Trades

Log from Friday to Thursday

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.

returns

Sep21-W5: I could have made more profits

Upon the open of 24 September, I sold a couple of near the money call options. My degree of confidence on mean reversion was high on daily timeframe but that is a bit of a higher timeframe for my kind of trades. I rely a lot on intra-day timeframes which were giving me mixed signals. I had put exit orders on both call options which eventually got executed leading to good profits.

History repeated itself on 27 September and it was again an opportune moment to send near the money call options. In fact, I should have taken higher number of lots. However, I had some office work and I knew I would not be able to actively track. By the time I started paying attention, market had already begun reversing and I had lost the edge. So I had to stick with OTM options.

Had I paid attention, I could have gained a lot more. Anyhow, my overall CAGR has hit an important milestone of 25%. I hope I am able to maintain it.

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. 14451.92Rs. 7,82,9981.84%158.84%1625.1%

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.

reversion result

Sep21-W4: Nifty mean reversion trades give me highest ROI till date

My memory is not serving me correctly as to when I started building up short positions for mean reversion. I should start using tag feature of Zerodha for effective tracking. The strike was 17700 CE which was sold upon every 50 points rise of Nifty since September 16 for sure, if not September 15. I bought hedges with objective to squeeze more margin.

On September 17, the price of option had breached 100. I then started selling more lots on rise of every 10 points of option price. I hit the tilt and did not have funds to sell more even though Nifty continued to rise. The unrealized loss was over Rs. 50,000. I moved away from the screen. I think I came back to screen by 1130 AM and things started moving in favor. I exited half quantity by noon when LTP was 80ish. The remaining quantity was exited sometime later.

The rest of the week was not easy to trade. September 20 and 21 had long wicks leading to high VIX. Somehow, the trades just worked out. I wonder how much of this entire week was my skill and how much was luck.

So I took positions in a week whose 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. 24703.95Rs. 7,58,2933.25%429.66%1518.73

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.

Sep21W3 spread ROI

Sep21-W2: Nifty Option Spread Trades Give Same ROI

I was carrying a strangle from last week. I began converting it into an iron condor on Zerodha as per the new hope I had in mind. I had used margin calculator to estimate the number of hedges I am allowed to buy. However, the reality was much different and I had a hard time managing positions. For some reason, Zerodha factors hedges on both sides. Checkout this tweet for details:

Contrary to my perception, iron condor did not give higher ROI than strangle even though the number of lots were more. I think this is because the number of lots was not more enough. This needs to be experimented further. Also, I found that margin calculators vary from broker to broker. I wonder if there is a standard calculator from SEBI. It is really challenging to trade effectively without knowing margin requirement for positions.

So I sold OTM options from Sep 13 to Sep 16 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. 3,941.08Rs. 7,54,3520.52%31.12%145.6

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.

loss

Sep21-W2: Nifty Option Trades could not recover last week loss

This trend is not my friend. As I was carrying ITM positions, Friday’s gains made my P&L go redder. The problem continued on Monday and I started to panic. My unrealized P&L was crossing Rs. 30,000. Forget last week’s loss, I just wanted to breakeven on this unrealized loss now. On Tuesday, I was only at hairline difference of that breakeven moment when the market reversed and again went back to high. At that point, I gave up and booked loss of around Rs. 35,000. I checked charts and figured reversion is not done yet. I sold some ITM call spreads and recovered whatever I could. Damage to P&L continues.

So I sold OTM strangles and call spreads from Sep 3 to Sep 9 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. -3,023.65Rs. 7,55,676-0.4%-18.82%133.64

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.

Sep21W1 money heist

Sep21-W1: Nifty Option Trades mismanaged to cause loss

If I stay with you, if I’m choosing wrong

I don’t care at all

If I’m losing now, but I’m winning late

That’s all I want

I don’t care at all

I am lost

I don’t care at all

Lost my time, my life is going on


It is not like I did not take stop loss. I took it on 17050 CE but immediately sold 17150 CE. Why? Because I wanted to recover the money heist done by Nifty. P&L was situation was not that bad till Wednesday as I did some smart plays between 17150 and 17200 CE. But by Thursday noon, I decided to retain 17200 CE till 1530 and rollover in case of loss. And well, the rest is history. This trend is not my friend.

So I sold OTM strangles from Aug 27 to Sep 2 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. -11,051Rs. 7,16,384-1.54%-55.43%126.01%

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

Aug21-W4: Nifty Option Trades beat target CAGR

I have clocked my second maximum ROI this week. The highest annualized ROI was 80.68% in the first week of July series. Successes like these are important when the going is good. Selling options is risky and losses are unavoidable. So, maximizing the gains when they come helps in averaging the inevitable red numbers. Nonetheless, it is very important for me to do this analysis only on weekend and not during the week. I could have earned more if I had adhered to this principle.

So I sold OTM strangles from Aug 13 to Aug 18 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. 5,344.17Rs. 7,11,3840.751%47.58%1115.24%

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

Aug21-W3: Nifty Option Trades beat target CAGR

In last week’s log, I forgot to mention that I had infused further capital of Rs. 22,000 in this account. With that, the assets under management is now above Rs. 7,00,000. I do often think about taking loan to put more capital. Or maybe someone can invest in this account and I share profit. Or maybe I deploy the same trades in someone else account and share profits. I might pursue any of these 3 scenarios soon. But the catch is that I should be steady and consistent. This week was one of them.

So I sold OTM strangles from Aug 13 to Aug 18 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. 4,809.09Rs. 7,06,5740.681%42.29%1012.27%

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.