January 2019— Options Buying Continued

As was expected, NIFTY closed higher yesterday.

It was up by 44.45 points. ( Forget the 0.00 in the above image, NSE site has such issues at times).

What A Miss ? :

Yesterday we had selected a trade in ASHOKLEY PUT 92.5. I had suggested a price range from Rs. 1.40-1.60 considering that the stock will open higher and we can enter at a good price. The low price for the day was Rs. 1.70 and the trade could not be entered. This is how the plans go wrong. The stock kept making new lows throughout the day even when overall trend of the market was strong. It made a new 52 week low at Rs. 93.05 and closed at Rs. 93.25.

Well, I missed this trade. It is good that the readers have become astute now and apply their mind to the trades. In the comments on yesterday’s post I got to know that one reader went for PUT 95 @ Rs. 2.50. Good for him as it moved up to Rs. 4.70 during the day. Another reader bought PUT 92.5 at a price higher than the suggested price. Again a good choice. All the best for your trades but I will not consider this trade for the profit/loss chart in these pages.

TATASTEEL went up to Rs. 501 at one stage. After that it started climbing down and finally ended in the negative for the day. That gives us a chance. Another good move on the down side and we may get another 52 week low. I surely am looking for that.

M&M did not do much for us. Only consolation is that it did not run away from us.

INFY did all the right things and kept moving higher throughout the day even when NIFTY was moving down.

SUNPHARMA moved down a bit but that was of no use to us.

Overall not a bad day for us. The position became slightly better that previous day. If only ASHOKLEY trade would have been taken things would have become much better. Such hits and misses are part of a trader’s day. Move on.

New Trades :

I have always wanted the readers to interact and share their trades and trading ideas.

Here is one sent by a reader yesterday.

Sentilnathan

Edit

Pramod ji,
BHARATFORG touched 52 w low of 470.10 today..
It seems to satisfy all our parameters..
460 Put at 7.00 – 8.00 is my choice..Lot 1200 .. Please comment when you are free.

I have analyzed this trade. It fits our selection method.

BHARATFORG PUT 460 becomes my selection for today. Lot Size is 1200, maximum risk is Rs. 9600.

SGX NIFTY is flat. Let us see how the day pans out.

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.

Comments

vishal agarwal January 8, 2019 at 9:16 am

Sir I think the below link is the most inspiring post on this blog. I would suggest place this link permanently on the top of this blog so that it reminds every one how bad things can get and how we could recover.
https://optionsnext.com/blog/august-series-was-bad-how-do-we-recover-from-here/

Sentilnathan January 8, 2019 at 9:38 am

Good suggestion.
Reply
admin January 8, 2019 at 8:53 pm

Dear Vishal,
Thanks for the kind words. I am happy that you found it useful.
Cheers.
Reply

Sentilnathan January 8, 2019 at 9:58 am

Bought BHARATFORG 460 Put at 8.05

vishal agarwal January 8, 2019 at 11:36 am

Congrats you bought at day low 🙂 Hope you exit at expiry high.
Reply
- Senthilnathan January 9, 2019 at 8:23 am
  
  Yes Vishal..I just attended the Mumbai workshop..
  influenced by the patience of Pramod Sir..
  so will be holding this one till expiry..alert to protect profit..
  Let me see what the market give me for my determined patience.
  Reply

Sentilnathan January 8, 2019 at 10:54 am

Generally we have more Puts in our trades than the calls..
One fact is “FEAR” is more stronger than “GREED” .. it favours Put buyers.
Another thing I noticed (after attending the workshop at Mumbai) is that:
Most of the cases, the calls are not passing the volume filter..
So in case of stocks with uptrend, one has to :
Buy Equity stocks (not a leveraged play..capital is locked) Or
Buy Future of the stocks (Many may not be comfortable with Futures trading..comparatively higher risk than direct stock purchase due to leverage) Or
Buy the less volume calls and hope to get out at a good price
So better to stick with all the filters designed by Pramod Sir after his personal experiences.
Thanks Pramod ji for sharing your valuable knowledge with all of us.

admin January 8, 2019 at 11:19 am

What we discussed may not work all the time. But when it works it is wonderful. On our part we have to see that we do not get out of profitable positions too early.

