January 2019— Options Buying Continued

After 4 days of gains, NIFTY took a break yesterday and closed lower.

It did us no good.

INFY was up slightly but CALL 700 did not gain much.

BHARATFORG surged higher. Just a day ago it had made new 52 week lows and has now moved higher by almost 12 Rupees from that level causing a severe setback in our PUT 460 trade.

TATASTEEL was mildly positive in a weak market today.

Overall the day was not good for us.

Now once again we are in a position where option buyers usually are. That is the losing position.

We have seen time and again that option prices fluctuate wildly with the moves in underlying price. So such situations are normal and there is no need to panic.

We made our selections based on a method which has worked over time. We stay with the trades and do not add any more trades today.

There will be lot of noise today with TCS results already announced and INFY results to come out today. Be prepared for sudden moves in both directions.

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

Sandeep January 11, 2019 at 9:27 am

Sir i have been following ur trade for the Jan series. How do we decide the exit point for the open trades.

Abhinav January 11, 2019 at 9:46 am

Sir, don’t you think it will be very hard to be profitable with put heavy portfolio in slightly bullish market.

Tharik January 11, 2019 at 9:59 am

Calls are also struggling in these market conditions. With PUTS, atleast we hope to have a profitable month
Reply
admin January 11, 2019 at 4:48 pm

We made money in July 2018 when Nifty moved up by about 450 points and we had 15 puts. Out of 15, only 5 we’re right trades.
It is individual strength and weakness which matters.
Cheers.
Reply

Badrinath January 11, 2019 at 11:36 am

i guess we can take coal india with 230 put and pidilite with 1100 pe

vishal agarwal January 11, 2019 at 3:47 pm

That kind of day – Arouse hopes and then break. Very difficult to hold on to the trades when you can see that stock and Nifty (10750-740) are on support level and can bounce back but you still hold on with the hope that the supports might get broken today and the trade might work in your favor but then by end of day – all hopes get dashed. None of my positions are in profit so far this month.

admin January 11, 2019 at 4:55 pm

Dear Vishal,
I think you missed Tata Steel trade. With the exception of Sunpharma other trades have not done so badly.
I don’t know what trades you have entered.
We have 14 trading days available for a turn around.
Cheers.
Reply
- vishal agarwal January 11, 2019 at 5:09 pm
  
  Yes, Sir, I was not able to take Tatasteel 480 PE trade on multiple occasions for one reason or the other. I have put on Sunpharma 390 (@6.5), Maruti 7200(@108), M&M 700(@7.3), Ashokley 92.5(@2.7), RelInfra 290(@7), ZEEL 420(@4.5) and Tatasteel 450 (Taken 2-3 days back @ 5)
  Reply
  - vishal agarwal January 11, 2019 at 5:51 pm
    
    I hope this should give some fuel to my “Auto Sector” heavy portfolio
    http://www.moneycontrol.com/news/business/economy/factory-output-plummets-to-19-month-low-at-0-5-in-november-3380371.html
    Reply

MR January 11, 2019 at 3:49 pm

I had thought tata steel will not crash, when you recommended.. I booked losses in calls. Today got TCS call

admin January 11, 2019 at 4:45 pm

Tata Steel has not yet crashed. The put 480 was suggested when the price was Rs. 510-512.
Today it made a low of 472. I am waiting for 460 and below. Then only we make some decent gain.
By the way why TCS call?
It is down for quite some time and lost big again today.
Reply
MR January 11, 2019 at 6:42 pm

After good results, TCS crashed.. so got call today . Infy will be bad than TCS. Monday expecting bounce back..
Reply

Pranav January 11, 2019 at 4:39 pm

Pramod Sir – What impact do u expect on our holding w.r.t. Infosys results? https://www.moneycontrol.com/news/business/markets/infosys-q3-profit-falls-12-ups-fy19-cc-revenue-growth-forecast-to-8-5-9-approves-buyback-3380471.html

admin January 11, 2019 at 4:58 pm

Most of the time when results are not good, stock price moves up.
Yes, this is how it is happening for last one year.
Markets are irrational most of the time and any outcome is possible.
Cheers.
Reply
- vishal agarwal January 11, 2019 at 5:16 pm
  
  True that. See the headlines about TCS results yesterday and the stock’s reaction was totally opposite.
  https://www.moneycontrol.com/news/business/earnings/tcs-q3-profit-rises-2-6-to-rs-8105-cr-constant-currency-revenue-growth-at-1-8-meets-expectations-3376441.html
  For Infosys they say – “https://www.moneycontrol.com/news/business/markets/infosys-q3-profit-falls-12-ups-fy19-cc-revenue-growth-forecast-to-8-5-9-approves-buyback-3380471.html”
  You can again expect the “unexpected” reaction by the stock price 🙂
  Reply

senthilnathan January 11, 2019 at 6:23 pm

As far as INFY is concerned, buy back at Rs. 800 is on the cards..
Only a small part of the holdings can be offered as there is a limit on total buyback.
This is likely to lead to some additional buying by existing big shareholders to the extent they can offer for buyback.
This will cause a reasonable up move in the stock.
But all depends on the record date and the big shareholders may scatter their buying to get the additional shares at a better price.
Thus ultimately it is the market to decide what to give to the poor option buyers like us.
The only thing we can do now is ” wait and watch ” – My personal view.

vishal agarwal January 11, 2019 at 8:54 pm

Good news for Infy CE holders. Infy ADR up 6%. Expect similar performance on monday in India.
https://finance.yahoo.com/quotes/INFY+HDB++IBN+RDY+TTM+WIT+VEDL/view/v1

admin January 11, 2019 at 8:58 pm

Never count your chickens before they are hatched.
It pays to stay patient and not jump to conclusions.
However keep hoping for the best.
Reply

