Trades

Log from Friday to Thursday

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.

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.