First day of July Contracts Expiry month.
Technically it is not the first day, contracts are open for 3 months but the trades are so few that for all intents and purpose we can call it Day 1.
Again we shall have 20 days to do our thing.
June series really went like a T-20 match where we scored all the winning runs in the last 2 overs i.e. Day 19 and 20. Hopefully, the progress should be smoother this time.
Over last two days many stocks have fallen considerably.
Many of our selections made 52 week lows on June 28. Shall we continue with them?
How low can they go further?
We do not know and neither do any of the people who swear by the charts. None of them told to Sell UPL at 685 and wait till 606. Nobody mentioned that BHEL will go to 70 when it was 83. I had suggested to BUY PUT 75 when it was at 83.
The problem with these kind of very volatile stocks is that the premiums are very high in the early days. If the move does not come quickly, time eats away the premium and then we have to hit sixers in the last overs which does not always work out. The other problem is that profit comes mainly from these Options only.
So we strike a balance by buying sufficiently OUT OF MONEY options.
For the first day I am not giving too many selections. we can enter the trades on Monday/Tuesday as well.
Let us enjoy the profits of June before putting them back into trades.
(1) Punjab National Bank :
It made new 52 week low of Rs. 71.65 on June Expiry day and closed at Rs. 72.80.
Where does it go from here?
It had moved down from a high of Rs. 78.50 to the low of 71.65 within almost two hours of trading. surely something is wrong somewhere. There may be some bargain hunting buying today and I wish that happens so that we can buy our PUTS cheaper.
PUT 70 JULY EXPIRY traded at Rs. 3.20. If the price moves little higher and we can get it below Rs. 3.00 it should be a good trade.
Maximum Risk– Rs. 16500. Lot Size has changed to 5500 from earlier 4000.
(2) ICICIBANK :
Among Private Sector banks this is one of the weakest stocks presently. I wanted to go for it in June also but as we all know we were not in a good position most of the time so new trades were avoided.
From January to June the stock has come down to Rs. 270 level from a high of Rs. 365.
The 52 week low is Rs. 255 and if the weakness persists, it may breach this level in July.
Watch the trend for a while before entering the trade. I would like to go for PUT 260 at a price around Rs. 4.70 or so. Can go up to Rs. 5.00 if the trend for the market looks negative.
(3) BHARTI AIRTEL :
Our BHARTI trade went worthless in June. We made up for that loss from its counterpart in the same business IDEA.
I believe that the sector remains bad business. There are occasional volatile up moves which are invariably followed by equally volatile down moves.
It made a low of Rs. 351.60 on May 22, 2018 and a fresh move in that direction can not be ruled out.
PUT 360 for around Rs. 5.40 -5.80 would be my choice for trade in BHARTI.
These are my views on the trades for June 29, 2018.
Let us see how they work out.
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.
Nathan June 29, 2018 at 9:19 am
Good Morning !Reply
The lot size for PNB JUL series is 5500 instead of 4000 in JUN series.
admin June 29, 2018 at 10:10 am
I had just corrected the post and your message arrived.
Madan Mohan June 29, 2018 at 11:24 am
Yesterday TechMahindra had fallen from 717 to 637, it can not be considered as profit booking. There could be some reason.Reply
Vijay C June 29, 2018 at 12:05 pm
What are your views on Titan and TataGlobal. Can you think of any trade in those 2 stocks. Thank you.
Saket June 29, 2018 at 2:39 pm
As per SEBI’s mandate, physical settlement in F&O segment has started from July-expiry for 46 stocks. Can you please do an article explaining its implications – especially to the retail traders?
Vikas Gupta June 29, 2018 at 8:44 pm
From now onwards we can not let it expire. We must have to sell it before expiry unless we are interested in physical settlement.Reply
admin June 29, 2018 at 9:36 pm
Thanks for sharing.Reply
Physical settlement would be applicable to a list of 45 selected F&O stocks.
I will be writing about them soon.
admin June 29, 2018 at 9:39 pm
We had American Style options trades on NSE up to year 2008.
The present proposed physical settlement would be at expiry only and that too in selected list of 45 stocks.
Still it needs to be written about. Will be doing it shortly.
Saket June 30, 2018 at 2:33 pm
Thank you. Waiting for your detailed post 🙂Reply
Reshmi P R June 30, 2018 at 11:48 am
Sir, I bought PNB put 70 at 2.7, ICICI put 260 at 4.40 and Airtel put 360 at 6.8. Also bought NBCC put 70 at 2.2 . Currently at 12k loss,hope to recover as time progresses.Reply
admin June 30, 2018 at 11:54 am
Thanks for sharing.Reply
As we found out in June Expiry, options trading is not like day trading. Nor it is similar to putting the card in ATM slot and taking cash. There will be lots of drama before the money is seen.
Keep the faith.
Devendra Bagul June 30, 2018 at 1:36 pm
Will it be fine if we can get the suggested 3 puts lower than the price suggested by you?
admin June 30, 2018 at 2:12 pm
The strategy is to be set up at zero cost. That is the basic point. It is to ensure that in case of being wrong ( means market going up) the loss will be zero.
We are buyers of 1 lot and sellers of 2 lots. At Friday prices, the setup is available at a positive cash flow of Rs. 2.95.
So it is okay to enter at these prices.
Devendra June 30, 2018 at 8:06 pm
I was referring to PNB, ICICI Bank, and Bharti Airtel puts.
Forgive me if I have confused you.
admin June 30, 2018 at 9:37 pm
I thought it was about PUT spread strategy as the comment came to me in the mail and was preceded by a comment on that post.
Surely you can buy these PUTS at a little lower price too but keep the trend in mind. There is no point in buying at few points lower if the stock price has run away by 10%. Again it would depend upon the volatility of the individual stock. In my view all the three options can be bought at the Friday closing prices too.
Dev June 30, 2018 at 9:51 pm
sir, we should not forget sbin, right! which moved like rocket after bad results ,I think now it is turn to take our money back which was snatched by it in that irrational move.Reply
By the way I thought of entering 285PE at 4rs when it was at 289 as it looked like the last minute flame of candle going to be blown.
admin June 30, 2018 at 10:00 pm
I have not forgotten SBIN.
All the trades can not be mentioned on the same day. I had expected some rebound on the day after Expiry and it happened. SBIN did not participate in the rally. It closed towards the lower side of the day’s movement. That indicates no strength.
A trade in SBIN shall be suggested soon.
You have done your own analysis. Congratulations. Do more like this. Cheers.Reply