Straddle Position

Bid-Ask spread 0.4

Position taken on 20/08/2021
Entry
Price 3542.15
TCS CE 3540
Entry @ 10:00 43.95
Exit @11:00 53.55
Profit 9.59999999999999
Lots 2
Lot Size 370
Net Profit 7104
ROI 6012.5

Rationale:

From the 10 am chart, we could see a formation of a hammar

pattern which could be a confirmation that the decline is over and
there could be a trend reversal. Using the MACD technical we
could see a convergence of 26 EMA and 12 EMA which is also a
sign of a trend reversal. Now,
if we look at the candle at 10 am, there is a lomg wick on the
lower side which shows sellers were
trying to push the market down but due to heavy buying pressure,
the market was within the bollinger
band range which also ensures a bullish move. So these factors
Entry Strategy: helped me take position at that time.

We used a long straddle strategy i.e buying the call and put option
at the same strike price.
This strategy basically is a multi-leg, risk-defined, neutral strategy
with unlimited profit potential.
The strategy looks to take advantage of a rise in volatility and a
large move in either direction from the underlying stock.
Long straddles benefit when implied volatility increases. Higher
implied volatility results in higher option premium prices.
Ideally, when a long straddle is initiated, implied volatility is lower
than where it will be at exit or expiration.
Overall Strategy:
Trade: 2

Straddle Position
Bid-Ask spread 0.3
Position taken on 17/08/2021
Entry
Price 1421.7
ADANI Enterprises CE 3540
Entry @ 1:15 32.5
Exit @02:30 36.3
Profit 3.8
Lots 2
Lot Size 1000
Net Profit 7600
ROI 1300

Rationale:

On 17th August 1pm, we could see a green candle engulfing the

previous small red candle which could a trend reversal and that
time RSI indication was close to 30 denoting overselling conditions
which was also another sign for a bullish move and after that at
1:15 as soon as the market opened above the last close, so it was
the right time to make entry into the market. Around 1pm, the call
side bid-ask was around 0.3% which even confirmed the right time
to enter. Also the bigger green candle 1:15 gave a closing above
the previous three candles.
Entry Strategy:
 We used a long straddle strategy i.e buying the call and put option
at the same strike price.
This strategy basically is a multi-leg, risk-defined, neutral strategy
with unlimited profit potential.
The strategy looks to take advantage of a rise in volatility and a
large move in either direction from the underlying stock.
Long straddles benefit when implied volatility increases. Higher
implied volatility results in higher option premium prices.
Ideally, when a long straddle is initiated, implied volatility is lower
than where it will be at exit or expiration.
Overall Strategy:
 0.8

Exit
3562.25
PE 3540
38
35.05
-2.95
1
370
-1091.5
12.9%

Exit Strategy:
 0.6

Exit
1436.4
PE 3540
47.9
41.6
-6.3
1
1000
-6300
1.2%

Exit Strategy:
Mean Reversion 3561

At 11 am, it was the right time to exit the position. From 10am to
11am, the market was trading ablove the mean reversion due to
formation of a big candle followed by doji and inverted hammer,
which was sufficient to alert for a trend reversal. Looking at RSI
indicator, we could see that, selling pressure had increase and the
market started declining.
At 11am as soon as the market was trying to touch the mean
reversion, i exited the position.
Mean Reversion 1434.95

After entering into the market at the bigger green candle, the next
candle that formed was a spinning top, which tells us that the
market could move in any direction. Keeping the stop loss at the
position entered into the market, I kept holding the position, and
RSI was moving 40-50, which was somewhat in my favour and also
around 2pm, the 12 EMA and 26 EMA converged and which
confirmed a upper move again and which was confirmed through
the next candle. At 2:15, the market tried to touch the mean
reversion but couldn't due to selling pressure building up and it was
somewhat right to exit the position but the next made a higher
open and the candle crossed the mean reversion and small wick on
the upper side, so i thought it was better to exit the position but if i
would i have looked for another candle which was a hammar, i
would have made more profit because a formation of hammar
confirmed a bullish move which is shown in the chart.
Case 1: TCS

Straddle Position - Case 2

Bid-Ask spread 0.4 0.8
Position taken on 24/08/2021
Entry Exit
Price 3602.6 3624.8 Mean Reversion
TCS CE 3600 PE 3540
Entry @ 12:15 29.5 28
Exit @01:45 41.8 19.6
Profit 12.3 -8.4
Lots 2 1
Lot Size 370 370
Net Profit 9102 -3108
ROI 5994 18.6%

Entry Rationale
Small candles post 11:30 started indicating that the market is set to move upwards and 30 minutes later,
when the trend starting becoming evident with bigger green candles within the bollender band, I took an
entry position at 12:15. The decision was well supported by indicators like MACD, RSI, smaller bid ask
spread and favourable vols.

