We closed the December Expiry trades yesterday with a loss of Rs. 47000. The month went from being very good to very bad for our trades. Overall the Index ended flat for the December Expiry month and we too landed flat on our backside for the month. Time to forget the hurt , get up and do better in January.

January contracts expire on January 31, 2019. So there is full one month ahead of us. We get 25 trading days this time. Not that we intend to stay in the trades that long but having a little extra time for the trades to work out is always better. So different from the thought that time is the number one enemy of the option buyer. We know that fact. It is just that we are focused on the right trades. Something which goes wrong does not concern us too much. We know the maximum damage it can cause.

Trades for the day :

Let us look at the gainers and losers over last 30 day period in NIFTY 50 stocks.


IBULHSGFIN tops the list of the gainers. Do we just go and buy a CALL in this stock. Easy does it. The financials specially NBFCs gained last month after the resignation of the RBI Governor and his replacement by the new incumbent. The understanding is that the borrowings by these companies will be eased now. Whether that actually happens or not is not sure but the stock prices have run up a lot. For the moment I am leaving NBFCs alone whether for right reasons or wrong.

We made one wrong decision last month in M&M PUT. ( Many wrong decisions were made, M&M was one of them)

It is giving all indications of a likely upside.

We stay with our small list of stocks most of the time, so we stay with M&M but this time with a CALL option.

Looking at the IV of the CALLS for January, we see that this is around 22-25 range. Just on this score, I am giving a miss to this trade at least for the present.

INFY CALL 700 is a good choice. Only the price of Rs. 13.00 ( on yesterday close ) is a deterrent.  But the prices are determined by the market. We can take it or leave it.

INFY CALL 700 at Rs. 12.00-13.00 is my choice for a trade today.

Losers :

In the losers list, SUNPHARMA tops the list.

It was the only stock option which gave us some money last month. Do we stay with it this time too?

It meets all the criteria for selection. Weak over 30 days and 7 days. IV of around 38 for the near strike PUTS.

We go for SUNPHARMA PUT 380 at around Rs. 6.00.

Another one that fits the bill is TATASTEEL.

TATASTEEL PUT 480 at Rs. 9.00 is my second PUT choice for the day.

These three trades for the day are enough to begin the new expiry month.

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.