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.
Where I share live trading and market-related updates, you can join my FREE TELEGRAM CHANNEL by clicking on the link below. 👇
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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
Many of you have seen the famous Westrum Organizational Typology model, so prominently featured in State of DevOps Research, Accelerate, DevOps Handbook, etc.
This model was created Dr. Ron Westrum, a widely-cited sociologist who studied the impact of culture on safety
Thanks to Dr. @nicolefv, I was able to interview him for an upcoming episode of the Idealcast! 🤯
It was a very heady experience, and while preparing to interview him, I was startled to discover how much work he's done in healthcare, aviation, spaceflight, but also innovation.
I've read 4+ of his papers, so I thought I was familiar with his work. (Here's one paper: https://t.co/7X00O67VgS)
I was startled to learn he has also studied in depth what enables innovation. He wrote a wonderful book "Sidewinder: Creative Missile Development at China Lake"
Dr. Westrum writes about China Lake Research Labs: "its design and structure had one purpose: to foster technical creativity. It did; China Lake operated far outside the normal envelope... Sidewinder & others were "impossible" accomplishments,
I love this book because it describes traits of organizations that routinely create and maintain greatness: US space program (Mercury, Gemini, Apollo), US Naval Reactors, Toyota, Team of Teams, Tesla, the tech giants (Amazon, Google, Netflix, Google)
This model was created Dr. Ron Westrum, a widely-cited sociologist who studied the impact of culture on safety
Thanks to Dr. @nicolefv, I was able to interview him for an upcoming episode of the Idealcast! 🤯
It was a very heady experience, and while preparing to interview him, I was startled to discover how much work he's done in healthcare, aviation, spaceflight, but also innovation.
I've read 4+ of his papers, so I thought I was familiar with his work. (Here's one paper: https://t.co/7X00O67VgS)
I was startled to learn he has also studied in depth what enables innovation. He wrote a wonderful book "Sidewinder: Creative Missile Development at China Lake"
Dr. Westrum writes about China Lake Research Labs: "its design and structure had one purpose: to foster technical creativity. It did; China Lake operated far outside the normal envelope... Sidewinder & others were "impossible" accomplishments,
I love this book because it describes traits of organizations that routinely create and maintain greatness: US space program (Mercury, Gemini, Apollo), US Naval Reactors, Toyota, Team of Teams, Tesla, the tech giants (Amazon, Google, Netflix, Google)
A 🧵on the basics of block and bulk deals.
Block and bulk deals are large purchases of stocks by investment banks, mutual funds, hedge funds, pension funds, FIIs, and promoters. Tracking block and bulk deals can help give you a sense of what these large players are thinking.
A single transaction where shares more than Rs 10 crores or the number of shares traded are more than 5 lakh is considered a block deal.
Block deals are carried out in separate trading windows. This trading window operates in two shifts of 15 minutes each:
Morning trading window from 8:45 AM to 9:00 AM.
Afternoon trading window from 2:05 PM to 2:20 PM
Block deals happen in different windows to reduce volatility and sudden price movements. Given that they are traded in a separate window, they do not show up on the volume charts.
Brokers facilitating the transaction are required to inform the exchange. You can track bulk and block deals on NSE & BSE:
https://t.co/pwTyzWTnUL
https://t.co/g9BbHiEag3
Block and bulk deals are large purchases of stocks by investment banks, mutual funds, hedge funds, pension funds, FIIs, and promoters. Tracking block and bulk deals can help give you a sense of what these large players are thinking.
A single transaction where shares more than Rs 10 crores or the number of shares traded are more than 5 lakh is considered a block deal.
Block deals are carried out in separate trading windows. This trading window operates in two shifts of 15 minutes each:
Morning trading window from 8:45 AM to 9:00 AM.
Afternoon trading window from 2:05 PM to 2:20 PM
Block deals happen in different windows to reduce volatility and sudden price movements. Given that they are traded in a separate window, they do not show up on the volume charts.
Brokers facilitating the transaction are required to inform the exchange. You can track bulk and block deals on NSE & BSE:
https://t.co/pwTyzWTnUL
https://t.co/g9BbHiEag3
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THREAD: 12 Things Everyone Should Know About IQ
1. IQ is one of the most heritable psychological traits – that is, individual differences in IQ are strongly associated with individual differences in genes (at least in fairly typical modern environments). https://t.co/3XxzW9bxLE
2. The heritability of IQ *increases* from childhood to adulthood. Meanwhile, the effect of the shared environment largely fades away. In other words, when it comes to IQ, nature becomes more important as we get older, nurture less. https://t.co/UqtS1lpw3n
3. IQ scores have been increasing for the last century or so, a phenomenon known as the Flynn effect. https://t.co/sCZvCst3hw (N ≈ 4 million)
(Note that the Flynn effect shows that IQ isn't 100% genetic; it doesn't show that it's 100% environmental.)
4. IQ predicts many important real world outcomes.
For example, though far from perfect, IQ is the single-best predictor of job performance we have – much better than Emotional Intelligence, the Big Five, Grit, etc. https://t.co/rKUgKDAAVx https://t.co/DWbVI8QSU3
5. Higher IQ is associated with a lower risk of death from most causes, including cardiovascular disease, respiratory disease, most forms of cancer, homicide, suicide, and accident. https://t.co/PJjGNyeQRA (N = 728,160)
1. IQ is one of the most heritable psychological traits – that is, individual differences in IQ are strongly associated with individual differences in genes (at least in fairly typical modern environments). https://t.co/3XxzW9bxLE
2. The heritability of IQ *increases* from childhood to adulthood. Meanwhile, the effect of the shared environment largely fades away. In other words, when it comes to IQ, nature becomes more important as we get older, nurture less. https://t.co/UqtS1lpw3n
3. IQ scores have been increasing for the last century or so, a phenomenon known as the Flynn effect. https://t.co/sCZvCst3hw (N ≈ 4 million)
(Note that the Flynn effect shows that IQ isn't 100% genetic; it doesn't show that it's 100% environmental.)
4. IQ predicts many important real world outcomes.
For example, though far from perfect, IQ is the single-best predictor of job performance we have – much better than Emotional Intelligence, the Big Five, Grit, etc. https://t.co/rKUgKDAAVx https://t.co/DWbVI8QSU3
5. Higher IQ is associated with a lower risk of death from most causes, including cardiovascular disease, respiratory disease, most forms of cancer, homicide, suicide, and accident. https://t.co/PJjGNyeQRA (N = 728,160)