Exit Rationale
Around 1:45, as soon as the market touched the mean reversion, I took a position to exit the market. By
then, it had shown a favourable trend over a decent duration of time. Post that, in order to manage the
risk, I took an exit position at 1:45. Also, indicators like MACD and RSI helped in taking the exit decision
by providing an indication of a downward trend that is going to follow.

Case 2: Sunpharma

Straddle Position
Bid-Ask spread 1 1
Position taken on 20/08/2021
Entry Exit
Price 756 765.55 Mean Reversion
Sunpharma CE 760 PE 760
Entry @ 11:15 7.3 17
Exit @02:00 11.1 9
Profit 3.8 -8
Lots 1 1
Lot Size 1400 1400
Net Profit 5320 -11200
ROI -5880 -17.3%

Entry Rationale
Around 11:00, the charts indicated that the market is expected to rise afer following a set pattern. The
long wick on the lower end of the candle at 11:00 indicated higher buying pressure along with rising vols.
At 11:15, with the formation of a green candle, I took a entry position at a point higher than the upper
limit of the previous candle.

Exit Rationale
Around 2:00, as soon as the market touched the mean reversion, I took a position to exit the market. It
was because that it had reached the maximum limit of my target risk levels and the market had depicted
slighty higher volatility during this period . Also, indicators like MACD and RSI helped in taking the exit
decision by providing an indication of a downward trend that is going to follow.
 Mean Reversion 3623.5

s and 30 minutes later,

llender band, I took an
RSI, smaller bid ask

to exit the market. By

order to manage the
king the exit decision

Mean Reversion 765.55

Exit Point
Entry Point
ng a set pattern. The
e along with rising vols.
gher than the upper

to exit the market. It

e market had depicted
ed in taking the exit
 Exit Point
Entry Point

Entry Point
Case 1: Infosys

Straddle Position
Bid-Ask spread 0.4 0.8
Position taken on 23/08/2021
Entry Exit
Price 1735.2 1741.1 Mean Reversion
Infy CE 1740 PE 1740
Entry @ 12:45 14.25 18
Exit @1:30 16.5 15.6
Profit 2.25 -2.4
Lots 2 1
Lot Size 600 600
Net Profit 2700 -1440
ROI 1260 4.5%

Entry Rationale
Since 11:30, there was a formation of small red candles and a pattern was being formed across all
technical indicators. The small wicks for the candles at 12:15 and 12:30 indicated that the market is set to rise.
The same was being indicated by MACD, RSI, smaller bid ask spread and favourable vols. All these factors
collectively helped me in taking the entry position at 12:45

Exit Rationale
Around 1:45, as soon as the market touched the mean reversion, I took a position to exit the market.
It was because that it had reached my target level of maximum risk. Also, indicators like MACD and RSI helped in
taking the exit decision by providing an indication of a downward trend that is going to follow.

Case 2: Jindal Steel

Straddle Position
Bid-Ask spread 0.8 0.8
Position taken on 23/08/2021
Entry Exit
Price 675.45 683.15 Mean Reversion
JSW CE 680 PE 680
Entry @ 10:45 12.3 13.9
Exit @12 14.55 10.7
Profit 2.25 -3.2
Lots 1 1
Lot Size 1350 1350
Net Profit 3037.5 -4320
ROI -1282.5 -3.6%

Entry Rationale
After operating at the edge of the Bollinder Band for some time, the market starting moving up post 10:30 and
vols also increased drastically. With the formation of the green candle at 10:45 along with indication of
favourable trend from the MACD and RSI indicators, I took an entry postion in the market.

Exit Rationale
Post 10:45, though the market was operating within the bollinder band, it was showing a downward trend for
about 30 min and the around 12:00, as soon as the market moved up and touched the mean reversion point, I
took a position to exit the market. It was because that it had reached my target level of maximum risk. Also,
indicators like MACD and RSI helped in taking the exit decision.
 1740

Exit Point

Entry Point

oss all
market is set to rise.
these factors

e market.
ACD and RSI helped in
ow.

