An Option Buyers life ( trading life ) is a roller coaster ride. From an exhilarating high to the depressingly low can be real painful. Like I stated yesterday, sometime we make money, other times we learn, this ride too is a lesson in profit management and keeping the belief.
This is NIFTY close yesterday. The all time high of 11171 is not very far. We may see that today or a day later.
Such a day was bound to be damaging and it really was.
Erosion of profit also looks like a loss and gives the same negative vibes. But we have to learn to counter these emotions.
Let us review the facts :
NIFTY has come up from 10589 on June Expiry day to 11134. A gain of 545 points.
Anyone BUYING PUTS this month actually has no business making profits. But most of our selections obliged very nicely till this week before they went wrong. Remember one of the readers posting about selling BHARTIAIRTEL 360 PUT at Rs. 29.00 ( It was Rs. 7.00 yesterday ) and UPL 600 PUT at Rs. 51.00 two weeks ago.
Market gave us our moments of glory and we took them graciously.
Market now tells us that you can not win all the time and we accept that as well.
It is not the first time it has happened. In May Expiry also it was similar. We gave away significant profits in the last part of the month but ended profitable. July Expiry is just a repeat of the same.
We shall do well to learn that ending up profitable on monthly basis with BUYING PUTS ONLY when market has gone against us by more than 500 points means that our selection process is good and works.
Let us learn to respect the market. In June Expiry we were deep in the red after 18 trading days. Only in last two days the positions became profitable.
One day can make or break. We have to stay cautions and avoid the break and keep hoping for the making up part.
This was the position yesterday.
Exit was taken from HINDALCO PUT 210 also at Rs. 9.50.
Now all the hope is on BHARTI and some volatility in our favor over two days can make things a little better.
Not a bad month. Made some money and learnt a few lessons. Two more days are still there and there can be more twists in the story.
Expiry Day Trades :
Dr. Reddy trade has already gone wrong.
I will be going for UPL 600 PUT again. At Rs. 2.50, the risk is Rs. 3000 and if it moves down by 5-6% , our work is done.
VEDL 210 PUT at Rs. 1.00-1.30 would be another good choice. Here the maximum loss could be Rs. 2275.
Without the risk there is no reward, so we take some calculated risk.
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.
Tharik July 25, 2018 at 3:35 pm
Bought BHEL 70 PUT @0.50.. Let’s see how it goes…It got sold off from 77 , which was the high price for the day..Reply