Will be posting another method of trading from tomorrow for readers with less patience. ( Some patience will still be required)

Cheers.
Reply
- Ravi kumar January 8, 2019 at 12:02 pm
  
  Looking forward to new method sir.. Always good to have multiple arsenal when you enter the War!
  Reply

T. Sai January 8, 2019 at 6:32 pm

eagerly waiting sir

Gourav Basu January 8, 2019 at 8:41 pm

Sir, while the method of strike selection is clear, the method of premium selection is still not clear. How do you decide the range of premium to be paid? Also, if an option is available at a moderately high premium, it only indicates that the option is moving towards the favoured direction, rather than opposite to it. The amount of money risked, also doesn’t seem to be the issue, as we have already committed 13k in one infosys trade, but refuse to commit 7-8k or more for Ashok Leyland trade

admin January 8, 2019 at 8:51 pm

Price to be paid is always subjective. We paid a big amount for Infy call as it was the first day of current expiry and full 25 days of time was available.
Now 8 days are gone and we have to lower our risks while expecting the trade to do well.
Sometimes such a missed trade will prove costly,at other times it may actually save us some money. There is always another trade to take.
And some readers have taken the trades with slightly higher premium. It is purely a personal decision.
Cheers.
Reply

Senthilnathan January 8, 2019 at 8:52 pm

Pramod ji,
HINDALCO 52 w low is at 192.35 CMP 206.50
Put 190 at 1.25 to 1.50 seems a reasonable bet. Lot size 3500 Maximum exposure at 1.50 will be Rs.5250
As already we have TATASTEEL Puts, being in the same sector this trade may be taken at the discretion of traders based on their own risk profile and capital availability.
—————————————————————————————————————————
UNIONBANK CMP 94.55
Aggressive traders and Call lovers may consider CALL 100 at 1.20 to 1.50 Lot size is 7000 Total exposure at 1.50 will be Rs.10,500
—————————————————————————————————————————
Personally I would prefer no trades and wait & watch. Please comment when you are free

admin January 8, 2019 at 9:00 pm

I have very good memory of HINDALCO 52 week low. A day before this low, I had exited PUT 210 at Rs. 14.70 ( Bought at Rs. 2.10 ). Next day, the low happened. It fits the criteria and the problem is same– we are already into a trade in the same sector. If the sector continues weak ( it did not do that today) both trades will come good.

I have not studied UNIONBANK.

Cheers.
Reply
- Senthilnathan January 8, 2019 at 9:22 pm
  
  Thanks for your comments..
  As others I am also eagerly waiting for your another method of trading.
  Reply
- Senthilnathan January 8, 2019 at 10:05 pm
  
  Honestly, I am also not familiar with UNIONBANK..
  When I applied all our selection parameters, got this one..
  Otherwise. generally I am not comfortable with PSU banks.
  Reply

Yogesh January 8, 2019 at 9:11 pm

Sir, what can be done with sunpharma..? Should we exit it. I had sunpharma 400 pe at 3.3.. I also have techm 640 pe at 4.5 and hcltech 900 pe at 12..Also sir, do you have any plans for giving a training session at indore.?

Hrishikesh Raskar January 8, 2019 at 11:31 pm

When will be there session in delhi Sir?

admin January 9, 2019 at 8:08 am

Dear Hrishikesh,

Probably you did not see the post on top of the page. Session at Delhi is scheduled for February 03, 2019. ( Sunday ).

Please confirm your participation at the earliest.

Thanks.
Reply

vishal agarwal January 8, 2019 at 9:16 am

Sir I think the below link is the most inspiring post on this blog. I would suggest place this link permanently on the top of this blog so that it reminds every one how bad things can get and how we could recover.
https://optionsnext.com/blog/august-series-was-bad-how-do-we-recover-from-here/
- Sentilnathan January 8, 2019 at 9:38 am
  
  Good suggestion.
- admin January 8, 2019 at 8:53 pm
  
  Dear Vishal,
  Thanks for the kind words. I am happy that you found it useful.
  Cheers.
Sentilnathan January 8, 2019 at 9:58 am

Bought BHARATFORG 460 Put at 8.05
- vishal agarwal January 8, 2019 at 11:36 am
  
  Congrats you bought at day low 🙂 Hope you exit at expiry high.
  - Senthilnathan January 9, 2019 at 8:23 am
    
    Yes Vishal..I just attended the Mumbai workshop..
    influenced by the patience of Pramod Sir..
    so will be holding this one till expiry..alert to protect profit..
    Let me see what the market give me for my determined patience.
Sentilnathan January 8, 2019 at 10:54 am