684.05
g up post 10:30 and
ndication of

ownward trend for

n reversion point, I
ximum risk. Also,
Exit Point

Entry Point
Case 1: HDFC

Straddle Position
Bid-Ask spread 0.8 1
Position taken on 20/08/2021
Entry Exit
Price 2783.15 2729.9
HDFC CE 3540 PE 3540
Entry @ 9:45 9 93.1
Exit @10:00 12.08 90.3
Profit 3.08 -2.8
Lots 5 4
Lot Size 300 300
Net Profit 4620 -3360
ROI 1260 1.0%

Rationale:

From early on we could see a Doji

pattern formation which implied
that it had smaller real candle stick
body A doji implies indecision as it is
had both a lower and upper shadow.
Dojis signaled a trend continuation
or a price reversal, depending on
the validation that followed. It was
not a hammer as it did not occur
after a price decline, signaling a
potential upside reversal and only Exit Strategy:
Entry Strategy:
had a long lower shadow. Now, if we
look at the candle there is a long
wick on the lower side which shows
sellers were trying to push the
market down but due to heavy
buying pressure, the market was
within the bollinger
band range which also ensures a
bullish move. So these factors
helped me take position at that
time.
 The overall strategy here was of a
strangle where in I heldsa position
in both a call and a put option with
different strike prices, but with the
same expiration date and underlying
asset. It was a used as the
underlying security was estimated to
experience a large price movement
Overall Strategy:
in the near future but are unsure of
the direction. However, it is
profitable mainly if the asset does
swing sharply in price. This was
primarily done as Doji pattern was
observed while entering which led
me to believe about the impending
volatility. Hence, strangel was used.
 Mean Reversion 2714.65

One of the limitations of the

Doji is that there is no
assurance the price will
continue to move to the
upside following the
confirmation candle. A long-
shadowed hammer and a
strong confirmation candle
may push the price quite
high within two periods. This
may not be an ideal spot to
buy as the stop loss may be a
great distance away from
the entry point, exposing the
risk which doesn't justify the
potential reward. Hence, I
decided that it was the right
time to exit the position.
Straddle Position - Case 1 INFOSYS

Bid-Ask spread 0.4 0.8

Position taken on 20/08/2021
Entry Exit
Price 1730.05 1735.4
Infy CE 1740 PE 1740
Entry @ 10:00 15.8 23
Exit @10:30 18.45 21.5
Profit 2.65 -1.5
Lots 2 1
Lot Size 600 600
Net Profit 3180 -900
ROI 2280 7.0%

Entry Rationale
At 10 am, a hammar was formed, which confirmed a trend reversal and the next candle confirms the move and the next candl
candle which confirms the bullish move. Entry can be carried out at this point since it is also at the extreme of the bollinger ba

Exit Rationale
Coming to the exit part, the candle at 10:15 gave an opening above the mean reversion, which was a good signal for bullish m
RSI indicator showed the highest value for the last few days, this was also a signal for a trend reversal and also there was a for
spinning top which confirmed the move, so it was the best time to exit the position.

Straddle Position - Case 2 ADANI Enterprises

Straddle Position
Bid-Ask spread 0.3 0.6
Position taken on 17/08/2021
Entry Exit
Price 1421.7 1436.4
ADANI Enterprises CE 3540 PE 3540
Entry @ 1:15 32.5 47.9
Exit @02:30 36.3 41.6
Profit 3.8 -6.3
Lots 2 1
Lot Size 1000 1000
Net Profit 7600 -6300
ROI 1300 1.2%

Entry Rationale
On 17th August 1pm, we could see a green candle engulfing
the previous small red candle which could a trend reversal
and that time RSI indication was close to 30 denoting
overselling conditions which was also another sign for a
bullish move

Exit Rationale

At 2:15, the market tried to touch the mean reversion but

couldn't due to selling pressure building up and it was
somewhat right to exit the position but the next made a
higher open and the candle crossed the mean reversion and
small wick on the upper side, so i thought it was better to exit
the position but if i would i have looked for another candle
which was a hammar, i would have made more profit because
a formation of hammar confirmed a bullish move which is
shown in the chart.
 Mean Reversion 1734.55

e move and the next candle is an engulfing

extreme of the bollinger bands.

a good signal for bullish move. At 10:30,

al and also there was a formation of a
Mean Reversion 1434.95