June 2018– Options Once Again– Day 01

This time the first day of the series is the first day of the month. We could have bought/ sold June Expiry contracts in May also, but the volumes are pricing are never right unless it is the current month contracts.

We have 20 trading days to make money. Let us not talk of the other result which generally occurs when we do not make money.

The Usual Suspects :

I am not a fan of too much variety. It is better to stay with the tried and tested stocks. Like you understand the whims and moods of your partner in a relationship, it is important to understand the price movement of the stock you are trading in.

So we stay with almost same set of stocks with an occasional fling elsewhere.

BHEL : In May it made the 52 week low of Rs. 73.70 on May 24. Recovered to above Rs. 86 before closing at Rs.83.65. It is very volatile by nature and the premiums are high. We go for PUT 75 at Rs. 0.75.

SBIN : This is a contrarian trade. It moved up by 15% during May Expiry. The entire move came after the results which were bad. It has become quite common for banking stocks to go up after bad results. Sanity prevails after some time. I believe that time could be this month. PUT 250 at Rs. 3.00 is my choice for this stock.

VEDL : How nicely it moved down last month ? This gives us some food for thought and choice for trade. PUT 230 at Rs. 5.20 would be my choice.

BHARTIAIRTEL : I have always maintained that telecom companies are bad investments. It was one of the stocks which we had identified as weak when it traded at Rs. 495 on January 19, 2018. Now it is at Rs. 373.60. It made a 52 week low of Rs. 351.60 on May 22. A repeat of the same moves should be good for us. We go for PUT 360 at Rs. 6.60.

RELCAPITAL : Stocks from ADAG ( Anil Dhirubhai Ambani Group) are very volatile and interesting trades. Today it moved down from Rs. 448 to Rs. 413 when NIFTY had gone up by 121 points. Why it went up to Rs. 448 is also mind boggling. We do not look for reasons. It makes for a good trade. We buy PUT 400 at Rs. 10.80.

There are many other possible trades. It is suggested to look for them yourself. That is the purpose of this series and this blog.

Before my readers say that I am partial to PUTS, let me suggest few CALLS also.

M&M : It is looking very good for an up move. If the recent momentum is maintained we could be looking at good profits. CALL 960 at Rs. 11.45 is my choice.

INDUSINDBK : We go for CALL 1980 at Rs. 22 or CALL 2000 at Rs. 17. The lot size is 300 so the risk is only Rs. 6600 and Rs. 5100 if these rates are traded. For review purpose, we shall consider 1980 CALL.

We end the first day selections with 7 Options.

2 CALLS and 5 PUTS.

We shall add more as the month progresses.

Happy trading.

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

shankar June 1, 2018 at 10:39 am

hello sir,
What abt tata motors.
U skipped it this time

admin June 1, 2018 at 3:37 pm

Some things are left to the readers also. Yes, Tata Motors is a good selection. I may add it next week after observing for a day or two.

Thanks for reading.
Reply
shankar June 1, 2018 at 4:53 pm

thank you sir fr the reply. i took a 280 pe at 10. May auto sales spoiled the trade . Holding fr june end.
And bhel the spot price is very far from the strike u suggested. i want to add bhel in my list too
Reply
- admin June 1, 2018 at 5:04 pm
  
  In May BHEL had moved down to Rs. 73.70 from Rs. 90 levels. PUT 75 was considered for the low risk. If we lose the entire premium, it is Rs. 5625. ( Suggested price– Rs. 0.75 ). The stock fell 4% today and the PUT price is Rs. 1.20 now.
  
  We can only hope that price keeps moving in our direction and moves fast.
  Reply

Jash June 1, 2018 at 2:17 pm

Hello sir. How about adding reliance ind on buy side? It corrected 5% in the month of may.

Jash June 1, 2018 at 2:25 pm

Hi sir

RCK June 1, 2018 at 4:23 pm

Hello Sir,

If am not able to buy options at the recommended price. What should I do?.
what is the waiting time?
I couldn’t buy BHEL and RELCAPITAL.
Please let me know.

