When the Option Buying Series was started on this blog from May 2018 series, we had the following market wisdom to contend with:
Almost 80% of options expire worthless.
Option Buyers never make money as the time is always against them.
We know and understand the difficulties of options trading. There is some truth in the above sayings but such statements are never absolute truth.
It is our duty as traders to find the ways to become profitable.
The journey began.
We saw ups and downs but emerged profitable at the end of one year period.
The position after 12 months was:
Total Trades — 156
Wrong Trades — 99
Right Trades —– 57
Losing Months — 05
Gaining Months — 07
Profit ——– Rs. 649323
For details, please click the link below:
May 2019 to July 2019 :
Our number of trades increased marginally in these three months.
It was mainly due to introduction of a new series of low cost options– Rs. 2000 Options.
Those trades have also contributed to the profit.
May 2019 :
5 Right trades out of 17 gave us a small profit of Rs. 17485.
This was the month when the markets zoomed after the elections and we had 16 PUTS and 1 CALL.
June 2019 :
June was a mixed sort of month where we saw fluctuating fortunes throughout the month and somehow managed to escape getting into a loss. It was the Rs. 2000 Options which made the month profitable.
But who are we to complain about where the profits come from?
Unfortunately, the profit/loss chart for that day are gone missing during the revision of the appearance of this website.
Somehow the data was saved in a Quora answer. So got it back from there.
Main trades did not give a great profit. Any profit is a good profit.
The bigger contribution to profits came from Rs. 2000 Options.
The net position in June 2019 was:
Total Trades — 21
Wrong ———– 13
Right ————- 08
Profit ———– Rs. 42125
July 2019 :
The market went up initially on budget hopes. It went down after the budget. Recovered from there and then gave up in the last week. For us it was a roller coaster ride.
We were in a minor loss entering the budget day. One day after the event we were looking at a profit of Rs. 71000. Then we saw the impact of time and price and notional profit plummeting every day.
Then it turned again into a loss of Rs. 23000.
Thanks to the market moves in the expiry week, we ended up profitable for the month.
Like one reader commented it was not a great month. It was not a bad month either.
Rs. 2000 Series:
After a long time, we had more right trades than the wrong ones the ratio being 15:12.
Total profit for the month was Rs. 94879.
Summary of 15 Months:
One day leads to another. Every trade is a step in the journey. Some steps are sure footed, some are tentative but each step is taken for moving forward in this exciting journey where the path is full of twists and turns and we never know what lies ahead.
For moving forward, we learn from what we have been doing so far. Do more of the right things and avoid doing what we know was wrong.
The numbers so far:
Total Months — 15
Losing Months — 05
Gaining Months — 10
Total Trades — 221
Wrong Trades — 136
Right Trades — 85 ( 38.4%)
Profit —- Rs. 803812.
To Summarize :
Numbers tell the story.
In our case, worthless options are far less than 80%.
There is a profit of Rs. 800000 on a trading capital of Rs. 200000.
I agree that there is some luck involved but luck also would not help without taking the trades. We got lucky because we were in the trades.
We shall continue the journey with the same belief and methods. It is a simple principle — What worked in the past, should work in the future.
We just take the journey one step at a time. Keep putting one foot ahead of the other foot and soon you will realize that you have traveled many miles.
Let the journey beyond this point also be profitable for all the readers.
Enjoy the Sunday.
Be back tomorrow for the trading week beginning.