HALF TRUE

Overnight 40-delta short strangle backtest: does it work after costs?

We coded the overnight 40-delta short strangle strategy exactly as taught in a public video and ran it on NIFTY weekly, 2017-02 to 2026-10, with real charges. Claimed ₹2.09 L. Reality ₹1.70 L. As taught, the rules made about ₹2.46 lakh per lot from Feb-2017 to Oct-2026, but only about ₹13k since the expiry day changed in Sep-2025.

Net after costs: ₹2.46 L
Win rate: 70.6%
Worst drawdown: −₹61,688
Reality Score: 79/100

The rules, as taught

Two trading days before weekly expiry at about 15:28, sell a call and put near 40 delta and buy them back the next day at the same time, with a stop only if the combined premium triples. Naked, no target. Assumptions: 'Tuesday' read as two trading days before expiry, delta from implied volatility, overnight stop hits filled at the 09:18 open.

What the video claims, and what we found

Claim: About ₹2.09 lakh over May-2018 to May-2023 with 70% winners (≈93% on ₹2.24 lakh).

For the video's 5-year window we got ₹1.92 lakh before costs (₹1.70 lakh after) with a 73% win rate, close to the claimed ₹2.09 lakh; the video's final year (+₹34k) did not reproduce (about −₹3.5k after costs).

See the full results, charts and every trade

Questions people ask

Does the Overnight 40-delta short strangle strategy work?

Partly. As taught, the rules made about ₹2.46 lakh per lot from Feb-2017 to Oct-2026, but only about ₹13k since the expiry day changed in Sep-2025. Tested on NIFTY weekly, 2017-02 to 2026-10, after real costs. Reality Score 79/100.

What is the win rate of the Overnight 40-delta short strangle strategy after costs?

70.6% of trades made money after real charges in our test (2017-02 to 2026-10). A high or low win rate alone says little; the net result was ₹2.46 L with a worst drawdown of −₹61,688.

How much did it make or lose in the backtest?

Claimed ₹2.09 L. Reality ₹1.70 L. Over 2017-02 to 2026-10 (1 lot (historical lot sizes)), the net after charges was ₹2.46 L and the worst fall from a peak was −₹61,688.

What exact rules were tested?

How was the Overnight 40-delta short strangle backtest done?

On 1-minute exchange data since 2017, signals filled at the next minute's open, with real broker charges, STT, exchange fees, SEBI fee, stamp duty and GST, and the lot size of each date. Rules exactly as taught; gaps we had to fill are stated. Full method on our How we test page.

Run it yourself — coming soon

These rules use features our public backtester can't express exactly yet, so we won't pre-fill an approximation. Build your own idea in the meantime.

Related strategy backtests

Get the next 5 fact checks first

One short note when new results are out. No spam, no tips, nothing to buy.

Important

These are educational backtests of publicly taught rules, not investment advice or a recommendation to trade. Algrow is not registered with SEBI as an investment adviser or research analyst. Past results, real or simulated, do not predict future results; option trading can lose more than the premium or margin used.

Method: 1-minute historical exchange data; signals filled at the next minute's open unless the rules say otherwise; real broker charges, STT, exchange fees, stamp duty and GST; lot size as on each trade date. Where a video leaves a rule open, the assumption we made is stated. We test only the rules as presented and paraphrase the claim; watch the video for the creator's full explanation. Full method: how we test.

Creators can request a review or correction: write to [email protected] with the page link and what you believe is wrong. We will re-run the test and update the page.