In the market language, Friday was a flat kind of day with positive bias.
NIFTY ended up gaining few points after the big fall a day earlier.
Looking beyond the numbers, we find that there were 20 gainers, 29 losers and 1 unchanged stocks in the NIFTY 50 for the day. The gain in NIFTY does not mean that every stock is doing well. There are stocks which have made 52 week lows multiple times while NIFTY has been on the up move since last one year.
That is why we can not take the trades just based on general market direction.
On Friday, we could add IDEA PUT 13 to our list of trades for this month at Rs. 0.40. Let us see how this trade works out from here on.
Friday was a mixed kind of day for our trades which finally ended well and we are seeing some green now.
With SGX NIFTY showing positive open and Asia Markets soundly in the green, we may be in for an up move today as far as Indices are concerned. That is always a tricky situation for the PUT trades but we live with these moves. Who said life of an option buyer was simple?
Some of the stocks are having their own downward momentum like BIOCON. We hope it continues that way along with few others.
Trades for the day :
The best thing to do would be to sit out for the day.
But since when traders do what is best for them? They are always looking for an opportunity to test the troubled waters and burn their fingers.
Option Trades ( Buying ) ensures that the burn wounds are not very severe and can be managed.
In my post yesterday, I had described the Trade Selection Process in detail.
As per that process, DRREDDY PUT 2500 was worked out as a trade.
Closing price for this Option was Rs. 40 on Friday. With the likely positive open, we may see the stock price going higher initially before it resumes its previous trend.
We shall look forward to DRREDDY PUT 2500 in the price range Rs. 32-35.
There is no need to run after the trade. We shall try to get it around Rs. 32 and in case the stock price starts going down, may go up to Rs. 35.
Lot Size 250, Maximum Risk Rs. 8750.
No regrets if the trade is not taken.
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.