Generally we have more Puts in our trades than the calls..
One fact is “FEAR” is more stronger than “GREED” .. it favours Put buyers.
Another thing I noticed (after attending the workshop at Mumbai) is that:
Most of the cases, the calls are not passing the volume filter..
So in case of stocks with uptrend, one has to :
Buy Equity stocks (not a leveraged play..capital is locked) Or
Buy Future of the stocks (Many may not be comfortable with Futures trading..comparatively higher risk than direct stock purchase due to leverage) Or
Buy the less volume calls and hope to get out at a good price
So better to stick with all the filters designed by Pramod Sir after his personal experiences.
Thanks Pramod ji for sharing your valuable knowledge with all of us.
- admin January 8, 2019 at 11:19 am
  
  What we discussed may not work all the time. But when it works it is wonderful. On our part we have to see that we do not get out of profitable positions too early.
  
  Will be posting another method of trading from tomorrow for readers with less patience. ( Some patience will still be required)
  
  Cheers.
  - Ravi kumar January 8, 2019 at 12:02 pm
    
    Looking forward to new method sir.. Always good to have multiple arsenal when you enter the War!
T. Sai January 8, 2019 at 6:32 pm

eagerly waiting sir
Gourav Basu January 8, 2019 at 8:41 pm

Sir, while the method of strike selection is clear, the method of premium selection is still not clear. How do you decide the range of premium to be paid? Also, if an option is available at a moderately high premium, it only indicates that the option is moving towards the favoured direction, rather than opposite to it. The amount of money risked, also doesn’t seem to be the issue, as we have already committed 13k in one infosys trade, but refuse to commit 7-8k or more for Ashok Leyland trade
- admin January 8, 2019 at 8:51 pm
  
  Price to be paid is always subjective. We paid a big amount for Infy call as it was the first day of current expiry and full 25 days of time was available.
  Now 8 days are gone and we have to lower our risks while expecting the trade to do well.
  Sometimes such a missed trade will prove costly,at other times it may actually save us some money. There is always another trade to take.
  And some readers have taken the trades with slightly higher premium. It is purely a personal decision.
  Cheers.
Senthilnathan January 8, 2019 at 8:52 pm

Pramod ji,
HINDALCO 52 w low is at 192.35 CMP 206.50
Put 190 at 1.25 to 1.50 seems a reasonable bet. Lot size 3500 Maximum exposure at 1.50 will be Rs.5250
As already we have TATASTEEL Puts, being in the same sector this trade may be taken at the discretion of traders based on their own risk profile and capital availability.
—————————————————————————————————————————
UNIONBANK CMP 94.55
Aggressive traders and Call lovers may consider CALL 100 at 1.20 to 1.50 Lot size is 7000 Total exposure at 1.50 will be Rs.10,500
—————————————————————————————————————————
Personally I would prefer no trades and wait & watch. Please comment when you are free
- admin January 8, 2019 at 9:00 pm
  
  I have very good memory of HINDALCO 52 week low. A day before this low, I had exited PUT 210 at Rs. 14.70 ( Bought at Rs. 2.10 ). Next day, the low happened. It fits the criteria and the problem is same– we are already into a trade in the same sector. If the sector continues weak ( it did not do that today) both trades will come good.
  
  I have not studied UNIONBANK.
  
  Cheers.
  - Senthilnathan January 8, 2019 at 9:22 pm
    
    Thanks for your comments..
    As others I am also eagerly waiting for your another method of trading.
  - Senthilnathan January 8, 2019 at 10:05 pm
    
    Honestly, I am also not familiar with UNIONBANK..
    When I applied all our selection parameters, got this one..
    Otherwise. generally I am not comfortable with PSU banks.
Yogesh January 8, 2019 at 9:11 pm

Sir, what can be done with sunpharma..? Should we exit it. I had sunpharma 400 pe at 3.3.. I also have techm 640 pe at 4.5 and hcltech 900 pe at 12..Also sir, do you have any plans for giving a training session at indore.?
Hrishikesh Raskar January 8, 2019 at 11:31 pm

When will be there session in delhi Sir?
- admin January 9, 2019 at 8:08 am
  
  Dear Hrishikesh,
  
  Probably you did not see the post on top of the page. Session at Delhi is scheduled for February 03, 2019. ( Sunday ).
  
  Please confirm your participation at the earliest.
  
  Thanks.

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January 2019— Options Buying Continued — Day 08

Comments

vishal agarwal January 8, 2019 at 9:16 am

Sentilnathan January 8, 2019 at 9:38 am