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.
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.