We had posed a question last month whether a USDINR Long Call Condor made sense given decreasing volatility and range-bound behavior. We put the following USDINR October 63.00/63.50/64.00/64.50 Long Call Condor trade on:
We would’ve made 4x if the Rupee traded between 63.10 and 64.40. The trade got blown out of water with the Rupee trading in a range around 61.50:
Lessons learnt:
- The trade carries less risk (and less reward) as you approach expiry. By taking on October contracts back in September, the trade stood out far too long.
- The Condor trade makes sense if you get the trading range near expiry right. Which we clearly didn’t.
- On the plus side, the trade was cheap to put on, so down Rs. 100 with the possibility of +Rs. 400 if we were right was not a bad idea.
Next trade will be after mid-November…
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