Sensex Condor 4: A Loss I'm Proud Of

Fourth Sensex weekly condor. It lost money. It is also, by some distance, the best-executed trade in this entire journal, and those two facts are the whole reason it gets a post.

Result: −₹1,098.

To understand why I am pleased with a red number, you have to read it against Sensex Condor 3, which lost ₹3,400 — the full structural maximum — because I looked at a small loss the day before expiry, decided to hope the market would come back overnight, and got gapped through my short strike the next morning. Same instrument, same shape of week, same decision point. Different choice.

The trade

Deployed 27-07-2026, expiring 30-07.

• Call spread credit: 190.00 − 122.45 = 67.55

• Put spread credit: 152.25 − 101.30 = 50.95

• Total credit: 118.50 points → ₹2,370 (lot size 20)

• Body: 76,000 → 77,400, 1,400 points

• Wings: 300 points each side

• Breakevens: 75,881.50 and 77,518.50

• Max loss: 300 − 118.50 = 181.50 points → ₹3,630

Same geometry as always. The position risked ₹3,630 to make a realistic ₹1,185 at the 50% target. Nothing about the structure was the story. The exit was.

The decision

29-07, on the open. Sensex gapped up — opened above my short call at 77,400 and stayed there. The index was now sitting on the wrong side of my upper short strike with expiry the next day. The call spread was underwater and, if the index held above 77,400 into expiry, heading toward the structure's maximum loss on the upside.

At that point I was down about ₹1,098. This is the exact situation that destroyed condor 3, only mirrored — that time the gap was down through the put side, this time up through the call side. The temptation was identical too: expiry is tomorrow, maybe it comes back, maybe don't crystallise the loss yet.

I closed it. On the open. For the ₹1,098.

The rule I was following is the one I wrote at the end of condor 3, in as many words: never hold a losing condor into expiry hoping the market reverses; the overnight-before-expiry window is the highest-risk period in the trade and I have no control inside it. Condor 3 taught me that by charging me ₹3,400 for the lesson. Condor 4 was the first chance to prove I had actually learned it rather than just written it down.

The arithmetic of getting it right

Condor 4's loss is 30% of the structure's maximum. Condor 3's was 100%. The difference between them — about ₹2,300 — is the price of the exact decision I got wrong last week and right this week. Same market behaviour, same instrument, opposite discipline, and the P&L gap between the two outcomes is almost entirely self-inflicted or self-saved depending on the week.

That is what I want on the record: the loss was not the mistake. The mistake, last time, was the hold. This time there was no mistake. The market moved against me — which it is entitled to do, and which the ₹3,630 max loss always priced in — and I took the small, early, controlled version of the loss instead of gambling on an overnight reversal for the large, uncontrolled one.

Why "against the market" is the rule

The reasoning I leaned on, from condor 3, was: don't go against the market. Let me be precise about what that means here, because it is easy to mistake for a directional view, which it is not.

A short condor has no opinion about direction. But once the index has gapped clean through one of my short strikes and stayed there, the market has made a statement: it has repriced to a level outside my profit zone and shown no interest in coming back. Holding the position at that point is not neutrality any more — it is an active bet that the market is wrong and will reverse, placed by someone (me) who is down money and motivated to believe it. That is the definition of going against the market: overriding what the tape is plainly doing because I would prefer a different outcome.

The gap-up holding above 77,400 is the tape being unambiguous. The right response to an unambiguous tape that has moved against my structure is to accept it cheaply, not to argue with it overnight into expiry-day gamma.

What this does not mean

I want to guard against the wrong lesson, because a well-executed loss is exactly the kind of thing that can teach something false.

It does not mean I have "fixed" the condor. Two of my four Sensex condors have now lost, and the structure's risk-reward — roughly ₹3,630 at risk for a ₹1,185 target — still demands a high win rate I have not demonstrated. Good execution on the exit does not repair an unfavourable payoff; it just stops me converting ordinary losses into maximum ones.

It also does not mean the resting stop-loss order I keep promising is now unnecessary. I still closed this manually, by watching the open and choosing to act. It worked because a gap-up-and-hold is obvious and I was at the screen. A slower bleed, or a gap on a morning I was distracted, would still find me exposed. The mechanical stop — placed at deployment, before I have feelings about the position — remains the actual fix. This trade was discipline standing in for engineering, and discipline is not something I get to assume will show up every week.

Where the condor book stands

The book is still red, and this trade made it redder. But condor 4 is the first Sensex condor where nothing went wrong that was inside my control. The market gapped against me — priced in from day one — and I paid 30% of the max instead of 100% of it.

If every future loss on this structure looks like condor 4 instead of condor 3, the strategy has a chance. If they keep looking like condor 3, it does not, and the difference between those two futures is not the market. It is whether I close on the open or hope overnight.

This week I closed on the open.

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.