As promised, the day was volatile.
The All Time High of 12041 did not hold for long and one by one 12000, 11900, 11800 and 11700 were breached.
Ultimately it settled 80 points below the previous day’s close.
Now that the election monkey is off our back, trading could get back to normal. There will be normal trading challenges like company results, crude oil prices, USD INR exchange rate, US China trade wars and what not, but election worries are truly over.
And with the big event out of the way India VIX crashed. With the crash in volatility options prices crashed.
There was one point yesterday when KOTAKBANK was up by Rs. 25 and CALL 1520 was down by Rs. 5.00 at same time.
We had TATASTEEL, TATAMOTORS and SUNPHARMA losing out towards the end of day but a look at the PUT price tells us that we lost money there too.
This is what a volatile event does to option prices.
It is back to basics now. Five trading days are left to expiry. I expect the stocks to move now on their inherent weakness or strength and not on hype.
We are down but not out. A lot can happen over 5 days as we have seen in the past.
This is the status at close yesterday.
I had suggested getting out of the trades which do not have even outside chance of success but were getting good price because of volatility. SBIN and BHARTIARTL were exited accordingly.
KOTAKBANK CALL 1520 gave a very good chance to exit at Rs. 43-44 but the chance was not taken and the trade has now gone into a loss.
After the down move yesterday, we may see some buying cong in today. Elections are over, not the normal market moves. There is a lot of action to come in next 5 days.
New Trades for the Day :
We stay with our tried and tested stocks.
BIOCON made 52 week low yesterday at Rs. 508.50.
That is within a handshake of 500 level.
BIOCON PUT 500 @ Rs. 6.50 – 7.00 looks to be a fine trade. A 3-4% down move over next 5 days can give very good results.
Lot size 900 Maximum Risk Rs. 6300.
VEDL was among the biggest losers yesterday. We were in PUT 150 earlier and had booked the profit before the Exit Polls.
It is time to get back into the same trade again.
VEDL PUT 150 @ Rs. 1.80-2.20 can work out well if the stock maintains its downward spiral.
Lot Size 2300 Maximum Risk Rs. 5060.
Back to normal trading.
Trade cautiously, trade profitably.
Disclaimer: This post and examples are for teaching purpose only and are not meant as advice/suggestion to trade in these stocks. Trading in Futures and Options can lead to big losses and should be done with appropriate knowledge and advice only. Mentioning the stocks here does not imply that I have a trading position or likely to take a trade in these stocks.