muhd_nihal

BN Iron Condor

NSE:BANKNIFTY   NIFTY BANK
Following trade is for educational purposes only. An Iron Condor is an option strategy, where the expected outcome for next week is range-bound.

A CE option mentioned below is a European Call Option, while a PE option is a European Put.

A hedger always buys these options and a speculator mostly sells one.

But when the speculator only sells these options, the risk involved is unlimited and the margin requirement is also high. This is called naked option selling. When both CE and PE are sold, it is called a short straddle.

In combination with this, if we buy much farther CE and PE, the short straddle becomes an Iron condor. Here, the idea is to capture the option premium in a range-bound market with reduced risk and margin compared to short straddle.

The spread between buy and call leg is based on optimum use of margin. Since the option premium is credited to us in advance, it is also a credit spread.

Please leave a comment if you need further clarification on the following trade

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Sell 35000PE, Buy 34400PE
Sell 36700CE, Buy 37300CE


The history of trades of this trade model is in the following link:
https://docs.google.com/spreadsheets/u/2...

My concept of trading is not to be an overnight millionaire, but a disciplined method to grow the wealth that you own.
Please leave a like if you like the trade ideas :)
Comment: Exit 36700CE, 37300CE
Sell 35900CE, 36500CE

Sorry for delayed update here
Comment: Exited 35900CE, 36500CE
Took 35000CE sell, 35600CE buy
Now this is an iron butterfly
In addition to this, holding a debit spread only to improve breakeven, not to make a profit this week.
But since it is not part of this model, I will not be posting it here. Hence, if the trend continues, we will be booking our first loss this week.
Comment: https://ibb.co/YfBFdBV

Current position of the model,
PnL at -5k
Comment: Exited 35000PE @448
Comment: Exited 34400PE @155
Comment: Sell 34000PE, Buy 33400PE
All these are for educational purposes only. Consult your financial adviser before taking up any position.
Comment:
Comment: Its a market holiday tomorrow,
Now, the loss will be pegged at -800 if BN stays between 35k and 34k.
This can also be covered if we convert these positions to intraday on Thursday and take additional intraday trades on Thursday.
Comment:
Trade closed manually
Comment:

Comments

Do you carry these type of position overnight? Also how you adjust this position if market turns trending on one side?
Good approach though.
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muhd_nihal architk
@architk, Yes, these are overnight positions. I adjust the position based on momentum. I ladder up positive legs mostly.
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