NIFTY moved up yesterday by 42 points.
We had 5 PUTS.
Such up move days are not good for the holders of PUTS. Only thing we can wish for is that it should not turn out very bad.
NIFTY was up. Luckily for us Banking Sector was subdued. ICICIBANK, SBIN and PNB all moved lower for the day. The PUTS did not gain much in value but they did not lose either.
BHARTI and RELCAPITAL were low initially when NIFTY was on the low side. Later they moved up along with the rest of the market. But both these stocks also did not close near the high points of the day.
I consider the day as par for the course. Not a good day but not bad either.
Here is the status:
A small loss.
New Trades :
I try to stay with the tried and tested. Familiarity with the stock and its price movements gives a comfort. It can become very uncomfortable when the trades go wrong. Then the familiarity helps in assessing whether the trade can move back to profit within the expiry time.
Such two familiar names are:
VEDL and BHEL.
VEDL : VEDL is on the down trend for quite some time. Last month too it moved down from 255 levels to 230 on Expiry but unfortunately we were holding 230 PUT. On Monday, it went above 240 to give back all the gains and came within touching distance of 230.
It is not very far from the 52 week low of Rs. 221.60 made on June 22, 2018.
Let us expect that move and be positioned in PUT 220.
We can get this Option for a price range of Rs. 4.20- 4.80.
This was our star performer last month. It did not have anything to do with the up move today. At one stage it was at a handshake away from the 52 week low of Rs. 69.10 made on June expiry day.
Generally I do not go for odd type of strikes but in this case would like to go for PUT 67.5
Lot size is big at 7500 and we have to be mindful of the costs while looking for opportunities to make money.
Price range Rs. 1.40 to 1.60 should be okay.
With these two additions, we will now have 7 PUTS to monitor.
If the market makes an up move, we will have to cut the losses and run.
But for the time being, I would like to be in these trades.
Let us see how the day unfolds.
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.
Sha Navas July 4, 2018 at 2:44 pm
This was regarding your earlier comment on the movement of the top five and bottom five stocks of Nifty in relation to that of Nifty as a whole.
Recently, I was comparing Nifty with the Nifty-Equal Weight index for a period of over 5 years. What I find was the current ratio of Nifty-Equal Index to Nifty is much lower than its historical average.
Moreover, this ratio normally increases with increasing Nifty. But since Mar 2018, this ratio is declining steadily but Nifty has gained much during this period.
What are your thoughts on this?
sonu July 4, 2018 at 10:17 pm
hiiii sir can u recommended me for best option and futures book plzzzzz..Reply
admin July 5, 2018 at 8:16 am
On the site you find links to some trading books on the right panel. These books are my suggestions to every trader. Trading is mostly about mind set. Simply reading about Options Trading will not get you anywhere.