As the expiry day on July 25 approaches, it becomes more difficult to trade. The biggest decision being how to handle the trades which are showing a good profit currently.
This is what NIFTY did yesterday.
A fall of 73 points continued from the big fall on Friday should have worked wonders for us. It did not. On the contrary, we were finding it difficult to manage our profitable trades.
It was a real tough day hen everything went right and then wrong.
The day was negative as far as NIFTY and other indices are considered. For our PUT trades, nothing worked.
YESBANK was up 9.49%. RELIANCE was up 2.33%. BIOCON which had shown the dreams of a good profit on Friday, moved up 2.56% and put paid to our PUT. It was same with every trade be it MARUTI or HEROMOTOCO or SUNPHARMA or TATASTEEL.
All of them showed a good profit at one stage and then went wrong on us.
Remember what I had written here yesterday:
“Out of the above trades , ZEEL, YESBANK, HINDPETRO, TATASTEEL and BIOCON will have to be exited today due to the stupidly implemented policy of physical settlement of F&O Contracts.
What can not be cured must be endured.
We do what is required to be done. Most of the brokers will square off the trades if we do not do it ourselves. It is preferable that we do it.”
I know that many readers might have waited for better prices but we had a deadline whether we like it or not.
The trades were closed accordingly. Not at the best price of the day but not at the worst either.
Another point made yesterday was:
“MARUTI PUT 6300 is deep in the money now and volumes are becoming low. We exit this trade and move to PUT 5800.
HEROMOTOCO PUT 2500 can be exited after seeing the initial trend for a while and PUT 2350 can be bought to stay in the trade.
Similarly for GAIL. We exit PUT 142.5 and move to PUT 137.5.”
All these actions were taken.
Otherwise, the loss would have been bigger.
With all the above care taken, we still saw RELIANCE PUT 1240 move to a high of Rs. 27.50 and then move to Rs. 3.15 at the close. A big opportunity missed.
Likewise, TITAN PUT 1060 went up to Rs. 14.50 and then came down to Rs. 5.10.
These things are normal for an option buyer but we need to do what is essential that is protecting the profits in good trades.
With all those trades closed, even SUNPHARMA PUT 380 was closed as it looked too far away for a positive outcome, we are down by about Rs. 12000 from Friday. And this happened on a losing day for NIFTY.
We take our beatings and lessons from the market and move on.
Position of trades:
The active trades now are— MARUTI PUT 5800, HEROMOTOCO PUT 2350, TITAN PUT 1060, RELIANCE PUT 1240 and GAIL PUT 137.5.
The readers who missed the exits in MARUTI, HEROMOTOCO and GAIL yesterday can do the same today.
New Trades :
There was some problem with the server in the morning. Whatever was suggested/discussed at that time is not relevant now.
We can go for SBIN PUT 245 @ Rs. 1.90-2.10 ( current price ). Trade can work out very well if the stock moves down by 3-4% over these three days left to expiry.
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.