We begin the February Series today.
Apparently today is the big day — the Union Budget Presentation.
In my view the hype and hoopla surrounding the event is unnecessary and just a waste of time and energy. It is just like a new year party where high on booze we welcome the new year only to find next morning that all the problems of previous year are still there.
Nothing is going to change by the budget . 90 % of traders will still keep losing money . 80% of options will keep expiring worthless . Life of any trader or option buyer is not going to change.
Let us focus on what we do.
Nifty had closed at 10858 in November Expiry and 10779 in December .
Yesterday it was 10830. In two months market has gone nowhere. There was a lot of volatility but the end result was nothing. We made money is another matter.
Similarly the budget event may give some volatile moves today and on Monday but after that we shall be back to the mundane business of day to day trading.
The best thing would be to avoid trading for the day. But trading on such a day is like a ritual. Why miss the opportunity of losing money on a volatile day? Most of the traders lose money and still keep trading. That is life. Let us move on.
Trades for the Day :
ZEEL was in lot of trouble few days back. The stock has since recovered as was likely but it is nobody’s case that those problems have gone away.
The stock options have a very high Implied Volatility. So the premiums are high.
We go for PUT 340 @ Rs. 10-11. Lot Size 1300 Max Risk Rs. 14300.
M&M is another stock with continued weakness . It made the 52 week low at Rs. 661.60 on January 29, 2019. For some reasons it came down and those reasons are not going away in a hurry.
We shall go for PUT 660 @ Rs. 12-13. Lot Size 1000 Max Risk Rs. 13000.
GRASIM is in a continued fall for last few months. We expect this trend to continue.
PUT 700 @ Rs. 16-17 can work out well. Lot Size 750. Max Risk 12750.
On a day with hope and hype we are going with three PUTS. We may see a setback but when contrarian bets work out, they work out very well. And these are not contrarian selections, these are as per their individual trend.
We have 20 trading days in this Expiry and as usual expect to do well.
January Expiry had ended in a profit of Rs. 178000.
For review of January Expiry please read here:
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.