Friday added further misery to our trades.
NIFTY ended up higher by 46 points in the same manner which has become normal now. everything happens in the last part of the trading day.
Our solitary CALL trade in INDUSINDBK did not get any benefit because of this upward move. And all the PUT trades lost a little more.
With just 7 days left to expiry, we are not in a good place right now.
We need at least 2-3 of our trades to go right from here to salvage the situation. With 7 more days to go ( this week we have two holidays on April 17 and 19) many things can happen.
Over last one week we saw market going up and down finally not going anywhere. This kind of trend is bad for option buyers. It keeps eating away the premium but keeps us hoping as well. We see the carrot but get the stick most of the time.
It does not matter whether you bought PUTS or CALLS. Market knows how to make both type of trades get into trouble.
Readers will recall the trades by one of the readers Mr. YOGI who had vehemently proposed buying of some CALLS and posted this comment.
We had reviewed last week and seen that 2 CALLS out of 6 were right and 4 were wrong.
Another week has gone and the current position is:
All the 6 are wrong presently.
The purpose is not to criticize. It is just to bring out the fact that it does not matter whatever you do, market can prove you wrong.
Our trades are not in good position, but the person who took quite the opposite view aggressively is also not in good position. Market is a great leveler and teacher. Let us learn the lessons in humility and not be aggressive.
New Trades for the Day :
BHARATFORG is one auto ancillary stock which has not done well over last 30 days and 7 days. That makes it a candidate for buying a PUT. Current price is around Rs. 492. PUT 470@ Rs. 2.80-3.20 can work out if stock price moves around 5% from here.
Implied Volatility around 30 is okay but lack of volumes is a concern. Only 57 contracts were traded on Friday.
I am taking this trade by ignoring the volume parameter. Let us see how it goes.
Lot Size 1200, Maximum Risk — Rs. 3840.
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.