PRAKHAR January 12, 2019 at 9:29 pm

Sir, why are you not on twitter.
Please do join.
You can save many life.

admin January 13, 2019 at 9:10 am

Thanks for the kind words.
One small step at one time. Maybe I will be on twitter in a few days.
Reply

Sandeep January 11, 2019 at 9:27 am

Sir i have been following ur trade for the Jan series. How do we decide the exit point for the open trades.
Abhinav January 11, 2019 at 9:46 am

Sir, don’t you think it will be very hard to be profitable with put heavy portfolio in slightly bullish market.
- Tharik January 11, 2019 at 9:59 am
  
  Calls are also struggling in these market conditions. With PUTS, atleast we hope to have a profitable month
- admin January 11, 2019 at 4:48 pm
  
  We made money in July 2018 when Nifty moved up by about 450 points and we had 15 puts. Out of 15, only 5 we’re right trades.
  It is individual strength and weakness which matters.
  Cheers.
Badrinath January 11, 2019 at 11:36 am

i guess we can take coal india with 230 put and pidilite with 1100 pe
vishal agarwal January 11, 2019 at 3:47 pm

That kind of day – Arouse hopes and then break. Very difficult to hold on to the trades when you can see that stock and Nifty (10750-740) are on support level and can bounce back but you still hold on with the hope that the supports might get broken today and the trade might work in your favor but then by end of day – all hopes get dashed. None of my positions are in profit so far this month.
- admin January 11, 2019 at 4:55 pm
  
  Dear Vishal,
  I think you missed Tata Steel trade. With the exception of Sunpharma other trades have not done so badly.
  I don’t know what trades you have entered.
  We have 14 trading days available for a turn around.
  Cheers.
  - vishal agarwal January 11, 2019 at 5:09 pm
    
    Yes, Sir, I was not able to take Tatasteel 480 PE trade on multiple occasions for one reason or the other. I have put on Sunpharma 390 (@6.5), Maruti 7200(@108), M&M 700(@7.3), Ashokley 92.5(@2.7), RelInfra 290(@7), ZEEL 420(@4.5) and Tatasteel 450 (Taken 2-3 days back @ 5)
    - vishal agarwal January 11, 2019 at 5:51 pm
      
      I hope this should give some fuel to my “Auto Sector” heavy portfolio
      http://www.moneycontrol.com/news/business/economy/factory-output-plummets-to-19-month-low-at-0-5-in-november-3380371.html
MR January 11, 2019 at 3:49 pm

I had thought tata steel will not crash, when you recommended.. I booked losses in calls. Today got TCS call
- admin January 11, 2019 at 4:45 pm
  
  Tata Steel has not yet crashed. The put 480 was suggested when the price was Rs. 510-512.
  Today it made a low of 472. I am waiting for 460 and below. Then only we make some decent gain.
  By the way why TCS call?
  It is down for quite some time and lost big again today.
- MR January 11, 2019 at 6:42 pm
  
  After good results, TCS crashed.. so got call today . Infy will be bad than TCS. Monday expecting bounce back..
Pranav January 11, 2019 at 4:39 pm

Pramod Sir – What impact do u expect on our holding w.r.t. Infosys results? https://www.moneycontrol.com/news/business/markets/infosys-q3-profit-falls-12-ups-fy19-cc-revenue-growth-forecast-to-8-5-9-approves-buyback-3380471.html
- admin January 11, 2019 at 4:58 pm
  
  Most of the time when results are not good, stock price moves up.
  Yes, this is how it is happening for last one year.
  Markets are irrational most of the time and any outcome is possible.
  Cheers.
  - vishal agarwal January 11, 2019 at 5:16 pm
    
    True that. See the headlines about TCS results yesterday and the stock’s reaction was totally opposite.
    https://www.moneycontrol.com/news/business/earnings/tcs-q3-profit-rises-2-6-to-rs-8105-cr-constant-currency-revenue-growth-at-1-8-meets-expectations-3376441.html
    For Infosys they say – “https://www.moneycontrol.com/news/business/markets/infosys-q3-profit-falls-12-ups-fy19-cc-revenue-growth-forecast-to-8-5-9-approves-buyback-3380471.html”
    You can again expect the “unexpected” reaction by the stock price 🙂
senthilnathan January 11, 2019 at 6:23 pm

As far as INFY is concerned, buy back at Rs. 800 is on the cards..
Only a small part of the holdings can be offered as there is a limit on total buyback.
This is likely to lead to some additional buying by existing big shareholders to the extent they can offer for buyback.
This will cause a reasonable up move in the stock.
But all depends on the record date and the big shareholders may scatter their buying to get the additional shares at a better price.
Thus ultimately it is the market to decide what to give to the poor option buyers like us.
The only thing we can do now is ” wait and watch ” – My personal view.
vishal agarwal January 11, 2019 at 8:54 pm

Good news for Infy CE holders. Infy ADR up 6%. Expect similar performance on monday in India.
https://finance.yahoo.com/quotes/INFY+HDB++IBN+RDY+TTM+WIT+VEDL/view/v1
- admin January 11, 2019 at 8:58 pm
  
  Never count your chickens before they are hatched.
  It pays to stay patient and not jump to conclusions.
  However keep hoping for the best.
PRAKHAR January 12, 2019 at 9:29 pm

Sir, why are you not on twitter.
Please do join.
You can save many life.
- admin January 13, 2019 at 9:10 am
  
  Thanks for the kind words.
  One small step at one time. Maybe I will be on twitter in a few days.

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January 2019— Options Buying Continued — Day 11