March 2019— Options Buying Again —- Day 13

NIFTY closed above 11500. It is now 228 points away from the all time high.

The markets behaved exactly same way on Tuesday as they did on Monday. Only the net gain was 70 points as compared to 35 points on previous day. Again, the gains came during the last part of the day.

After moving in a narrow range till 13:00 hours, there was a surge and that is when all the gains accrued. It is not a coincidence that the day chart for RELIANCE shows exactly similar pattern.

RELIANCE Chart March 19 :

RELIANCE made a new 52 week high at 1380. It is exactly the Strike Price which was suggested as a CALL yesterday. At least something went right for our trades. It will be interesting to watch the journey from now on. Whether it goes above 1400 or comes back to 1350. We shall find out to some extent during the course of the day.

It does not matter to us whether NIFTY is getting its strength from a few stocks or markets are strong in a broader sense. We need our trades to do well irrespective of NIFTY.

HEROMOTOCO is losing ground almost everyday but not with great speed. It is now less than 3% away from the 52 week low. That level needs to be breached fast for the trade to work out. MARUTI showed a decent down move yesterday.

ICICIBANK made the fresh 52 week high at Rs. 400.95 but could not sustain and fell back. YESBANK closed positive for the day but CALL 260 lost some value due to decrease in volatility.

We are still in the same position even with RELIANCE trade doing well yesterday. Only concern is that now there are 9 trades to worry about.

The position as on March 19:

With 9 trades already in position, we do not take new trades today.

Trade cautiously, trade profitably.

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

arnab March 20, 2019 at 8:06 am

I personally think that we are quite late in entering, i mean buying put where the stock has already fallen a lot or buying call when the stock has gained a lot already which is causing losses. Any means we can catch the early birds might be better.

Raveendran K A March 20, 2019 at 8:36 am

I have one suggestion in this regard. Why not consider just seven day losers/gainers for selecting trading candidates instead of considering both 30 day and 7 day periods ?
Reply
- admin March 20, 2019 at 8:45 am
  
  The method has been devised after many years of exercise. The problem with most traders are that they are looking for every trade to go right quickly even if by small margins. It has been observed that you can not make big money by taking small profits. The aim here is to be profitable in the long run.
  
  Option Buyers are an impatient lot. Ultimately they do not make money.
  
  This blog was meant to be a different approach to option buying and I intend to keep it that way. Occasional losses will come and they are to be taken with a pinch of salt. Big profits are a key to success and we have to look for them.
  
  Thanks for the comments.
  Reply
  - Rajiv March 20, 2019 at 10:10 am
    
    Sir,
    
    I absolutely agree with this method since i lost lot because i exited with small profits when market was willing to offer huge profits and when losses came they swept away my capital.
    
    My only question here is when our trade has gone south, premium starts decaying and we are close to expiry should we exit with some loss rather than losing entire investment in this trade?
    
    Regards
    Rajiv
    Reply

kaushik March 20, 2019 at 9:37 am

it doesnt matter if 70 % of your trades go wrong if you are making 500% return in a year

vishal agarwal March 20, 2019 at 10:56 am

Sir Zeel is looking weak compared to the Index. Do you think it can be a candidate for expiry week trades?

arnab March 20, 2019 at 2:57 pm

Today good day, bharatforg exited at 6.8, entered at 4.7,not very good, but am thankful to come out unscathed in this crazy bull market playing put calls.

KV Rao March 20, 2019 at 5:04 pm

When I saw Infosys PE recommendation, I checked Stock profile. Out of last 7 days, only one day big fall, and all other days its consolidating. So, does not fall under 7 day fall.
Checked delivery : Increased % of delivery for last 1 week, indicating upside.
Volume Profile shows, big buyers around 710.
Option Skew: In spite of big fall Put premiums are not moving up, While Call Premiums are not falling indicating current fall is false .
Thus as all indicators are biased towards upside, Bought 700 call at 20, and sold at 40 today.

admin March 20, 2019 at 6:34 pm

Congratulations on a good trade.
A good trade can happen due to multiple reasons. That does not make our method wrong.
Even with right selection process some trades will go wrong.
Interesting things happen when they go right and you have been a witness to September 2018.
The method was evolved and accepted on account of it’s simplicity. We do not analyze the details. The 7 day period is at times 4 trading days or 6 trading days. We just take the details as shown on NSE website.
It works or does not work depending on how the market behaves.
Thanks for sharing your thoughts.
Reply

PRAKHAR March 20, 2019 at 6:18 pm

Sir, I’m really saddened that people don’t value your method.
Today I was reading new book by Steve burns(hugely followed Twitter trader) “New Trader-Rich trader”.
Where He was saying a 10,000$ new trader not to expect more than 20% annual return to full-time trader. After reading that statement 😂 I went for facepalm🤦‍♂️. My 500 rs for book got wasted.
Here you are making us mark minervini & Richard Dennis and people are going nuts for few bad months.
People are ignoring the power of our method which has resulted in 600% return.
Please it is a request to share all the toiling you have done to devise this method and how much money and years market has taken from you to grant this “Edge”.
Regards

admin March 20, 2019 at 6:38 pm

In the market it is your recent results which count. We have to live with the fact that recent results have not been good.
Talking about patience is easy, remaining patient with your trades is very difficult.
A method evolves after a number of trades gone right or wrong and it needs courage to stay with the method when not doing well.
Let us see how it works with 5 days now left for expiry.
Thanks for sharing your thoughts.
Reply

