Trades

Log from Friday to Thursday

ROI Nifty

Dec21-W2: Swinging with the swings

Nothing much spectacular about the week even though the results are cool. I rate an annualized ROI for week above 52% as a very awesome week. Anything above 35% is good anyway. Therefore, I must understand how this happened. I think it was due to high VIX. Even though I incurred loss on 17500 CE call option and had to manage it similar to how I handled situation last week, overall profit for the week turned out to be good. I need to make the most of all these high VIX days. I don’t think I would get such good returns when VIX is low.

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. 11809.08Rs. 1046605.611.13%79.22%2655.63%

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.

Dec21-W1

Dec21-W1: I got lucky & somehow was saved from a huge loss

In last week’s blog which referred to trades taken 2 weeks back, I wrote “shouldn’t I take such chances for the inevitable losses when they come?”

I traded in such a way past week that I brought the inevitable to myself. Luckily, the market went up and the rest of days were the usual.

The highlight of week of trade on 16500PE where I tried it all but couldn’t save it from booking it at a lot of nearly Rs. 50,000. I did not follow rules of mean reversion trading and started selling early. The principles of averaging too were not applied properly. I basically did all the classic mistakes which I used to make before starting wannabebull. Old habits just simply don’t die, do they?

Coupled with feelings of optimism, courage and perhaps some intellect, I sold ATM and ITM options on a couple of occasions. I sold ITM options on November 29 which gave immediate results. After breaking even overall (or that’s what I thought at that time), I closed that ITM trade even though my target was away on higher timeframe. The adrenaline rush was too much to handle. Wannabebull is not supposed to be about all that. And thus, I closed it all.

The rest of week was the usual. Due to high VIX, profits remained above average.

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. 23947.61Rs. 10226582.34%233.22%2554.45%

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.

Nov21-W4: I shorted puts as the market fell, to make good money

Nifty began with a bang on Monday and kept falling most of the day. As I have been making good money via mean reversion style, I decided to go for it and shorted 16900 PE. To my surprise, the market went red on Tuesday morning. I followed instincts and went for all-in.

Did I have a solid plan? No

Is this how I want to trade in future? I shouldn’t but then shouldn’t I take such chances for the inevitable losses when they come?

Luckily, the market went up and the rest of days were the usual.

So I traversed through the following candles:

Here are the results (adjusting capital deployed to what is being shown in Zerodha but I am finally trading with more than 10 lakhs J )

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. 16649.82Rs. 1001008.181.67%135.8%2447.94%

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.

Nov21-W3: The unnecessary ‘other charges’ add to cost

I was deploying the usual trading strategy, and therefore, I had to take the hit. There are times when the usual doesn’t work. This was one of the weeks. Though Nifty was in downtrend, nothing is ever linear in stock market (except the crash of March 2020). I got fooled by the turn again and had to take hit on Monday. I tried to minimize damage by deploying mean reversion style as market was going up, but I was travelling and was not able to micromanage. So I ended up with a loss of around Rs. 2100.

The bigger loss though is attributed to Zerodha / NSE / SEBI or whoever is accountable for creating and playing with margin requirements. I know that margin requirement changes through the day depending on volatility. However, I believe it is completely unfair to change margin requirements after 1530 hours. How am I supposed to adjust positions to meet margin after close of trading hours? It is a loot and it seems no one wants to do anything about it.

So I was navigating through the following trades…

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. 7977.87Rs. 9777820.81%52.59%2344.82%

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.

Nov21-W2: The usual

I deployed my usual sell strangle strategy and the positions kept giving expected profits through the week.

I was trading through following 4 candles

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. 7977.87Rs. 9777820.81%52.59%2244.82%

The following is breakdown of week’s positions

Usual trading continued during the week as I followed the laws of my excel based strike calculators and results were cool.

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.

Nov21 W1 Performance

Nov21-W1: Made good money by doing intra-day mean reversion trading

The week began with a bang. Nifty went low, really low. With the level hovering around 17,600, I shorted some 17500 PE options. I kept adding some more options as Nifty kept going lower. Eventually, Nifty started turning around and I exited 50% positions at a good profile. But even when Nifty continued to go up, I noticed that option LTP started rising instead of falling. I closed remaining positions after sometime.

That is the thing with options. Their pricing has a lot to do with volatility and market price. It is almost like they have their own world which does have good correlation with spot but spot cannot be referenced for quick trading decisions. The rest of the week was the usual, similar to last week, and overall profit was quite good this week.

So I was trading these candles:

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. 16730.78Rs. 916051.31.82%156.3%2144.34%

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.

oct21-w4 result

Oct21-W4: Got fooled by the fake-out

I deployed my usual sell strangle strategy and the positions kept giving expected profits through the week. The only exception was Oct 26, led by the reversal initiation on Oct 25, which caused problem in my call options. I decided to book loss for staying on the safe side but the market then continued with the downtrend.  I guess the middle of A-B-C pattern is tough to navigate. I am not too disappointed with the loss booking. Most of the profit came due to high VIX.

These are the candles of 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. 12922.69Rs. 903128.611.43%109.34%2039.18%

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.

return

Oct21-W3: I think I thought I saw me make lotta money

I went for the kill with my super-risky mean reversion style of trading. In this style, I try to catch the top i.e. I don’t even wait for a signal candle. Catching the top is impossible. I then start averaging by using a mathematical formula based on ATR. The formula also helps in computing the position size to perform averaging. I think I am slowly getting good at it.

All this is not possible by shorting naked options. My strike of choice was 18600 CE, and my choice of hedge was 19100 CE. As market tended to go up, I once tried to use Zerodha’s basket order to place trade but accidently placed order of buying 18600 CE. I instantly fixed the mess and tried to place a basket order again. The order failed again as Zerodha places limit orders and not market orders. The trades simply did not get executed. Feedback to Zerodha: Please allow market orders as part of basket order.

The above fiasco happened on Monday. Now, I forgot that Zerodha follows a FIFO method when it comes to calculation of average LTP. I got fooled on Tuesday with the average LTP and notional P&L. When the market dropped, I saw that I was making more than Rs. 20,000 but in reality I had made only around Rs. 8000 since I had actually booked loss on Monday while trying to adjust positions.

It is not like I would have traded otherwise. I needed to exit on Tuesday as my target was hit but I was quite happy until I checked my P&L report today. I had to check the log twice to understand how my profit of 20,000 got reduced to 8,000. I am not sure if other traders often fall for this misunderstanding also. Irrespective of this accounting misunderstanding, I believe I should have made more money anyway during this mean reversion trade. I was facing margin problem due to far OTM hedge. Next time, my hedge won’t be that far.

So I was trading between these candles:

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. 14615.95Rs. 888512.661.65%133.6%1935.45%

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.

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:

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.

returns

Oct21-W1: Profits just happened by themselves

There is a way of managing strangles. The method requires selling call or put option at a premium which matches the opposite side. Man, I can’t explain this in simple words. Let me do that in detail in the blog section. However, I allowed trades to play out on their own while keeping a mental note to take the stop loss.

Basically, I was never in charge of the way candles were getting formed. I found market to be literally all over the place this week. But the edge in option selling is theta decay which helped in making good money.

I was trading last week in between these vertical lines

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. 12346.95Rs. 8474491.45%112.16%1730.83%

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.