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Strategy Lab | A multi-legged hedged strategy in Bank Nifty provides good risk-reward returns

The short straddle is a common trading strategy but loses money when the market is trending. Here’s a back-test of a trader’s solution to this problem

August 05, 2022 / 02:31 PM IST
Strategy Lab | A multi-legged hedged strategy in Bank Nifty provides good risk-reward returns

Stock Market Today:

AlgoBulls The short straddle is a very common intraday trading strategy deployed. In this non-directional strategy the trader short sells at-the-money (ATM) call and put options and then waits for the option prices to decay on account of loss in time value of the option. What differs from trader to trader is how they manage the risk in the straddle trade or how they adjust it when the market is trending. Being a non-directional strategy, it will make losses on a...

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