Where a call option and a put option are sold at the same strike price.
Traders often overlook the SHORT STRADDLE due to its simplicity.
It remains the TOP strategy to make money when the market is not trending.
Here's how you can make money using only the short straddle
in various market conditions
⬇️ A comprehensive thread🧵
Where a call option and a put option are sold at the same strike price.
Max risk = Unlimited
(using SLs would be wise)
Upper breakeven = Strike price + Total Premium received
Lower breakeven = Strike price - Total Premium received
Long-term short straddles usually require fewer adjustments since the range is wide.
You will have to define your criteria based on your risk appetite and the gap between the breakevens.
Ex:- gap between the breakevens is 360 points, so I would prefer making adjustments on every 50-point move.
Suppose the straddle is initially made at 18700 strike price, then,
NIFTY moves up to 18794 ( 94 points from our strike price/ max profit point )
The trader can now create a new straddle at 19000 strike price.
Which provides a larger range
Initial strike price ± 2*(Movement)
In the given example,
NIFTY has shifted to 18499 from our strike price of 18600 (101 points)
The trader can sell a call option for wider range
If the underlying moves drastically in any direction,
The trader can book his profit/loss in the straddle and initiate a new one after the market is relatively calm
NIFTY has moved up by 86 points
We can keep the square off the short call option(at a loss)
and we can
1) Put an SL on the put leg (this would make it a directional trade)
or
2) We can sell a 18850 CE to create a strangle
In the below example,
NIFTY has moved 92 points from our strike price
We can buy 18850 CE to reduce the risk on the upper side.
• For profit booking, trailing stop loss is suggested so that maximum points can be extracted from the straddle
• If one has lost over 2% of his/her total capital, he/she should probably terminate the strategy and book the loss.
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Traders often overlook the SHORT STRADDLE due to its simplicity.
— Mohit Sharma (@mohitsharmadl) December 9, 2022
It remains the TOP strategy to make money when the market is not trending.
Here's how you can make money using only the short straddle
in various market conditions
\u2b07\ufe0f A comprehensive thread\U0001f9f5 pic.twitter.com/inHebjXzZA
More from Trading
12 TRADING SETUPS used by professional traders:🧵
Collaborated with @niki_poojary
Here's what you'll learn in this thread:
1. Capture Overnight Theta Decay
2. Trading Opening Range Breakouts
3. Reversal Trading Setups
4. Selling strangles and straddles in Bank Nifty
6. NR4 + IB
7. NR 21-Vwap Strategy
Let's dive in ↓
1/ STBT option Selling (Positional Setup):
The setup uses price action to sell options for overnight theta decay.
Check Bank Nifty at 3:15 everyday.
Sell directional credit spreads with capped
@jigspatel1988 2/ Selling Strangles in Bank Nifty based on Open Interest Data
Don't trade till 9:45 Am.
Identify the highest OI on puts and calls.
Check combined premium and put a stop on individual
@jigspatel1988 3/ Open Drive (Intraday)
This is an opening range breakout setup with a few conditions.
To be used when the market opens above yesterday's day high
or Below yesterday's day's
Collaborated with @niki_poojary
Here's what you'll learn in this thread:
1. Capture Overnight Theta Decay
2. Trading Opening Range Breakouts
3. Reversal Trading Setups
4. Selling strangles and straddles in Bank Nifty
6. NR4 + IB
7. NR 21-Vwap Strategy
Let's dive in ↓
1/ STBT option Selling (Positional Setup):
The setup uses price action to sell options for overnight theta decay.
Check Bank Nifty at 3:15 everyday.
Sell directional credit spreads with capped
A thread about STBT options selling,
— Jig's Patel (@jigspatel1988) July 17, 2021
The purpose is simple to capture overnight theta decay,
Generally, ppl sell ATM straddle with hedge or sell naked options,
But I am using Today\u2019s price action for selling options in STBT,
(1/n)
@jigspatel1988 2/ Selling Strangles in Bank Nifty based on Open Interest Data
Don't trade till 9:45 Am.
Identify the highest OI on puts and calls.
Check combined premium and put a stop on individual
Thread on
— Jig's Patel (@jigspatel1988) July 4, 2021
"Intraday Banknifty Strangle based on OI data"
(System already shared, today just share few examples)
(1/n)
@jigspatel1988 3/ Open Drive (Intraday)
This is an opening range breakout setup with a few conditions.
To be used when the market opens above yesterday's day high
or Below yesterday's day's
#OpenDrive#intradaySetup
— Pathik (@Pathik_Trader) April 16, 2019
Sharing one high probability trending setup for intraday.
Few conditions needs to be met
1. Opening should be above/below previous day high/low for buy/sell setup.
2. Open=low (for buy)
Open=high (for sell)
(1/n)
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In the spring and summer of 2016, as reported by the Times, activity we traced to GRU was reported to the FBI. This was the standard model of interaction companies used for nation-state attacks against likely US targeted.
In the Spring of 2017, after a deep dive into the Fake News phenomena, the security team wanted to publish an update that covered what we had learned. At this point, we didn’t have any advertising content or the big IRA cluster, but we did know about the GRU model.
This report when through dozens of edits as different equities were represented. I did not have any meetings with Sheryl on the paper, but I can’t speak to whether she was in the loop with my higher-ups.
In the end, the difficult question of attribution was settled by us pointing to the DNI report instead of saying Russia or GRU directly. In my pre-briefs with members of Congress, I made it clear that we believed this action was GRU.
The story doesn\u2019t say you were told not to... it says you did so without approval and they tried to obfuscate what you found. Is that true?
— Sarah Frier (@sarahfrier) November 15, 2018
In the spring and summer of 2016, as reported by the Times, activity we traced to GRU was reported to the FBI. This was the standard model of interaction companies used for nation-state attacks against likely US targeted.
In the Spring of 2017, after a deep dive into the Fake News phenomena, the security team wanted to publish an update that covered what we had learned. At this point, we didn’t have any advertising content or the big IRA cluster, but we did know about the GRU model.
This report when through dozens of edits as different equities were represented. I did not have any meetings with Sheryl on the paper, but I can’t speak to whether she was in the loop with my higher-ups.
In the end, the difficult question of attribution was settled by us pointing to the DNI report instead of saying Russia or GRU directly. In my pre-briefs with members of Congress, I made it clear that we believed this action was GRU.
