Sensex Iron Condor 2: The Win That Tests Nothing

This is the second Sensex condor. The first one is written up in Iron Condor 1: The Stop That Wasn't There — a ₹1,000 rupee stop that existed only in my head, that I had to execute by hand on 08-07, that I did not execute fast enough, and that ended up costing ₹2,400.

This one made ₹1,170. I want to be careful about what that does and does not mean, so the conclusion goes first: the thing that broke last time never came up this time. The trade exited on a profit target. Profit targets are easy. The stop is still exactly as untested as it was on the 9th of July.

The trade

Entered 13-07-2026 at 09:45 am, on the 16-07 weekly expiry. Three sessions after the 08-07 shock, with premium still fat from it.

One lot per leg, per the sizing rule. No scaling, no legging in.

• Call spread credit: 146.45 − 91.40 = 55.05
• Put spread credit: 237.50 − 167.25 = 70.25
• Total credit: 125.30 points

At a lot of 20 that is ₹2,506 gross. The payoff chart at execution showed max profit around ₹2,400 once costs were netted off, which is the number the target keys off.

• Body: 76,500 → 77,900, 1,400 points wide
• Wings: 300 points each side, symmetric this time
• Breakevens: 76,374.70 and 78,025.30
• Structural worst case: 300 − 125.30 = 174.70 points → ₹3,494, either side

Two things worth pulling out of that table before the outcome.

The put side paid more than the call side. 70.25 against 55.05, for identical 300-point spreads. That is skew, same as I noted on the BankNifty condor: puts are richer because protection is what people actually buy. It is free money right up until the day the market moves in the direction the skew was warning about, which is precisely what happened on the 8th.

The hedges cost 67% of the premium collected. I took in 383.95 on the two shorts and paid out 258.65 on the two longs. Two-thirds of the gross premium went straight back out of the door to buy wings. That is the price of 300-point spreads — the longs sit close to the shorts, so they are expensive. I am not complaining about it; capping the worst case at ₹3,494 on a 1,400-point body is what makes the position sizeable at all. But it is worth seeing plainly that on this structure I am renting most of my premium to the hedge, and the trade only works if decay is fast enough to beat that rent.

The exit

15-07. Cumulative profit hit ₹1,200 — 50% of the ₹2,400 payoff max — and the position came off.

Filled for ₹1,170.

That ₹30 gap is the honest bit of arithmetic. Thirty rupees across a lot of 20 is 1.5 points of slippage spread over four legs coming off at once, which is about as clean as I am going to get on a four-legged exit. Recording it because if I only ever write down the trigger price and not the fill, my journal slowly becomes a record of a system that trades at mid.

So: 58.5 points captured of 125.30 collected — 47% of the credit, in two and a half sessions, one day before expiry.

Nothing happened. That is the entire story of the trade. The index stayed inside a 1,400-point box for two days and I was paid for the privilege of it doing so. There is no skill in this recap. There is a structure, and there was calm weather.

What this trade did not do

The first Sensex condor died of a specific, identified failure: an exit that required me to be at the screen, to do mental arithmetic on a four-legged position under stress, and to act inside a few minutes. On 08-07 I was not, could not, and did not.

Look at what got me out this time. A profit target. A number I could compute in advance, sitting on the right side of the position, with no urgency attached to it — if I had been ten minutes late to it the trade would have made ₹1,150 instead of ₹1,170.

That is the opposite of the failure mode. A target is patient. A stop is not. A system that only ever exits on targets has not demonstrated anything about its stops, and I now have exactly one data point on this instrument where the stop was required, and it is a loss.

Two Sensex trades. Two exits. Neither of them tested the thing that is actually broken.

The arithmetic that should bother me

Risking ₹3,494 to make ₹2,506 gross is already a negative nominal risk-reward, which is normal for condors and fine as long as the win rate is high enough. But I am not holding for max profit — I am taking 50% and leaving. So the real trade is risking ₹3,494 to make about ₹1,170.

Breakeven win rate on that: 3,494 ÷ (3,494 + 1,170) = 75%.

Three out of four, forever, just to stand still.

The standard answer is that you never actually take max loss because the stop truncates it long before the wing is breached. That answer is available to people whose stops work. Mine has a documented failure on this exact instrument, eleven days ago, on a gap that opened straight through where the stop lived. Until the stop is mechanical, the honest denominator in that calculation is ₹3,494, and the honest required win rate is 75%.

I do not think I win 3 in 4. I have no evidence either way yet, which is its own answer.

The accidental part

Worth flagging, because I nearly gave myself credit for it: this trade closed on the 15th, a day before the 16th expiry, and therefore never went anywhere near final-session gamma or the margin escalation that forced my hand on the BankNifty monthly this morning.

I did not plan that. The 50% target happened to fire on the 15th. If the index had drifted more slowly the target would not have been hit until the 16th, and I would have been holding a four-legged position into expiry day with no rule at all about what to do there — the exact gap I wrote up a few hours ago on the other post.

Same missing rule, different instrument, and this time it simply did not come up. Two posts in one day where the system got away with a hole in it is not a pattern I want to establish.

What I am fixing before the next one

1. Make the stop mechanical. Resting stop-limit orders on the two spreads, placed at entry, not computed under pressure. This is the only item on the list that has already cost me real money and it has now survived two full trades without being addressed.
2. Write the expiry-day rule. Weekly or monthly, the position comes off before the final session unless there is a written reason not to. Both today's posts hit this from different angles.
3. Log the fill, not the trigger. Already doing it here; making it standard. The 1.5 points was harmless. On a stressed exit it will not be, and I want the slippage series to exist before I need it.

Where the journal stands

Five trades, nothing open, up ₹1,370. Every rupee of that came from the two weeks in which nothing happened, and every rupee of the drawdown came from the single afternoon in which something did. I would rather the ledger were flat and the stop worked.

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.