Thank You!

admin June 1, 2018 at 5:06 pm

Dear RCK,

It would depend on your conviction whether to buy at a higher or lower price. A few points either way do not actually matter as we are looking for big profits.

Thanks for reading and the comments.
Reply

Girish June 1, 2018 at 5:58 pm

Hi Pramod sir,

Thank you so much for posting. Learning a lot from you. I have few questions:

1. I still believe that pharma and auto are weakest sectors. I don’t see any stocks in your list for this series. Is there anyway to find the weak sectors?

2. Even though HINDUNILVR and TATAMOTORS performed extremely well in the last series, you have not considered it in this series. Is there any specific reason?

Also please let me know when the next training session will be held in Bangalore.

Thanks a lot again sir,
Girish

admin June 1, 2018 at 6:26 pm

Dear Girish,

You are right. Automobile and Pharma are weak sectors. But we have to select carefully because Options can become worthless. I am buying Tata Motors PUTS since January and so far they are obliging.

Sometimes we just take a breather which helps. Like it happened today. Hind Lever was a loser today and Tata Motors was a gainer. So we can buy the Options a little cheaper on Monday or Tuesday.

Next session in Bangalore would be by end of July or early August.

Cheers.
Reply
- Girish June 1, 2018 at 6:30 pm
  
  Thanks a lot for the reply sir.
  Reply

Vivek June 1, 2018 at 6:17 pm

Airtel rose to a fresh hightoday sir, crossing its Bollinger band average . Do you still think it would fall?

admin June 1, 2018 at 6:32 pm

Well, everyone has way of analysing. With all the methods one can go wrong. I still believe that Airtel will move down and I lose the premium if I am wrong. Some other Option would pay for it.

When I picked Airtel for shorting at Rs. 495, no one was suggesting weakness in this. Now we are thinking of strength at Rs. 380. This is what all the analysis is worth. Stocks will do what they do– move up and down and we keep ourselves busy with Elliot’s waves and Bollinger bands and have no money to show for all the analysis.

Thanks for reading and the comments.
Reply

Vivek June 1, 2018 at 8:10 pm

Thank you sir. Always your follower irrespective of results. Trying to analyze the way you see things

admin June 1, 2018 at 9:26 pm

Welcome to the world of simplicity. Mostly it works out.
Reply

Mahesh June 1, 2018 at 10:24 pm

SBIN , vedanta made money based. Airtel lost. SBIN booked profit of 2k today. Some news SBIN will get huge amount of cash as recovery. bHEL just missed.

Mahesh June 1, 2018 at 10:26 pm

Sir, your analysis is super.. I read all your writing in quora.. eager to enroll the course at Bangalore..

admin June 2, 2018 at 12:50 pm

Thanks Mahesh. Bangalore program will be decided by the end of month. It is likely to be scheduled in July 2018.
Reply

RCK June 2, 2018 at 12:35 pm

Dear Sir,

While analyzing your Call and Put selection; I attended your first training in Bangalore and based on the technique that I learned there and applying it on your recommendation there are several other scripts which are better than M&M and For ex HCLTECH, BPCL etc., just to name a few and accordingly there are several other better scripts for Put selection. I like to know what are the other parameters that you consider while selecting these Put and Call scripts ( am asking only the new recommended scripts for this series) . So that it will help to understand better and we’ll be on same page.

Thank You!

admin June 2, 2018 at 1:02 pm

Dear RCK,
It is good that you are doing your analysis and making selections.

There are quite a few reasons for suggesting/suggesting an Option here:

My familiarity with the stock price movement. ( This is the most important factor)

I can give a number of selections but everything comes at a cost. Most traders are small traders with small budgets. Too many suggestions would make them leave out a few and it becomes a random decision.

I am putting the selections in public domain and the final outcome matters to me. So personal conviction also matters.

Your selections are right as per the defined criteria and if you want to go for any Options in these stocks it is quite okay.

My purpose of writing here is to encourage such analysis by the participants and not become a tipster myself.

