Point-stop straddle joint exit
This intraday short straddle sells the at-the-money call and put of NIFTY's monthly expiry at 09:17 and watches each leg in option points. If either leg rises 100 points, both legs are closed as a stop; if either leg falls 100 points, both are closed as a target. Otherwise the straddle is closed at 14:55. It started as a BANKNIFTY monthly rule and runs on NIFTY by default.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
Because one leg's 100-point rise closes the whole straddle, this behaves like a classic range trade. In this test quiet sessions earned ₹90,354 over 108 trades with an 84% win rate, as neither leg moved far and both decayed until 14:55. Trend days lost ₹70,498 over 69 trades with a 26% win rate: a steady move lifted one leg by 100 points and the joint exit locked in the loss with no chance for the other leg to compensate. Choppy days lost ₹30,453 over 66 trades, and gap-down opens ₹22,782 over 40, while gap-up opens made ₹11,205 over 37. NIFTY's weekly expiry days, Tuesdays, made ₹21,374 over 50 trades, while other days lost ₹31,972.
About this strategy
- At 09:17, find the strike nearest the near-month NIFTY futures price on the current monthly expiry. If the chain is not available by 09:18, skip the day.
- Sell one lot each of the call and put at that strike.
- Watch each leg's price tick by tick against its own entry price.
- If either leg rises 100 points above its entry, close both legs: a stop.
- If either leg falls 100 points below its entry, close both legs: a target.
- Otherwise close both at 14:55. One trade a day, no re-entry.
Why traders use it
A points-based rule is simple to follow on any screen: no percentages, no combined premium arithmetic, just one number per leg. Closing both legs together keeps the position from turning directional after a stop, and treating a big fall in one leg as a win books profit before the other leg can run. Monthly options have more time value, so intraday decay is gentler and stops are hit less often than on weekly options.
The year in plain words
On NIFTY from 1 Oct 2025 to 30 Sep 2026 with default settings, the strategy traded 245 days and won 58% of them, but lost ₹8,043 before costs, a profit factor of 0.96. Losses averaged ₹1,973 against wins of ₹1,398, so the higher win rate was not enough. 159 trades ran to 14:55, 78 hit the 100-point stop and only 8 reached the target. July made ₹17,897, while October and March lost ₹26,107 and ₹24,463. After ₹20 per order and bid-ask slippage the loss grows to ₹54,436: monthly options have wider spreads than weeklies.
What the settings do
Risks
- Two unhedged short options carry open-ended risk until the 100-point stop is reached, and fast moves can fill beyond it.
- A fixed points stop means very different risk on NIFTY and BANKNIFTY, and as volatility changes.
- Costs on monthly options made a small pre-cost loss more than six times larger.
- The target rarely triggers, so most profit depends on time decay until 14:55.
Who it suits
Traders who want a very simple, number-based intraday straddle rule on monthly options, with margin for an unhedged short straddle, and who will study the effect of costs before trading it.
Questions traders ask
What is a joint exit on a straddle?
Both legs are closed together the moment either leg hits its stop or target, rather than managing each leg separately. It keeps the position balanced but means one leg's move decides the fate of the whole trade.
Is the points-stop straddle profitable on NIFTY?
In this backtest from 1 Oct 2025 to 30 Sep 2026 it lost ₹8,043 before costs and ₹54,436 after ₹20 per order and bid-ask slippage, with a ₹39,644 maximum drawdown before costs. Past results do not guarantee future results.
Why does it use the monthly expiry?
The rule was designed for BANKNIFTY, which now has only monthly options. Using the monthly series on NIFTY keeps the same structure. Monthly options decay more slowly intraday and have wider spreads than NIFTY's Tuesday weeklies.
What points setting suits NIFTY?
The 100-point default was chosen for BANKNIFTY. NIFTY is a little under half its level, so about 45 points gives a similar sensitivity. At 100 points, NIFTY trades see fewer stops and targets and more exits at 14:55.