Finally the April F&O Contracts Expiry day is here.
For NIFTY it has been a good upward journey. It had closed at 10113.70 on March 28, 2018 ( March Expiry ) and closed at 10570.55 today.
What happens today is yet to be seen. I anticipate a mildly volatile day like yesterday.
Let us review our suggested Expiry Week Options Trades:
BHARTI AIRTEL :
Market was expecting very bad numbers. Company reported only bad numbers. We live in a funny world. With the numbers being bad the stock was the biggest gainer for the day although it gave up from the high of the day.
PUT 390 ended up at Rs. 0.20. Let us say it has become worthless.
One could have exited yesterday quite profitably yesterday. If someone has done let us say well done , otherwise it is a loss of maximum Rs. 5440.
RELIANCE CAPITAL :
The stock price went up today. Generally it moves with the trend but off days happen.
With 400 PUT strike still a good 6-7% away, there is Rs. 0.60 value left in the PUT.
Can it go below 400 level yesterday?
Many times this stock has lost or gained more than 10% in a day. Will tomorrow be such a day?
We do not know that. But we surely know that even if the price moves to 450-460 levels, our loss is fixed at Rs. 1500.
Let us count this out unless an exceptional down move happens just for us.
TATA MOTORS :
This stock has been coming down few points every day. Which makes it difficult for the Option Buyer.
I had mentioned 330 PUT at a price of Rs. 2.00.
It closed at Rs. 3.20 after having moved to Rs. 3.75 at one stage.
One stays with the profitable trades.
The stock is within sighting distance of 52 week low and make go there once again. The trouble is it must happen today.
Let us not count our chickens before they hatch and leave it to the market.
By far the best trade among the 4 suggested on Monday, April 23.
The low point of the stock was Rs. 288.20. The best price for the 300 PUT was the Last Traded Price at Rs. 11.50.
This was suggested at Rs. 1.75 on Monday.
Exit at Rs. 7.00 ( 4 times the price paid ) was also suggested.
But there are some readers like Chirag Patel who has mentioned in the Comments that he would stay with all the trades.
In that case, whatever is lost in BHARTI is made up by VEDL.
Where can it go from here?
I do not know.
We bought the PUT with expectation that it will go down. It has gone some distance and I will be happy it goes a bit further.
Keep hoping for the best but be ready for the worst.
If you bought at Rs. 1.70 and are still in the trade at Rs. 11.50 hoping to see it go to Rs. 20 at expiryning, you have every right to dream. It is a dream which can come true.
But what happens if the price of VEDL moves to Rs. 300.
Rs. 11.50 becomes a big fat ZERO.
Dream becomes a nightmare.
BUY a 290 CALL at around Rs. 2.00 or a bit lower.
Now your expenditure is Rs. 2.00 + Rs. 1.70 ( Rs. 3.70 )
Minimum you will get is Rs. 10.00 if VEDL ends up between Rs. 290 and Rs. 300.
More profit will come if it goes below 290 or above 300.
Minimum profit of 10.00 – 3.70 = Rs. 6.30 is assured which is certainly better than ZERO mentioned earlier.
If VEDL opens around 285 in the morning, instead of 290 CALL buy 280 CALL .
It should work.
The status would look like this if one had not exited from VEDL earlier.
If VEDL was exited earlier at Rs. 7.00, then it would be like this:
This was added to the list on Wednesday morning. At one stage I was happy that my suggested price was not there at all. Suddenly the stock price moved up and Rs. 1.65, 1.60. 1.50 were all there.
Generally such trades do not work out. Reversals do not happen repeatedly just to help poor Option Buyers like us.
But it happened and the 340 PUT closed at Rs. 2.80 after seeing Rs. 3.60 a little earlier.
Like TATA MOTORS, this stock also is a little away from it 52 week low of Rs. 232.35.
A good down move can take it there and little below that today.
Same trouble again. It must happen today.
Otherwise our Rs. 1.65 ( Rs 4950 ) become worthless if the SBIN price goes above 340.
Use your judgement and discretion about the appropriate exit.
Expiry Day Trading in Options requires nerves of steel specially when making money.
For losing money no skills are required.
Trade For Today :
We traders just can not stop.
This time the stock is MARUTI.
Buy 8900 PUT for around Rs. 25-30.
Maximum risk is Rs. 2250 if bought at 30 and 1875 at Rs. 25.
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.