Cheers.
Reply

Pradeep June 3, 2018 at 9:01 pm

Hello

I am new to your blog. Trying to learn options in every possible way, Do you provide all the stocks as a whole or can I chose 1 or 2 out of it

admin June 3, 2018 at 9:27 pm

Dear Pradeep,

I am not providing tips. This is an exercise in stock picking and trading Options done in the open so that readers can benefit from it. Do your own analysis in a similar manner and initiate your trades. You can pick the same trades as I do but I hold no liability for your losses. If I am wrong ( many times I am) I suffer the losses.
What trades to take should be decided based on your conviction and risk taking capability.
Thanks for reading.
Reply

Pradeep June 3, 2018 at 9:49 pm

I totally understand that these are not tips and only for educational purpose. What I am trying to figure out is that on the modus operandi. Whether a consolidation ( to even out profit and loss) of all these picks should be looked at or individualistic

admin June 3, 2018 at 9:57 pm

We really do not know what may turn out to be right. Hence the result is to be viewed on a consolidated basis.

In May Expiry, we had 4 trades out of 11 giving profit and another one giving back part of the money ( MARUTI ) and still made a good profit. You can read it here:

https://optionsnext.com/blog/may-2018-selections-we-trade-options-review-on-expiry-may-31/
Reply

shankar June 1, 2018 at 10:39 am

hello sir,
What abt tata motors.
U skipped it this time
- admin June 1, 2018 at 3:37 pm
  
  Some things are left to the readers also. Yes, Tata Motors is a good selection. I may add it next week after observing for a day or two.
  
  Thanks for reading.
- shankar June 1, 2018 at 4:53 pm
  
  thank you sir fr the reply. i took a 280 pe at 10. May auto sales spoiled the trade . Holding fr june end.
  And bhel the spot price is very far from the strike u suggested. i want to add bhel in my list too
  - admin June 1, 2018 at 5:04 pm
    
    In May BHEL had moved down to Rs. 73.70 from Rs. 90 levels. PUT 75 was considered for the low risk. If we lose the entire premium, it is Rs. 5625. ( Suggested price– Rs. 0.75 ). The stock fell 4% today and the PUT price is Rs. 1.20 now.
    
    We can only hope that price keeps moving in our direction and moves fast.
Jash June 1, 2018 at 2:17 pm

Hello sir. How about adding reliance ind on buy side? It corrected 5% in the month of may.
Jash June 1, 2018 at 2:25 pm

Hi sir
RCK June 1, 2018 at 4:23 pm

Hello Sir,

If am not able to buy options at the recommended price. What should I do?.
what is the waiting time?
I couldn’t buy BHEL and RELCAPITAL.
Please let me know.

Thank You!
- admin June 1, 2018 at 5:06 pm
  
  Dear RCK,
  
  It would depend on your conviction whether to buy at a higher or lower price. A few points either way do not actually matter as we are looking for big profits.
  
  Thanks for reading and the comments.
Girish June 1, 2018 at 5:58 pm

Hi Pramod sir,

Thank you so much for posting. Learning a lot from you. I have few questions:

1. I still believe that pharma and auto are weakest sectors. I don’t see any stocks in your list for this series. Is there anyway to find the weak sectors?

2. Even though HINDUNILVR and TATAMOTORS performed extremely well in the last series, you have not considered it in this series. Is there any specific reason?

Also please let me know when the next training session will be held in Bangalore.

Thanks a lot again sir,
Girish
- admin June 1, 2018 at 6:26 pm
  
  Dear Girish,
  
  You are right. Automobile and Pharma are weak sectors. But we have to select carefully because Options can become worthless. I am buying Tata Motors PUTS since January and so far they are obliging.
  
  Sometimes we just take a breather which helps. Like it happened today. Hind Lever was a loser today and Tata Motors was a gainer. So we can buy the Options a little cheaper on Monday or Tuesday.
  
  Next session in Bangalore would be by end of July or early August.
  
