Vix has fallen from 30% in Aug from 25.1 to 18.3 - How to choose IC strike price

In the beginning of the month on 2nd august - i did the analysis on the high risk width IC strategy and found selling call & put ~ 10% away from strike and taking hedge 500 points further away will give ROI of 4 to 5% find below the chart- return is 4.28%

Tday 29th Aug if i analyse the same setup for september trade - the ROI is for 500 RW is 1.57 % the ROI has decreased from 4.8% to 1.57% - this is because of fall in VIX from 25.1 to 18.3 

Find below the Sep IC month chart 

This brings the question to our earlier analysis of monthly movement of nifty for the last 5 years purely based on points movement. The analysis has to be done with respect to VIX as well.

Having said that is IC is not worth taking on low vix environment- not really. the strike price has to be chosen based on prevailing VIX. which means during higher vix the spread of the trade can be higher and during lower vix spread of the trade can be narrower. What is the formula to find the risk free or minimum risk spread with with respect to VIX. This need to be found out. However for now, we can decide on the strike price spread based on the ROI and short straddle premium (to find nifty range)

First find the range based on short straddle on the first friday after prev month expiry- keep adding spread points on both sides and 500 RW hedge position and find strike price where u get 4 to 5 % return. 

At the current sitaution on 9 Aug where Nifty spot at 11647 the short straddle combined premium is 430 @ 11600 strike price is 420 (11600 CE - 250 and 11600 PE - 170). The suggested range is 11180 (11600-420) and  12020 (11600+420) = hence the range is 11200 to 12100. Based on ROI analysis taking the trade at 11000 and 12300 -> 200 points away on each side gives us ROI of 5.18%

See below the chart 

I have taken the trade at 10800 to 12200 earlier - hence im continuing with that. Short strangle 16 lots - margin consumption is 25 lakhs which gives ROI is 2.8% which is very less. Hence i need to take hedge at 10300 PE and 12700 CE to reduce margin requirement and increase ROI (5.1% if margin per lot is 60K @ 500 RW)and take more lots.this is going to release margin for my short straddle trade of PR sundar. 

Let us see how this month goes. Laying my full trust on PR sundar on short straddle which i have taken at 10500 CE and PE for a combined premium of Rs 451 when the nifty was at 10450 now the nifty has moved to 10650, the short straddle is at same combined premium time decay compensating for nifty movement. Any further big move upside from here will lead to adjustment trade- depending on PR sundar on that. Let us see how this trade goes.