The second trade in the 125-minute EMA system
The first trade in this positional system was a straightforward bull put: 125-minute candle closes above the 9 EMA, sell a put priced 80–100, hedge it well below. That trade got booked early against a self-declared testing-phase target. This one didn't stay a simple bull put for its whole life — the market took it somewhere the written rules hadn't fully covered, and I had to decide what to do about that in real time.
Leg one: the system as written
On 06-08, the entry signal fired the normal way — 125-minute candle above the 9 EMA — and I sold a put, hedged below it, exactly per the rules.
| Leg | Strike | Action | Premium |
|---|---|---|---|
| Short put | 24600 PE | Sell | 95.75 |
| Long put (hedge) | 24100 PE | Buy | 12.25 |
Nifty lot size is 65, 1 lot = 65 units.
| Metric | Value |
|---|---|
| Net credit | (95.75 − 12.25) × 65 = ₹5,427.50 |
| Spread width | 500 |
| Max loss | (500 − 83.50) × 65 = ₹27,072.50 |
| Breakeven | 24600 − 83.50 = 24516.50 |
Standard bull put spread. Bullish thesis, defined risk, nothing unusual yet.
Leg two: the market disagreed, and the calendar didn't help
By 07-08 — a Friday, expiry the following Tuesday — the 125-min candle had closed back below the 9 EMA. The system's written rule for that is to exit. I didn't. With the weekend ahead and two full sessions of theta and gap risk sitting between me and Monday's open, I chose to hedge the existing bull put rather than close it, by selling the call side against it.
| Leg | Strike | Action | Premium |
|---|---|---|---|
| Short call | 24600 CE | Sell | 105.50 |
| Long call (hedge) | 25100 CE | Buy | 6.85 |
Selling the 24600 CE against an existing 24600 PE — same strike on both shorts, with 500-point wings on both sides (24100 and 25100) — turns the position into a genuine Iron Fly, not an ad hoc patch. It's a real, nameable structure, which matters, because it means the deviation from the bull put system wasn't just "I didn't want to take the loss" — it was a decision to convert into a different, defined-risk structure rather than sit exposed and undefended into a weekend that the market had already told me was going the wrong way.
The combined position
| Metric | Value |
|---|---|
| Total credit (both spreads) | 83.50 + 98.65 = 182.15/unit × 65 = ₹11,839.75 |
| Max loss (either wing) | (500 − 182.15) × 65 = ₹20,660.25 |
| Breakevens | 24417.85 – 24782.15 |
Naming the deviation, not laundering it
This journal's rule is to call a broken rule a broken rule, not dress it up as an adaptation. So: the 125-minute EMA system says exit on a close back below the EMA. I didn't exit. I hedged instead. I want to be honest about why that's defensible and why it's still worth flagging.
It's defensible because it wasn't a rule violated for no reason — it converted an exposed, one-directional position into a symmetric, capped-risk one before two non-trading sessions I couldn't react to intraday. It's still a deviation because "hedge instead of exit" isn't in the system as written, and a system I quietly patch under pressure isn't really being tested — a different system is. If this pattern (EMA flips against me, weekend or event risk ahead, so I convert to a fly instead of exiting) is something I want to keep doing, it needs to become an explicit branch of the rule, not a one-off judgment call that happened to work this time.
The exit
Both spreads shared the same 11-08 expiry. The market went sideways on 10-08 — Monday — which is exactly what an Iron Fly wants once it's on: the underlying pinned near the short strikes, both sides bleeding premium together. I booked the position that day, one day ahead of expiry.
| Metric | Value |
|---|---|
| Result | +₹2,400 |
| % of total credit | ≈20.3% |
| Points of combined premium decayed | ≈36.9 |
What I take from this one
The bull put leg followed the system. The call leg didn't — it was a discretionary hedge dressed as risk management, and it happened to convert into a clean, symmetric structure instead of an improvised mess, which is the only reason I'm not writing a "the stop I wrote down and didn't use" post right now. The lucky part is that "hedge into a fly ahead of the weekend when the EMA flips" turned out to be a coherent idea. The unlucky part, if I don't fix it, is that I now have a live example of discretion paying off inside a system I built specifically to remove discretion — and a payoff is exactly the condition under which a bad habit gets reinforced instead of corrected. Before the next EMA flip, this branch gets a written rule, or it goes back to being a plain exit.
Disclaimer
This is a personal trading journal. It is a record of my own trades, my own money and my own mistakes — nothing more.
Nothing here is a trade recommendation, a tip, a call, or advice of any kind. I am not a registered adviser and I am not qualified to tell anyone what to do with their capital. The strikes, premiums, entries and exits above are what I did, not what you should do.
If you read this blog and place a trade because of it, that trade is yours. I accept no responsibility for anyone else's losses. Do your own research, size for your own risk, and understand that options can lose you more, faster, than you expect.