Out of 29 trading days, 14 are gone.

We are nowhere near profits. On the other hand there is a big loss staring us in the face and let us face the fact that some of the options have gone wrong badly.

When do we say a trade in options has gone really bad.

In my view it is that trade where both the price and time decay have damaged the trade.

In our list, the prime examples of this are — KPIT Call 320.

For becoming ITM, the stock needs to gain more than 15% over next 4-5 days. Not impossible, but not likely either. I would happily forego the remaining Rs. 0.20 value in this trade in exchange for some PUT coming into the money nicely. Taking back Rs. 900 is not going to make us very rich. It is now a take it or leave it case.

BANKNIFTY would also come into this category. But here we need only 600 point move which is less than 3% of the Index. It is known to show this kind of volatility. So we stay in the trade with a hope and a prayer.

BHEL and IDEA are at the cusp. They can make or break. These are the real cliffhangers and right now we are looking at the beautiful scenery on the other side whereas the pit on this side could be very deep.

But who said making money did not involve some tension?

INDUSINDBK also recovered very smartly today and now sits at the same perch with the above two.

UPL has proved our star performer and if it continues to perform like this, I would suggest getting out at Rs. 20 and buying 640 PUT. If it is going to really crash, it will go below 640 also. If it does what BHEL did last month, we shall be left licking our wounds. Time to cash in and reduce the risk.

Now we have the real problems — PNB, SBIN, BHARTIAIRTEL, RELCAPITAL .

They have actually not gone very far away price wise. Here time has killed the option price.

But these stocks have good volatility and if that comes into play in the right direction over next 4-5 trading days, at least 2 out of 4 trades can become good.

Does it happen this way?

With me it has happened quite a few times. But there are times when the market just keeps playing with your hope and fear.

With NIFTY going up today, we were bound to be in negative. Still some face saving was done by INDUSINDBK and UPL.

Here is the chart:

The prices moving in favor or away can be seen from the Futures Positions Chart. If the same trades were initiated in Futures, it would have looked very nice.

We are still in with a chance where the price is around the point when the option trade was considered for entering.

For Day 15, we do nothing and see if the trades go along expected lines as mentioned in so many words above.

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.