Today is Friday prior to the expiry week of October series.
Options of next series will start becoming active now while the time value of current month options has reduced. The new trades in the series will be for November expiry.
Before that let us close the October journey.
Yesterday it was planned to close the trades in RELIANCE CALL spreads if a profit of Rs. 6500 was seen. Market obliged and we could do slightly better.
With this trade, we close the October 2020 series.
12 sets of trades were taken in October series and all the 12 delivered a profit.
Profit from these 12 sets of trades was Rs. 50576.
Including 3 out of 3 successful trades of September series, the score so far is 15 out of 15 and total profit is Rs. 64124.
The maximum margin utilized at any point of time was Rs. 370000 ( INFY trades in September series ). The return on the risk capital has been very good over this period.
Well, the past is past and we move on to November Series.
BANKNIFTY has been very strong in comparison with NIFTY over last 30 days. We go for a PUT spread in BANKNIFTY NOV 26 options.
Buy PUT 24500 @ Rs. 1050
Sell PUT 24000 @ Rs. 820
Sell PUT 23000 @ Rs. 495
Net credit — Rs. 265 x 25 = Rs. 6625
The set up is profitable till BANKNIFTY going lower up to 22500.
If it stays above 24500 there is no cause of concern.
Second set of trades is with ITC.
This stock gave us profit on 3 occasions in October series. We try it once again.
The stock is weak. We go for a CALL spread.
Buy ITC CALL 170 — Rs. 6.75
Sell ITC CALL 175 —- Rs. 4.75
Sell ITC CALL 180 —– Rs. 3.35
Net credit —- 1.35 x 3200 = Rs. 4320
The set up is safe till the stock price moves to Rs. 185.
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.