Positional Bull Put on the 125-Minute EMA: First Trade of a New System
Everything else in this journal so far has been fast — 0DTE structures that live and die in a single session, weekly condors that run three or four days, an intraday bot signal. This is the first genuinely positional system I have put on: one signal, a hold measured in days, and a trend filter instead of a volatility read.
First trade closed +₹2,213. It was booked early and on purpose, and that decision is most of what this post is about.
The system
A trend-following credit spread, timed off a single moving average on a slow chart.
- Chart: 125-minute candles, one indicator — the 9 EMA.
- Long bias (sell puts): when a 125-minute candle closes above the 9 EMA, sell one lot of a Nifty PE priced ₹80–100. To cap risk and cut margin, buy a further-out PE as a hedge, roughly 2% below the short strike.
- Short bias (sell calls): the mirror image — candle closes below the EMA, sell a CE in the same premium band, hedge with a CE about 2% above.
- Stop: if, after a long entry, a 125-minute candle closes back below the EMA, close the position. (Mirror for shorts.)
- Expiry selection: Nifty weekly expiry is Tuesday, so a position opened on Monday goes into the next week's expiry, not the one a day away.
- Hold rule: if the trade moves favourably, hold until one day before expiry — never into expiry day itself, to stay clear of the gamma blast when a near-the-money short option's sensitivity goes vertical.
Two things about the design are worth drawing out before the trade, because they are the reasons I am willing to run it.
The premium band does the strike selection. I am not picking a delta or a distance directly — I am selling whatever put happens to trade at ₹80–100 and letting the market's own pricing place the strike. In a calm week that is a strike close to the money; in a fearful week the same ₹80–100 sits much further out. The band quietly widens my cushion exactly when the market is most afraid, which is the opposite of what a fixed-distance rule would do.
The EMA is both the entry and the stop. Same line, read the same way, in both directions. A close above puts me long-biased; a close back below takes me out. There is no separate stop level to compute under pressure and no rupee figure to argue with — the exit is a candle close relative to a line I am already watching. Given how much damage I have done to myself elsewhere in this journal with stops that lived in my head, an exit that is this mechanical is the entire appeal.
This week's trade
| Leg | Strike | Action | Price |
|---|---|---|---|
| Put | 23,750 PE | Sell | 92.45 |
| Put | 23,250 PE | Buy (hedge) | 18.20 |
- Entry: 27-07-2026 (Monday), 11:20 am, on a 125-minute close above the 9 EMA
- Expiry: 04-08-2026 — next week's, per rule 5, because Monday sits right before the 29-07 Tuesday expiry
- Net credit: 92.45 − 18.20 = 74.25 points → ₹5,568.75 (lot size 75)
The hedge sits at 23,250, which is 500 points — 2.1% below the 23,750 short strike. That matches the "2% away" rule and it defines the whole risk box.
- Spread width: 500 points
- Max profit: the credit, ₹5,568.75, if Nifty is above 23,750 at expiry
- Max loss: 500 − 74.25 = 425.75 points → ₹31,931 if Nifty is below 23,250
- Breakeven: 23,675.75
That max-loss figure deserves a hard look. The structure risks about ₹31,931 to make ₹5,569 — a nominal risk-reward near 5.7 to 1 against. That is normal for an out-of-the-money credit spread and it is survivable only because the two exits (the EMA-close stop and the never-hold-into-expiry rule) are supposed to take me out long before the short strike is ever breached. The ₹31,931 is what happens if both exits fail. It is not a number I ever intend to see, but it is the number I should be sizing against, and I want it written down in the first post rather than discovered in some later one.
What happened
Entered Monday late-morning. Nifty held above the EMA, the short put decayed, and by Tuesday 28-07 the position was up ₹2,213 — about 40% of the maximum profit, roughly 29.5 points of the 74.25 collected.
No 125-minute candle closed back below the EMA, so the stop never triggered. Under the pure rules I would still be holding, aiming to carry it toward the 03-08 close (one day before the 04-08 expiry).
I closed it anyway, on Tuesday, for the ₹2,213.
Why I broke the hold rule — and why I am flagging it as a break
The honest reason: this system is in a testing phase, and I would rather bank a clean first data point than let it run.
I am setting a working profit target of the ₹2,100–2,300 range for now, taken in combination with the EMA-close stop, while I gather enough trades to see whether the full hold rule actually pays. That is a deliberate, stated deviation — not the same animal as the discretionary exits that have cost me elsewhere.
But I want to be precise, because I have been burned by exactly this kind of self-justification before. Two posts ago I cut a bot-signalled winner short out of fear and called it prudence. The difference I am claiming here is:
- That exit was a feeling in the moment, contradicting a rule I had already committed to. This one is a pre-declared testing parameter, written down before it repeats, with a specific band.
- That one had no plan to converge back to the system. This one is explicitly temporary: once the system has a track record, the target either becomes a permanent rule (tested, with numbers) or I revert to the full hold.
That distinction is real, but it is also exactly the story I would tell myself if I were rationalising. So the test is not the argument — it is the log. If I take ₹2,100–2,300 five times and never once record what the full hold would have paid, then "testing phase" was a costume for "I like banking small wins," and this paragraph will be the evidence. The rule for the rule: every early exit records the counterfactual — what holding to one-day-before-expiry would have returned. Without that column, I cannot tell discipline from comfort, and neither can anyone reading this.
Where this sits relative to the rest of the journal
This is the first system I have run whose core risk is direction, not volatility. The condors and the 0DTE structures are all short vol — they want the market to sit still or, in the ratio straddle's case, to move a measured amount and stop. This one wants a trend and is explicit about it: the EMA close is a directional signal, the credit spread is a directional bet, and I am being paid to be right about which side of a moving average price stays on.
That is worth stating plainly because it means this position does not diversify my short-vol book the way I have been pretending new systems might. If a shock hits, the short put here loses at the same time as every other short-premium position I hold — the gap-down that took my Sensex condor to max loss last week would have hit this too. The instrument is different; the exposure, on a bad day, is not. That is the aggregate-risk problem I keep writing about, and adding a positional trend system does not solve it. It just adds another line to the total.
What I am watching
- The counterfactual on every early exit. ₹2,100–2,300 banked, versus what the full hold to one-day-before-expiry would have made. Without this the testing phase is meaningless.
- How often the EMA-close stop actually fires — and how much it gives back when it does. The whole risk model rests on that stop taking me out well above the short strike. It has not been tested once yet.
- Whether the ₹80–100 band drifts the strike sensibly across volatility regimes. In a calm week it should sit close; in a fearful one, far. I want to confirm it behaves that way before I trust the cushion.
- Aggregate directional-plus-vol exposure. This trade is short a put. So is half my book on a bad day. One more reason to be measuring net exposure across systems rather than admiring each position alone.
First trade of a new system, one clean win, and a deviation I have chosen to document rather than hide. The number to judge me on is not the ₹2,213 — it is whether the counterfactual column ever gets filled in.
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.