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
1. Core setup
2. Pivot points trades
3. PDH/PDL trades
4. Open interest addictions combined with rejections on charts.
5. Website to confirm bias
Very quick read.
Share if you liked for the benefit of everyone.
•Main setup of @ITRADE191
He used this setup daily for all trades.
1. EMA crossover 10/20
2. Supertrend 10/3
3. Vwap
4. RSI >
@MiteshFan @Mitesh_Engr @Abhishekkar_ MY TRADING SETUP .... I've been using it for a long time .. result good try it \U0001f607 pic.twitter.com/XThUD0ftbl
— itrade(DJ) (@ITRADE191) June 13, 2020
•Volume always greater than
Volume Should always be above 20 pic.twitter.com/CPgxLgpPKF
— itrade(DJ) (@ITRADE191) June 13, 2020
•Candle Rejecting from
— itrade(DJ) (@ITRADE191) August 25, 2020
•Pivot settings
— itrade(DJ) (@ITRADE191) October 20, 2020
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(I am forced to do this due to continuous hounding of Sikh Extremists since yesterday)
Rani Jindan Kaur, wife of Maharaja Ranjit Singh had illegitimate relations with Lal Singh (PM of Ranjit Singh). Along with Lal Singh, she attacked Jammu, burnt - https://t.co/EfjAq59AyI
Tomorrow again same thing happens bcoz fudus like you are creating a narrative oh Khalistan. when farmers are asking MSP. (RSS ki tatti khane wale Kerni sena ke kutte).
— Ancient Economist (@_stock_tips) December 5, 2020
U kill sikhs in 1984 just politics. To BC low IQ fudu Saale entire history was politics.
Hindu villages of Jasrota, caused rebellion in Jammu, attacked Kishtwar.
Ancestors of Raja Ranjit Singh, The Sansi Tribe used to give daughters as concubines to Jahangir.
The Ludhiana Political Agency (Later NW Fronties Prov) was formed by less than 4000 British soldiers who advanced from Delhi and reached Ludhiana, receiving submissions of all sikh chiefs along the way. The submission of the troops of Raja of Lahore (Ranjit Singh) at Ambala.
Dabistan a contemporary book on Sikh History tells us that Guru Hargobind broke Naina devi Idol Same source describes Guru Hargobind serving a eunuch
YarKhan. (ref was proudly shared by a sikh on twitter)
Gobind Singh followed Bahadur Shah to Deccan to fight for him.
In Zafarnama, Guru Gobind Singh states that the reason he was in conflict with the Hill Rajas was that while they were worshiping idols, while he was an idol-breaker.
And idiot Hindus place him along Maharana, Prithviraj and Shivaji as saviours of Dharma.