  Cheers.
  - Girish June 1, 2018 at 6:30 pm
    
    Thanks a lot for the reply sir.
Vivek June 1, 2018 at 6:17 pm

Airtel rose to a fresh hightoday sir, crossing its Bollinger band average . Do you still think it would fall?
- admin June 1, 2018 at 6:32 pm
  
  Well, everyone has way of analysing. With all the methods one can go wrong. I still believe that Airtel will move down and I lose the premium if I am wrong. Some other Option would pay for it.
  
  When I picked Airtel for shorting at Rs. 495, no one was suggesting weakness in this. Now we are thinking of strength at Rs. 380. This is what all the analysis is worth. Stocks will do what they do– move up and down and we keep ourselves busy with Elliot’s waves and Bollinger bands and have no money to show for all the analysis.
  
  Thanks for reading and the comments.
Vivek June 1, 2018 at 8:10 pm

Thank you sir. Always your follower irrespective of results. Trying to analyze the way you see things
- admin June 1, 2018 at 9:26 pm
  
  Welcome to the world of simplicity. Mostly it works out.
Mahesh June 1, 2018 at 10:24 pm

SBIN , vedanta made money based. Airtel lost. SBIN booked profit of 2k today. Some news SBIN will get huge amount of cash as recovery. bHEL just missed.
Mahesh June 1, 2018 at 10:26 pm

Sir, your analysis is super.. I read all your writing in quora.. eager to enroll the course at Bangalore..
- admin June 2, 2018 at 12:50 pm
  
  Thanks Mahesh. Bangalore program will be decided by the end of month. It is likely to be scheduled in July 2018.
RCK June 2, 2018 at 12:35 pm

Dear Sir,

While analyzing your Call and Put selection; I attended your first training in Bangalore and based on the technique that I learned there and applying it on your recommendation there are several other scripts which are better than M&M and For ex HCLTECH, BPCL etc., just to name a few and accordingly there are several other better scripts for Put selection. I like to know what are the other parameters that you consider while selecting these Put and Call scripts ( am asking only the new recommended scripts for this series) . So that it will help to understand better and we’ll be on same page.

Thank You!
- admin June 2, 2018 at 1:02 pm
  
  Dear RCK,
  It is good that you are doing your analysis and making selections.
  
  There are quite a few reasons for suggesting/suggesting an Option here:
  
  My familiarity with the stock price movement. ( This is the most important factor)
  
  I can give a number of selections but everything comes at a cost. Most traders are small traders with small budgets. Too many suggestions would make them leave out a few and it becomes a random decision.
  
  I am putting the selections in public domain and the final outcome matters to me. So personal conviction also matters.
  
  Your selections are right as per the defined criteria and if you want to go for any Options in these stocks it is quite okay.
  
  My purpose of writing here is to encourage such analysis by the participants and not become a tipster myself.
  
  Cheers.
Pradeep June 3, 2018 at 9:01 pm

Hello

I am new to your blog. Trying to learn options in every possible way, Do you provide all the stocks as a whole or can I chose 1 or 2 out of it
- admin June 3, 2018 at 9:27 pm
  
  Dear Pradeep,
  
  I am not providing tips. This is an exercise in stock picking and trading Options done in the open so that readers can benefit from it. Do your own analysis in a similar manner and initiate your trades. You can pick the same trades as I do but I hold no liability for your losses. If I am wrong ( many times I am) I suffer the losses.
  What trades to take should be decided based on your conviction and risk taking capability.
  Thanks for reading.
Pradeep June 3, 2018 at 9:49 pm

HI

I totally understand that these are not tips and only for educational purpose. What I am trying to figure out is that on the modus operandi. Whether a consolidation ( to even out profit and loss) of all these picks should be looked at or individualistic
- admin June 3, 2018 at 9:57 pm
  
  We really do not know what may turn out to be right. Hence the result is to be viewed on a consolidated basis.
  
  In May Expiry, we had 4 trades out of 11 giving profit and another one giving back part of the money ( MARUTI ) and still made a good profit. You can read it here:
  
  https://optionsnext.com/blog/may-2018-selections-we-trade-options-review-on-expiry-may-31/

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June 2018– Options Once Again– Day 01