st week of Wannabebull’s restart has been quite successful. The market did absolutely nothing during the 4 days of trading and yet, I made a lot of money. I am absolutely stunned by how that happened. I did make around couple of thousands by day trading mean reversals but even if I discount that, the return is higher than expected.

The key reason that I can think is the VIX crash on April 8th. This allowed me to book more than 3K of profit on day 1 itself, while taking new positions quickly. It would be interesting to see how I navigate the coming week as I have trapped myself by taking positions when VIX was at its lowest.  

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. 18,623.74Rs. 11,83,8951.57%125.16%1125.16%

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.

Jan21W4 ROI

Jan22-W4: Mean reversal trade gone well

With less than Rs. 5 lakhs as trading capital, I did not plan to trade this week. However, the first 15 minutes candle of January 24th tempted me to take a positional trade. I took strike of 16450 PE which was very very far OTM.

I did not expect that any management would be required but the market kept falling till 2 PM or so. During this time, I kept adding positions. I obviously ran out of money quickly despite taking hedges. I rolled in the strike and ran out of money again.

With Wednesday being a holiday, the options started deteriorating fast and I was able to close the position in profit. Almost same story unfolded on Thursday as the market opened very week. I took some mean reversion trades which paid well.

Overall, I felt uncomfortable with limited capital availability but this much capital should be good enough for any such opportunities in future also.

So I traversed through the following candles during the week:

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. 19,358.26Rs. 498349.543.88%625.5%3378.08%

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.

Jan21W3 ROI

Jan22-W3: Being not in the game helps

I needed money for some homely affairs. I had to close my positions by Tuesday and withdraw almost 50% of corpus. This meant that I was not in the game on Wednesday. Otherwise, I am not sure if I would have come out unscathed. I believe I played well till Tuesday. I also took some trades on Thursday which worked fine.

So I traversed through the following candles during the week:

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. 8,899.09Rs. 1177450.450.75%47.92%3273.48%

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.

Jan21-W2: Sensible trading and high VIX always helps

With market all set to go long, I had nothing but put options. As Thursday came near, I kept some call options as well which helped in giving good returns. These kinds of weeks make it feel good. Small money made safely is always better than making large money with a lot of risk.

So I traversed through the following candles during the week:

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.14,691.5Rs. 1162758.951.26%92.11%3174.74%

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.

Jan21W1 ROI

Jan21-W1: The means don’t justify ends

Overconfident of mean reversion tactics and filled with greed to recover ridiculous penalty due to SEBI’s shenanigans of last week, I entered the mean reversion trade early. I think it was Tuesday. The trade backfired and I was in deep red.

It was not like I was completely off the mark. On Wednesday morning, I did get a chance to exit almost at breakeven but emotions overcame reasoning. I did not book and watched the trade go back in deep red within rapid fire time.

I knew that the same strike of 17850 CE would not be able to recover by Thursday. I went in by another 50 points and shifted to 17800 CE. I prayed on Wednesday night and Thursday morning luckily opened with a gap down opening. Though the overall profit was good but witnessing a realized loss of Rs. 1.25 lakhs is simply unjustified.

In future, I should exit when breakeven and switch to safer strike until mean reversion target is met.

So I traversed through the following candles during the week:

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. 71,856.3Rs. 1090902.656.58%2658%3075.04%

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.

ROI

Dec21-W5: Retail traders are looted by regulator

In a week when everything went right and I earned well via a methodical system of trading, I had to shell out a hefty amount of ‘other charges’ These are charges collected by dear regulator SEBI for penalizing retail traders like me who do not maintain lakhs of margin. To add salt to injury, it is impossible to know breakdown of these charges, at least on the console of Zerodha.

Rs. 15,000 of profit in the week was knocked away by Rs. 10,000 of SEBI charges. I have no interest in knowing the breakdown anyway. I know the reason. This is my punishment for being over smart and keeping negative margin on Dec 17th. I thought that as long as I maintain positive margin by end of day, I am ok. However, our dear SEBI can randomly take snapshots 5 times a day and penalize if margin is negative.

Did I deserve to be penalized? Yes

Did I deserve a penalty of Rs. 10,000? Absolutely no

I say this because we Indians perhaps pay the largest taxes in the world for trading in a market where freak trades are becoming common and price determination is done by speculators sitting in Singapore. SEBI has no right to penalize me by this much amount if I committed this mistake for the first time, especially when it can change margin requirements 5 times a day as per its whims and fancies. Couldn’t I had been let go with a warning?

But as always, nobody will care. This piece of blog will just die, just like hopes of several Indian traders who wish for reduced taxes and penalties.

I guess once I become rich enough, I too will trade from Singapore.

So I traversed through the following candles during the week:

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. 5327.98Rs. 1085574.670.49%28.99%2952.62%

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.

Dec21W4 ROI

Dec21-W4: The fallacy of the plan got exposed

Monday was the day when all my loopholes of mean reversion strategy were exposed. The strategy which had been giving me windfall profits for past 13 weeks or so was almost showing me an unrealized loss of over Rs. 1,00,000. I need to write my experience clearly as it happened on Monday:

TimeWhat I didWhat I should have done
First 15 minutesI knew that Nifty was not oversold yet on shorter timeframe but I still went ahead and did averaging since my P&L of put positions was deep redI should have rolled in the call options without disturbing put options
Next 15 minutesI purchased hedge positions which were expensiveI should have exited calls and averaged puts
Until 1015 amI exited hedges to save losses on them but that made my margin go negativeI should have taken hedges with intent to avg a bit more and exit hedges immediately
Until 1145 amI rolled in put options until then went ITM while ensuring that new premium > current premiumI should have rolled in only once while ensuring new premium > current premium
Until 1245 amHopelessnessI should have repeated the cycle until contracts went ITM

The chink in armor of my mean reversion strategy is that hedges are simply useless if this strategy is being leveraged on any day before Wednesday (or maybe Tuesday, will need to check).

By God’s grace, market started reversing by 1 pm and I was able to hold my nerve until around 2 pm when I eventually exited my positions and ended the day at around Rs. 20,000 of realized loss. However, I was holding positions which if kept till expiry could have recovered the loss completely.

This was easier said than done though.  During subsequent days, the market’s ATR was big and it kept swinging here and there but mostly in positive direction. I had to wipe the slate clean multiple times, meaning that I wasn’t gaining much.

It was only on Thursday that I got a chance to do another mean reversion when I sold ITM contracts to the tilt while keeping hedges. While I did earn profit, I could have milked more by rolling out the strike with same number of positions. The idea simply didn’t strike me then. I now need to remember that Wednesday and Thursday are golden days of mean reversion, if done properly.

All above has led to awesome learning. I had been taking this strategy casually which I can’t afford to do so anymore.

So I traversed through the following candles during the week:

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. 6870.59Rs. 1058414.71%67.83%2756.21%

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.

Dec21W3 ROI

Dec21-W3: The pleasure of doing nothing at all


The whole week was quite normal though there was a bearish tone to it. I had to do a mean reversion once but other than that, the strikes took care on their own. Since I did not do anything unlike other weeks, there is nothing much to write about. This makes my blog so simple. Keeping it simple is the most beautiful thing in life  

So I traversed through the following candles during the week:

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. 10397.8Rs. 1058414.70.98%66.25%2756.13%

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.