A good rebound.
That is what NIFTY did yesterday.
After the 82 point fall on Monday, it almost made it good on Tuesday.
Action happened in our stocks. Our heroes of Monday became zeroes on Tuesday. This is what Options Trading is about. From dream to disaster on the same day. Many are upset, many fortunes are lost.
That is why I advise caution all the time. We should not be holding positions beyond our risk tolerance levels. We should take suitable exits. Do not let fear make you run away from taking good profits, let common sense guide you to protect a big profit. We can give away part of the profit while waiting but when things start going wrong , an exit saves further loss of profit.
Even on such a day when everything was going wrong BHARTIAIRTEL made another 52 week low and this is one PUT which gained today.
All others went south.
But I had written very specifically to take suitable exits in BHEL, RELCAPITAL and HINDPETRO.
All my fears came true in these three.
Other stocks too went wrong but in these 3 we could prevent a bigger loss or loss of profit.
Based on the feedback received from readers, I have taken the exit prices for BHEL as Rs. 3.60, RELCAPITAL at Rs. 26.00 and HINDPETRO at Rs. 3.00.
Public Sector banks went up today by a bigger margin than they had fallen yesterday. Government has given some of them Recapitalization Money to waste over next few years. They will surely waste that money like they have been doing all these years but for the present our PUTS are spoiled.
I would like to go on record here that in spite of this heavy dose of capital, PNB will surely go below 70 in near future but it is very doubtful that it will do so before July 26.
Let us watch the action today and then take a decision about salvaging something out of this bad trade. I am not fond of salvaging pennies but sometime it is a good option.
With almost every trade going wrong, the day could not have ended on a bright note. Let us not be very unhappy. with the timely exits taken in UPL earlier and BHEL and RELCAPITAL now, the position is better than what it was on Friday. Only in comparison with Monday it looks bad.
We are still looking at a profit of Rs. 75328.
Those lucky traders who sold UPL at Rs. 50-51 would be doing better than this.
With these exits, we are now left with only 6 trades out of which only 1 ( Bharti ) is doing right and 5 others have gone wrong. Tata Motors has a good chance of turning for our advantage. For the banks stocks let us watch the action today.
There may be further losses today. It happens. We have seen that in June Expiry entire profit came in last 2 days. Never give up and never lose the will to do the right thing. We are in better shape than where we were after 13 days of trading in June.
New Trades :
More things change, more they remain the same.
Why to go looking everywhere when we can stay with our limited list.
Keep a watch on UPL and if it moves towards 565, we can BUY PUT 560 for about Rs. 10-11.
It had made the 52 week low only a few days ago ( July 13 ) and then moved up to 570 levels as some buying comes in at low prices. Moving towards 565 will confirm the weakness again and it is worth taking a chance.
We have to stay cautious as the time to expiry is reducing and premiums are still very high due to expectation of big volatility.
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.
subbu July 18, 2018 at 8:59 am
Thanks for helping all.
I have one question on exiting the positions, how others will come to know the exit price as you mentioned on BHEL,RELCAP and HINDPETRO if few people exited on their own. Please advise, it will help others as well. ThanksReply
admin July 18, 2018 at 9:09 am
I had mentioned for these trades specifically to be cautious and take appropriate exits. The reason for the first two was that we are deep in the money due to volatility on one day only. The gains can go away by same volatile move against us and that is what actually happened. HINDPETRO was a pure Crude Oil play. As the crude prices had fallen in a big way the stock was bound to go up.
These posts are not tips or spoon feeding. I trust the intelligence of my readers to take suitable action when doubts are expressed.
Other stocks too have gone wrong but I did not say anything about them. Losses happen but when we can curtail them based on the information we have action should be taken.
Niloy Roy July 18, 2018 at 12:18 pm
Thank you sir for your help and superb guidance. Hoping to meet you in the Bangalore workshop. I managed to exit BHEL & Reliance Capital. However, I missed exiting HindPetro. And now am holding it at a loss. Should I wait for any further movement or restore whatever salvage value is there by exciting at current.Reply
admin July 18, 2018 at 1:06 pm
You are welcome to the Bangalore f&O session.
BHEL and RELCAPITAL both PUTS recovered today. HINDPETRO looks bad at present. Let us stay with it for another day. salvaging a little amount will not make a difference. But a 2% up move in crude can give some more money in this option.
Looking forward to your confirmation for August 05.
Ravi July 19, 2018 at 7:13 pm
Sir, whats ur view on ashokleyland for august option series. Posted decent result but falling heavily due to cargo news.
Am of view that it will correct these lows and go high..
Pls give ur inputReply
admin July 19, 2018 at 10:00 pm
Thanks for sharing your thoughts. Cargo news applies to Tata Motors also but it has recovered marginally from the low. For August Expiry we shall see the situation on July Expiry day. i agree with you that there may be a rebound.