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Short Straddle Intraday Trading bot

Short Straddle Strategy:

We know that market trends only 30% of the time and remaining 70% of the time it stays in range bound, which immensely helps the option sellers because the more market stays in range bound, higher the decay of premiums.

The above chart is the daily return distribution of Index, we could see more number of times Nifty and Bank NIFTY moved between -0.30% to 0.30% on daily basis, only lesser number of days it has moved wildly on either side, if we follow ATM short straddle strategy, with a fixed stop loss, then we can control our risk when market moves wild and also we can continue to make profits when market stays in range bound.

Bank Nifty:

We short one lot of ATM options at 9:20 am every day with 50% stop loss on each leg,we will choose weekly expiry not monthly expiry as the decay is more with weekly options.

For example, if we short ATM CE options at Rs.100, then our stop loss is 150, when that is reached we exit ce, if not we exit by EOD only. Please note that we exit only the strike that hits the stop loss, not both legs.

When tested with one lot, the returns are really good.

It has ended up in profits almost every month

Nifty short straddle:

We tested the same with Nifty as well with same rules. We short one lot of ATM options at 9:20 am every day with 50% stop loss on each leg, For example, if we short ATM CE options at Rs.100, then our stop loss is 150, when that is reached we exit ce, if not we exit by EOD only. Please note that we exit only the strike that hits the stop loss, not both legs. Here’s the result

Returns are really good with Nifty options as well

On monthly basis returns are consistent as well

It is fully automated only with Aliceblue and Trustline broker account, if you do not have one, open account using mentioned below link

https://squareoffbots.com/aliceblue - AliceBlue 

https://signup.itradeonline.in Trustline

If you have an existing account, you can also use that. You just have to go to below link and enable free trial

https://squareoffbots.com/aliceblue/login AliceBlue 

https://squareoffbots.com/trustline/login Trustline