Greedy Straddle Strategy:
This is anΒ intraday Strategy on Weekly Options.Β
It is a variation of Dumb Straddle Strategy whereΒ instead of keeping the stop loss at 20%, We keep the stop loss at 50%Β like a greedy person who does not want to get hit by stop loss.
The chance of stop loss gets lower in Greedy Straddle but the amount of loss become higher!
Dumb Straddle Strategy:
This is an intraday Strategy on Weekly Options.
Entry:
It willΒ sell intraday ATM optionsΒ at the start of the market but since inception it is selling 5 minutes after the market start i.e. 9:20 AM to avoid the maddening volatility of market start.Β
Risk Management:
It will have two stop losses.
- One is % based stop loss i.e. it will close the trade if 20% of the premium is hit.Β So, if a call options is sold at 100, then it will get squared off if the price reachesΒ
- One is a time-based stop loss, i.e. It will close the trade at the end of the market. Currently, brokers initiate an automatic square-off process 30 minutes before the market closes, precisely at 15:00. This timing aligns with the heightened volatility observed during the market’s final half-hour. Consequently, we set our reference time at 14:50. In the event that the stop-loss mechanism described earlier is not triggered, it will serve as a take-profit point.
This is called Dumb Straddle Strategy because it looks like a tooΒ simple strategy based on Straddle.