Jagannatha March 21, 2019 at 12:06 pm

Sir can we carry forward loss scripts(stocks) to april month in options?

admin March 21, 2019 at 12:10 pm

No.
The premium becomes zero at expiry if the option is not in the money.
In April series, we look for new trades based on the same parameters.
We may get trades in the same stocks if the trend remains the same for them.
Cheers.
Reply

arnab March 20, 2019 at 8:06 am

I personally think that we are quite late in entering, i mean buying put where the stock has already fallen a lot or buying call when the stock has gained a lot already which is causing losses. Any means we can catch the early birds might be better.
- Raveendran K A March 20, 2019 at 8:36 am
  
  I have one suggestion in this regard. Why not consider just seven day losers/gainers for selecting trading candidates instead of considering both 30 day and 7 day periods ?
  - admin March 20, 2019 at 8:45 am
    
    The method has been devised after many years of exercise. The problem with most traders are that they are looking for every trade to go right quickly even if by small margins. It has been observed that you can not make big money by taking small profits. The aim here is to be profitable in the long run.
    
    Option Buyers are an impatient lot. Ultimately they do not make money.
    
    This blog was meant to be a different approach to option buying and I intend to keep it that way. Occasional losses will come and they are to be taken with a pinch of salt. Big profits are a key to success and we have to look for them.
    
    Thanks for the comments.
    - Rajiv March 20, 2019 at 10:10 am
      
      Sir,
      
      I absolutely agree with this method since i lost lot because i exited with small profits when market was willing to offer huge profits and when losses came they swept away my capital.
      
      My only question here is when our trade has gone south, premium starts decaying and we are close to expiry should we exit with some loss rather than losing entire investment in this trade?
      
      Regards
      Rajiv
kaushik March 20, 2019 at 9:37 am

it doesnt matter if 70 % of your trades go wrong if you are making 500% return in a year
vishal agarwal March 20, 2019 at 10:56 am

Sir Zeel is looking weak compared to the Index. Do you think it can be a candidate for expiry week trades?
arnab March 20, 2019 at 2:57 pm

Today good day, bharatforg exited at 6.8, entered at 4.7,not very good, but am thankful to come out unscathed in this crazy bull market playing put calls.
KV Rao March 20, 2019 at 5:04 pm

When I saw Infosys PE recommendation, I checked Stock profile. Out of last 7 days, only one day big fall, and all other days its consolidating. So, does not fall under 7 day fall.
Checked delivery : Increased % of delivery for last 1 week, indicating upside.
Volume Profile shows, big buyers around 710.
Option Skew: In spite of big fall Put premiums are not moving up, While Call Premiums are not falling indicating current fall is false .
Thus as all indicators are biased towards upside, Bought 700 call at 20, and sold at 40 today.
- admin March 20, 2019 at 6:34 pm
  
  Congratulations on a good trade.
  A good trade can happen due to multiple reasons. That does not make our method wrong.
  Even with right selection process some trades will go wrong.
  Interesting things happen when they go right and you have been a witness to September 2018.
  The method was evolved and accepted on account of it’s simplicity. We do not analyze the details. The 7 day period is at times 4 trading days or 6 trading days. We just take the details as shown on NSE website.
  It works or does not work depending on how the market behaves.
  Thanks for sharing your thoughts.
PRAKHAR March 20, 2019 at 6:18 pm

Sir, I’m really saddened that people don’t value your method.
Today I was reading new book by Steve burns(hugely followed Twitter trader) “New Trader-Rich trader”.
Where He was saying a 10,000$ new trader not to expect more than 20% annual return to full-time trader. After reading that statement 😂 I went for facepalm🤦‍♂️. My 500 rs for book got wasted.
Here you are making us mark minervini & Richard Dennis and people are going nuts for few bad months.
People are ignoring the power of our method which has resulted in 600% return.
Please it is a request to share all the toiling you have done to devise this method and how much money and years market has taken from you to grant this “Edge”.
Regards
- admin March 20, 2019 at 6:38 pm
  
  In the market it is your recent results which count. We have to live with the fact that recent results have not been good.
  Talking about patience is easy, remaining patient with your trades is very difficult.
  A method evolves after a number of trades gone right or wrong and it needs courage to stay with the method when not doing well.
  Let us see how it works with 5 days now left for expiry.
  Thanks for sharing your thoughts.
Jagannatha March 21, 2019 at 12:06 pm

Sir can we carry forward loss scripts(stocks) to april month in options?
- admin March 21, 2019 at 12:10 pm
  
  No.
  The premium becomes zero at expiry if the option is not in the money.
  In April series, we look for new trades based on the same parameters.
  We may get trades in the same stocks if the trend remains the same for them.
  Cheers.

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March 2019— Options Buying Again —- Day 13