July Expiry contracts closed yesterday.
NIFTY and SENSEX both made all time high.
The high point of the day was 11185.85.
What to make of it I am not sure. On such a day also NIFTY had 26 stocks advancing to 24 declining. Almost equal number. This is not a great news about everything being fine. Probably the laggards will pick up and market will keep on moving up. Or nothing may happen and we may see what happened after January 2018 high.
We shall know as the time moves on.
We had 15 trades in July Expiry. All of them were PUTS.
Out of the 15 trades only 5 were right as far as taking profit is concerned. With only 5 trades right we ended up with a small profit of Rs. 42828.
In fact many of the readers have booked much higher profit by exiting at prices higher than those shown here.
To end the month profitably with 15 PUT BUYING trades and 10 of those going wrong in a month when NIFTY went up from 10589.10 to 11167.30 is no small task. And we know that on July 10, 2018 we were looking at a loss figure of (-) 42000.
August Series Begins :
We have seen that judicious trades in Option Buying can make profit. This was seen in May, June and July ( in July even against the general market trend ).
In August series let us try something more difficult. Let us explore what is possible. We may end up wrong and take the loss. If we succeed in this attempt it will be a success to celebrate. After all nothing is gained by not trying.
This month I will be posting both CALL BUYER trades and PUT BUYER trades.
We shall start with 1 traded for both traders , add more trades subsequently as the month proceeds and try not to have more than 15 trades in the month for both the traders.
Starting today we shall have 25 days of trading with holidays on August 15 and 22, 2018.
The Day 01 of 25 is already here.
PUT BUYER :
TATAMOTORS is weak since last 6 months.
Closed yesterday at Rs. 258.25. Still trading very near to 52 week low of Rs. 247.30.
If the market corrects a little bit, this stock should be going down below this mark.
PUT 240 at Rs. 5.40-5.80 can be a good trade.
CALL BUYER :
YESBANK closed at Rs. 367.45. Only a week ago it was at 52 week high. Yesterday too it recovered from the low very smartly. If the current uptrend in the market continues, the stock can make new high.
CALL 400 at Rs. 5.40-5.80 levels can turn out well.
Let us see how the market moves.
A trader has to take a risk while looking for the rewards. We begin the month with these two trades.
Let us see who is successful — The PUT BUYER or the CALL BUYER.
Please share your views through comments.
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.
Comments
Ross July 27, 2018 at 8:56 am
When you said 15 trades for both PUT and CALL, did you mean we will have around 30 trades this month at max?
Replyadmin July 27, 2018 at 10:17 am
We shall look for one trade a day. Sometime we may not get that too. My point is that there may be about 15 trades in 25 trading days.
ReplyCalls or Puts are both tools of the trade. Let us find out how it works out.
Ashish Agrawal July 27, 2018 at 9:31 am
Sir,
ReplyLooking forward for a productive and profitable August series. When you say you will have not more than 15 trades, do you mean 15 trades each for call buyer and put buyer or a total of 15 trades combined?
admin July 27, 2018 at 10:19 am
It is an exercise of selection process. Market exists for both type of traders– the bulls and bears.
ReplyWe will see how it works out.
RK July 27, 2018 at 9:57 am
Hello Sir,
Was able to take TataMotor at 5.4 , 240 PUT … I am a bear rather than a bull…so might go for PUTs
Question: Are you going to suggest Put-call combination of trades for each group of buyers or how?
Replyadmin July 27, 2018 at 10:21 am
I have already named them PUT BUYER and CALL BUYER.
ReplyTake your pick.
Aim is to be profitable by either trading method.
Cheers.
Mahesh July 27, 2018 at 10:32 am
Brought yes bank @ 4.2.
ReplyHarigovind J July 27, 2018 at 10:38 am
Sir
By take a side, did you mean that if one believes more in the bear side of the market, I should go for the PUTS and vice versa or does it simply mean that we are trying to go for buying both the CALLS and PUTS which may seem profitable?
Replyadmin July 27, 2018 at 11:38 am
Thanks for the comment.
There are some traders who are always positive and few are bearish as well. One can take the trades according to own temperament. Last month even with all the PUTS we could get profit in a rising market. This time it is a test for me to perform on both sides.
Cheers.
ReplyHarigovind J July 27, 2018 at 12:18 pm
Really appreciate the reply, Sir.
Just like you have replied, even I would like to test and understand my own temperament because I have never identified myself as being always positive or always negative even though PUTS work better.
ReplyFor August series, even I would like to join with you on your test in both the sides. And hoping to learn much more with your motto of Trade Cautiously and Profitably.
Chaitanya July 27, 2018 at 11:22 am
Hi Sir,
ReplyCan we take both Yesbank and Tatamotors?
admin July 27, 2018 at 11:40 am
Dear Chaitanya,
My job is to identify the potential trades based on a selection process. Taking the trades is left to individuals.
Cheers.
ReplyAnam July 27, 2018 at 12:01 pm
Sir,
i have taken the YES BANK call @ 4.4 . Am not taking the Tata motors PUT as i feel it has a strong support at 250 level . Interglobe Aviation INDIGO 950 PE , please let me know your comments.although the risk is high as the traded quanity is 600 and its trading @30 levels , so the amount comes to 18-20 k . But wanted to know if the selection is good.
Replyadmin July 27, 2018 at 12:28 pm
INDIGO PUT 950 has a chance of doing well if the Crude Oil price shows an up move. Aviation is mostly a good sector for buying PUTS.
Cheers.
ReplyJayesh July 27, 2018 at 12:48 pm
You’re our guru who taught us complicated option trading in a simple and practical manner. First of all, I wish you a very happy Guru Purnima sir.
secondly , this idea is good we would be able to track both long and short. I wish both bulls and bears able to make money in the end irrespective of nifty where moves.
ReplyAbhinav July 27, 2018 at 12:53 pm
Sir,
BPCL, TechM, DRReddy showing weakness in this rising market. Can these be some ideas for put selling candidates?
Replyadmin July 27, 2018 at 12:59 pm
Good. That is the way to look at the data.
I may have some of these as my selections in next few days. All the trades should not be taken just on the first day of the month.
Cheers.
ReplyDev July 28, 2018 at 1:32 pm
BPCL and TechM rised with the nifty on friday (also techM is nowhere near it’s 52week low so doesn’t confirm weekness).
ReplyOn the other side DRReddy and UPL can be considered more strong candidate for PUT as per current data which didn’t move even after 100 point up move in nifty and against their sectorial indices ,also a big move is enough and they will be on 52weak low. Am I doing it right sir!
basavesh July 27, 2018 at 8:34 pm
When I’m looking to make profit only on the basis of premium without waiting till the option’s expiry, In that case, does it matter if I choose to buy/sell option in CALL or PUTS or it does not matter? Sorry for basic question. I’m a newbie
ReplySrinivas Bale July 27, 2018 at 10:36 pm
Sir
Replyi am following you on quora from the last one year. you are a great teacher to traders.
thank you
Mahesh July 27, 2018 at 11:07 pm
Sir, tvs motors stock is bearish.. I guess put can be taken..
ReplyDivyank July 29, 2018 at 10:51 am
“There is no bull nor bear direction, there is right direction”
ReplyI think this month exercise can further strengthen this statement.:)