Straddle with leg re-entry
This is the intraday ATM short straddle with a twist: when a leg is stopped out, it is not abandoned. The strategy waits for that leg to come back to its original selling price and sells it again, up to twice per leg. Re-entry modes at a fresh ATM strike or on a momentum fade are available as settings. The aim is to recover premium on days when a spike reverses.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
As with other per-leg-stop straddles, this one earned on trend days and lost on choppy ones, the opposite of textbook intuition. On trend days that closed near the high or low it made ₹1,12,624 over 178 leg trades: one side is stopped early, the price never returns to the entry so no re-entry happens, and the other side decays to almost nothing. On choppy, wide-range days it lost ₹76,214 over 197 legs, because price swung back and forth, each return to cost triggered a re-entry, and the next swing stopped that re-entry too. Entries in uptrends made ₹45,706, while downtrends barely broke even at ₹2,118.
About this strategy
- At 09:20, sell one lot each of the ATM call and ATM put of the nearest NIFTY weekly expiry.
- Give each leg its own stop at 30% above its selling price.
- When a leg is stopped, in the default mode wait for the same strike to trade back down to its original selling price, then sell it again.
- Alternative modes re-sell the new ATM option at once, or after it has fallen 10% from its price at the stop.
- Each re-entry carries its own 30% stop; at most two re-entries per leg and none after 14:30.
- Close everything still open at 15:15.
Why traders use it
A plain straddle with leg stops often gets stopped on a morning spike that later fades, leaving the trader watching the premium they gave up decay anyway. Re-entering when the price comes back to cost lets the strategy rejoin the trade at the same terms. Many traders like the discipline it brings: the stop is never moved, but a fresh chance is taken when the market proves the spike was noise. Limiting re-entries to two per leg caps how often a bad day can repeat the loss.
The year in plain words
On NIFTY from 1 Oct 2025 to 30 Sep 2026 the rules produced 672 leg trades, including re-entries, and made ₹51,316 before costs, a profit factor of 1.06. After ₹20 per order and bid-ask slippage they lost ₹17,786: with about 56 leg trades a month, costs outweighed a thin edge. Only 39% of legs won, but average winners of about ₹3,370 were larger than average losers of about ₹2,070. 373 legs hit the stop and 299 ran to 15:15. April 2026 was the best month at ₹24,180 and March the worst at a loss of ₹11,901.
What the settings do
Risks
- On a whipsaw day each leg can be stopped three times, multiplying the loss of a plain straddle.
- Re-entry at cost assumes a fill at exactly the old price; live fills on a touch can be worse.
- With about 670 leg trades a year, brokerage and spread turned a profit before costs into a loss; statutory charges are not included either.
- Short ATM options need full selling margin and can lose sharply on a sudden move.
Who it suits
Intraday option sellers who already trade the 09:20 straddle and want to test re-entry rules, and who can automate stop and re-entry orders through the day.
Questions traders ask
What is re-entry in a short straddle?
After a leg's stop loss is hit, a re-entry sells that leg again if certain conditions return. In the default mode here, the same strike must trade back down to its original selling price. Each re-entry gets a fresh stop, and the number of re-entries per leg is capped.
Is the straddle with re-entry profitable?
Before costs it made ₹51,316 on NIFTY from 1 Oct 2025 to 30 Sep 2026, but after ₹20 per order and bid-ask slippage it lost ₹17,786 over 672 leg trades. Statutory charges were excluded. Past results do not guarantee future ones, and the result depends heavily on trading costs.
Which re-entry mode is used by default?
Re-entry at cost: the same strike is re-sold only once its price falls back to where it was first sold. The other modes, re-selling the new ATM strike at once or after a 10% fade, can be chosen in the settings and give different results.
Why did it do better on trend days than choppy days?
On a trend day one leg is stopped and the price never comes back, so there is no re-entry, while the other leg decays. On a choppy day the price keeps returning to cost, re-entries happen, and the next swing stops them again.