Trades

Log from Friday to Thursday

nifty index 50 trades

Aug21-W1: Nifty Index 50 Option Trades Destroy it All

I infused Rs. 50,000 from my salary in Nifty Index 50 trades and lost the same amount. It is not only an irony but also a tragedy, a dream crusher and a sad hardcore truth about trading. This was bound to happen. I had been observing the drawdowns for past 2 weeks. Though I wrote extensively about how to prevent losses from getting bigger, they just remained words. The damage to P&L will take a long time to recover. Hopefully, self-confidence will recover sooner.   

So I sold OTM strangles from Jul 30 to Aug 5 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. -46,455.13Rs. 7,04,099-6.59%-97.13%8-16.05%

I did recover approx Rs. 24,000 on Friday as I rolled over the trade. However, I no longer have plans to recover the remaining.

The following is breakdown of week’s positions:

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

nifty index 50 trades

Jul21-W5: Nifty Index 50 Option Trades Beat Target CAGR

July 28, 2021 will be remembered as quite a day in history of Nifty Index 50.  The market dropped as if there is no support but there always is. I had written about the support value in my last post and luckily, the market respected it. Even though I could have used that day to make or lose a lot of money, I was occupied with a job interview and could not micro-manage trades.

The P&L screenshot below lies yet again. I witnessed an unrealized loss of more than Rs. 10000 or about 1.55% of deployed capital. This now is my new personal record and I am obviously not proud of it. I really need to think about how to avoid such events.

But there’s another problem called effective utilization of capital. One reason for the ROI remaining in low 30% range is that more than Rs. 50,000 simply remains idle. This happens for at least 3 trading days per week. But that is something which I cannot control.

So I sold OTM strangles from Jul 16 to Jul 22 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 todayAverage CAGR till today
Rs. 3391Rs. 6,50,7080.521%31.03%741.83%

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.

nifty index 50 trades

Jul21-W4: Nifty Index 50 Option Trades Beat Target CAGR

Nifty index 50 could not keep calm last week as it dropped all the way till 15600. Even though I was expecting this to happen, my strike selection was not good. I should not take unexpected July 19 gap-down as an excuse especially when I had been anticipating such drama in my blog posts earlier. I should have adjusted strikes on Monday.

The P&L screenshot below does not tell the story. I was witnessing an unrealized loss of more than Rs. 4000 or about 0.65% of deployed capital. I have made a note of it. When I reach week 13, I shall be updating P&L numbers on homepage and this drawdown will also be posted there. Hopefully, this shall be the max drawdown.

So I sold OTM strangles from Jul 16 to Jul 22 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 todayAverage CAGR till today
Rs. 4,048.75Rs. 6,47,1500.549%32.98%643.63%

Where annualized ROI for week = ((1+week’s return in decimal)^52)-1)*100

The following is breakdown of week’s positions

nifty index 50 trades

Jul21-W3: Nifty Index 50 Option Trades Beat Target CAGR

Based on my previous analysis, I was expecting a drop till green trendline but had no clue what would happen afterward. Though I expected Nifty Index 50 to break green trendline and move to green rectangle, it kept moving up silently. I traded strangles conservatively but maybe I could have been a bit more aggressive. I also traded an intraday sell put opportunity on July 10 but again, my strike selection could have been nearer to money.

So I sold OTM strangles from Jul 9 to Jul 15 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 todayAverage CAGR till today
Rs. 3,953.65Rs. 6,43,1970.615%37.53%545.76%

Where annualized ROI for week = ((1+week’s return in decimal)^52)-1)*100

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.

Jul21-W2: Nifty Index 50 Option Trades beat target CAGR

On Jul 1st, I had sold nifty index 50 strikes which were so out of the money that they became indifferent to anything happening to Nifty. I was not able to book any profit before Monday. Even on Monday, I was scared due to low VIX and again ended up taking very far OTM positions. When I checked P&L on Wednesday, it was showing a profit of only Rs. 1100 or something. Thinking that no-risk-no-gain is the name of the game, I took really really stupid positions, especially 15650 PE. Though I ended in green, this is definitely not how I should trade.

So I sold OTM strangles from Jul 2 to Jul 8 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 todayAverage CAGR till today
Rs. 3,830.73Rs. 6,39,3660.599%36.43%447.82%

Where annualized ROI for week = ((1+week’s return in decimal)^52)-1)*100

The following is breakdown of week’s positions

Jul21-W1: Nifty index 50 trades beat target CAGR

On Jun 23rd, I sold nifty index 50 strikes expiring on July 1st which meant that time to expiry was more than a week. Higher the time to expiry, higher the premium. But it was not the time that made me take positions in advance. The reason was volatility. If you will see intra-day Bollinger bands on Jun 23rd, they were quite stretched out.

So I sold OTM strangle from Jun 23 to Jul 1 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 todayAverage CAGR till today
Rs. 7,232.3Rs. 6,32,1341.144%80.68%351.61%

Where annualized ROI for week = ((1+week’s return in decimal)^52)-1)*100

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.

Jun21-W4: Beats target CAGR

The last and only time I sold OTM strangle positions on Nifty was in 2nd week of April.  I then found myself caught in Covid assistance to family and then household and then office chores. It is not that I did not take any trades during that time. I took really stupid trades and lost a lot of money. Trading must be done with a free mind. 

Anyways, based on my view for Jun21-W4, I sold OTM strangle from Jun 18 to Jun 24 whose daily candles were like this:

Here are the results:

Net Profit (after deducting brokerage)Capital deployed (approx)Week’s ROIAnnualized ROI
Rs. 3,437Rs. 5,81,0000.591%35.9%
where annual return = ((1+week’s return in decimal)^52-1)*100

The following is breakdown of trades:

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.

Apr21-W2: Beats estimates

As I review, I am now realizing that the market made a doji candle on the weekly timeframe. And all these days, I was wondering why there is so much volatility in the market. As the saying goes, don’t miss forest for the trees.

So the below are the 4 candles during which I took trades, with each day being completely contrary to what I was anticipating (more details here)

Anyhow, here are the results:

Net Profit (after deducting brokerage)Capital deployedWeek’s ROIAnnualized ROI
Rs. 4,000Rs. 6,40,0000.625%38.26%
Where annualized return = ((1+week’s return in decimal)^52)-1)*100

In honesty, the key reason for achieving higher return was sheer luck. Though I was expecting consolidation during the week, but the way it happened was baffling to me. My daily basis analysis backfired (more details here) and I had no choice but to sell options on both sides. Basically, theta decay saved the week. But then, that’s what the strategy is all about, isn’t it?

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