Options Once Again — Options Once Again — Day 11

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Yesterday was Day 9 of continued declines.

The market continues to reel under the impact of US China tariff war and the traders are left to rue their losses.

Last night NASDAQ declined more than 3%.  Dow Jones Index lost about 2.38% and Asia Markets are again in the red this morning.

Market observers are looking for a bounce back after continued fall of 9 days but the international trends do not offer any hope. Let us see how the day pans out.

Yesterday after the early flat market, our trades started to do well.

MOTHERSUMI and CADILAHC made new 52 week lows.

SUNPHARMA is caught in a case of collusion for price fixing in US and the stock moved down sharply to Rs. 344 levels before recovering to close near Rs. 400. PUT 430 traded for a high of Rs. 84.20 but came back to near Rs. 28 level by end of day.

This stock needs to be watched seriously as another down move is not ruled out.

Other trades too did well and with the exception of BHARTIARTL all have turned profitable.

The status as of yesterday close:

Again it is example of what can happen in options in just one day.

Let us expect more from this level.

Trades for the day :

It is very tempting to get carried away in such situations.

Let us not do that.

We are in 8 trades and let us stay with them.

If we see a big down move in any of the Pharma stocks i.e. SUNPHARMA or CADILAHC, we should be moving to a lower strike after booking some profit. That decision is to be taken if we see levels of Rs. 370 in SUNPHARMA and Rs. 260 in CADILAHC.

Stay calm and cool whether trades are doing well or otherwise.

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.


  • Praveen

    SBIN 290PE@5.6 LTP@4.25 Profit/Loss: -4050. Open

    ZEEL 390PE@13.05 SellPrice@60 Profit/Loss: 61035. Closed
    HINDPETRO 260PE@4.4 SellPrice@5 Profit/Loss: 1260. Closed
    Maruti 6800CE@191 SellPrice@184 Profit/Loss: -525 Closed
    IOC 150PE@3 SellPrice@7 Profit/Loss: 14000 Closed
    YESBANK 160PE@9 SellPrice@14 Profit/Loss: 8750 Closed
    INFY 720PE@12.05 LTP@25 Profit/Loss: 15540 Closed

    Infy closed at 25 today
    No new trades
    Current Capital Deployed 16,800(Excluding closed ones) P/L: 96,010

  • Thiru

    OK. Now I have hit my weak point in my trading. I thought I will take a disciplined approach to my trading and will do everything possible to protect my trading capital. As I wrote before I was not comfortable with the position I have taken up with BPCL. Eventhough I have realised and wanted to stay away from that counter as I did not have conviction in my trade. What did I do? I took BPCL 390 PE @ 7, 2 lots and again 1 Lot @ 5.40. (Only because it is at the same price as that of 410 PE when I entered the trade). Once I lost my mind around it, I continued trading. Sold Infy 710 PE @ 16.15 and took position with Airtel PE 310 and PE 300 (Even though I already have positions in them. I have traded them profitably in the last couple of days but now I feel like trapped) Atleast in Airtel trade I’m convinced that SP will move lower (just don’t know when, but I am convinced the price reaching around 220 level in the next 3 months). So now I have all my capital locked into Airtel PE options and BPCL CE options and small positions in Tata Motors 170 PE and Tata Steel PE. Talk about over trading, I can certainly be recommended for an award. What should I do now? Will wait it out patiently, while trying to unwind the positions at appropriate prices if and when an opportunity presents itself.
    (Overall my position shows as Realised Profits = Unrealised Losses). From tomorrow onwards I will find out whether I have taken any right position or not)
    Just writing this out makes me feel better. Thank you sir for having this forum.
    (Just for people to see, I’m posting this under both dates 6/5/19 and 14/5/19)

  • Barda Prasad

    Dear Thiru, thanks for sharing and I must appreciate you for posting it. Let me confess, we all ( all retail traders) go through this situation of over trading. Trading with a method which sir has taught is good way to trade. we already know the losses but i must admit that staying with losses is not a good feeling and we end up over trading only to get in to more losses. staying calm will help.

  • Azar Shaikh

    Dear Thiru Only trade with one lot.While entering trade convey yourself that this my Max loss.Dnt do average and have patience

  • Badrinath

    Hi Friends,

    can any one tell me how we need to choose the strike price for Nifty and Bank nifty as per Pramod sir class.


  • Thiru

    Thanks for your kind words everyone. Maybe god heard your wishes and showed me mercy. I was able to unwind some of my positions worth 66K. My unrealised losses have come down today to the tune of 13k (it was 48k yesterday, with all the capital locked in all possible positions). Now if I managed to unwind rest of my positions without incurring much loss, I’ll be able to get my capital back. May be I should get greedy and look for some profit:-). Again as Sir used to write ‘What difference one day can make in the market?’. So for the rest of the month, it is about unwinding the positions for me, with the aim to recover the capital.
    Still need to find my niche…
    All your kind words are highly appreciated.

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