Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

Volatility is Back!

54 sec read

Volatility is a double-edged Sword! Crazy Volatility is back in the markets. And you know volatility in the very short term is a roller coaster ride that brings a lot of thrill in an increasingly uncertain market particularly VIX reaches teen levels. Volatility not only increases the reward but also increases the risk of play as well. The volatility is all started with the Evergrande crisis.

Despite having an Evergrande crisis and global markets are throttling despite Nifty manage to touch an all-time high (near to 18k) and Sensex hits 60,000+ levels. Most of the trend following strategies performed better during the month of September. However short volatility traders took a lot of heat this series.

Implied volatility exploded to 23+ levels which bring IV percentile to 89.9 levels. Amount of fear is rising in the markets and most of the public markets are already aware of the rising fear and hence the higher premium is demanded by the option sellers and they are the ultimate risk takers.

India VIX rising to 18+ levels

So far September series is a bit tougher month for naked straddle/strangle writers as the price is still away from 1 Standard Deviation Levels. Here Is the September strangle constructed on 27th Aug 2021.

As the October series is about to start in the next couple of days And the 70% odds for the October Series go to the 16768 – 18632 range.

Hopefully October series will bless the straddle traders! Learning about volatility is good however overlooking to volatility is seriously injurious for short-term trading.

Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

Bank Nifty Futures – Market Profile Charts and Overheated…

Bank Nifty Futures - Market Profile Charts and Overheated Emotions - September Series
Rajandran R
18 sec read

Nifty Futures – Increased Volatility and Downside Odds –…

Nifty Futures during the last couple of days are switching back to increased volatility. ATR is a greater measure of volatility. Because of the...
Rajandran R
36 sec read

Bank Nifty Futures Brings Upthrust Bar and Two Bar…

Last Friday Bank Nifty does a breakout failure followed by a sharp reversal forming an Upthrust bar and Two Bar reversals on Daily Timeframe....
Rajandran R
31 sec read

Leave a Reply

Get Notifications, Alerts on Market Updates, Trading Tools, Automation & More