March 2019— Options Buying Again — Day 16

A day that raised our hopes a little and then dashed them.

Nifty went down sharply and stayed down. Closed 102 points lower.

With 6 PUTS in hand and 2 of them near the money/In the money, it looked like our position will improve. Life in the market specially for option buyer is not so straightforward.

Calls went terribly wrong. Can’t blame them, there was a big down move.

It is the PUTS that spoiled the status. HEROMOTOCO made a new 52 week low and we had a right to expect more down side from there. It came back.

MARUTI did not make new low but we did not need that. It went below Rs. 6500 but closed a little higher at 6522.

Such moves take away the premium and now the time has almost run out.

The move yesterday reminded me of a very old English movie.

It was a simple comedy. A cab driver thinks that he is likely to have a good time with the lovely lady ( Sophia Lauren ) but suddenly finds that he is being robbed by lady’s friends.

For us also, the lovely lady (the market ) gave the feeling of a good time but her friends ( the options we had bought) actually robbed us.

The name of the movie describes the market perfectly for us at most times— Too bad, she’s bad.

Truly it was bad yesterday.

This was the status at the end of the day.

We look towards both MARUTI and HEROMOTOCO to still do well for us. Let us hope that they do.

New Trades :

Some of the readers have suggested a trade in ZEEL for last few days.

Now its meets the parameters.

I know some will say that we are late in entering the trade but that is nature of trading. We need a picture to emerge. We get the right signs now.

ZEEL PUT 400 @ Rs. 4.00- 4.50 can be a good trade. Lot Size 1300, maximum risk Rs. 5850.

Trade profitably, trade cautiously.

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 26, 2019 at 8:41 am

Loss of 38k out of 58k in options spread over 7-8 options is not good at all. Sir, i think you should tweak your strategy a bit. Hoping the God’s will bail us out each time should not a good strategy, it leaves a lot to improvement.

admin March 26, 2019 at 8:49 am

Dear Arnab,
Thanks for sharing your thoughts.
It is the lack of belief in your own methods which leads to losses over a period of time. I have been trading with this method for quite sometime and have no regrets. I am not looking for profits every day or even every month though that is a desirable goal.
We have been in worse situations than this even on this blog.
Leaving everything to God actually works better than any strategy devised by men. In life or in market.
You are welcome to your views.
Reply
- arnab March 26, 2019 at 10:49 pm
  
  8074783641 if it helps.
  
  Thanks
  Reply
Ketan Thakur March 26, 2019 at 8:45 pm

How to get in touch with you arnab? Ping me on 7219396444 pls. Need help and advice from you.
Reply
- arnab March 26, 2019 at 10:50 pm
  
  8074783641 if that helps anyway
  Reply

KV Rao March 26, 2019 at 6:23 pm

Does this Strategy pass Taxman where F&O Trades are assessed based on Losses+Gains

vishal agarwal March 26, 2019 at 9:13 pm

Sir when you are in front of trading screen during the market hours, do you get tempted to trade more? Like seeing Nifty or any other stock going in one direction do you try to make quick bucks?
How do you follow the discipline to not trade on so many days even while sitting in front of screen?

admin March 26, 2019 at 9:17 pm

Temptation is always there. But the fact that the money can be lost keeps the tempting thoughts away. Trading is not about excitement and adventure. It has to be dull and boring to be effective.
I have learnt the discipline after many years of practice.
Cheers.
Reply

MR March 26, 2019 at 10:02 pm

Sir . Looks market will swing both sides.. until election results. Strangle startegy on index.. we need to plan… My 2 cents😁

Ravikumar March 26, 2019 at 10:53 pm

Sir, this is not to be published. No need to give space for criticism in your blog. No one ask people to follow your trade. They visit your blog or trade along with your lessons in their own. Their disbelief will disturb others and people may align with them to question you. You have no obligation to answer their thoughts. And also one thing sir. Some one used your space to connect with other people. I was wondered that you gave it a pass. That’s not right . You must not entertain this. I remember the story of the Arab who gave some little space to a camel . You know what happened there after.

admin March 27, 2019 at 9:09 am

Criticism is always good. It keeps you alert and on your toes. Same people also heap compliments when trades do well. One has to take good with the bad.

Thanks for your comments.
Reply

Gourav Basu March 26, 2019 at 11:57 pm

Although losses, few of the trades which could have been avoided this month are(as per my opinion)

1. HPCL- we were already in the HPCL put 210 trade last month, which did not give us any profit as the trend had reversed during the end of the month. So taking the same trade this month at the very beginning of this month, seemed quite strange.
2. Yes bank-While taking the trade, the stock had gained about 30% last month. So taking an OTM call and expecting to make a decent profit would require a significant upmove this month also( 15-20% gain), which seemed a bit unrealistic.
3. Hero Motorcorp- Same story as Yes Bank. Put option in this stock had given considerable profit for two consecutive months as it had a very large decline in Jan and Feb. Expecting this stock to decline significantly in the third month also, is a herculean expectation. At best, the put 2600 would have worked better if it were exercised after a brief upmove in this stock and not the very beginning of this expiry

vishal agarwal March 27, 2019 at 7:53 am

It is very much expected to see critisim in a losing expiry. Nobody doubted on M&M last month which fell from 800 to 670 in Jan but we again bought put in Feb because it worked very well to make further lows. It reminds me of the indicator RSI. People might say your trade did not worked out because RSI was oversold. However the inventor of RSI never said that an oversold stock cannot fall further. As such indicator is bounded by 0.

Tharik March 27, 2019 at 9:13 am

Dear Pramod Sir,
Despite of so much of criticism, I am happy to see that you are keeping the blog alive. We know for the fact that keeping the hopes on a trading system (which involves money) is a tougher task than keeping the blog alive. Astonished with the way you are showing stubbornness on belief in your trading system, which only a handful of traders can possess. Keep up the good work Sir.

admin March 27, 2019 at 9:28 am

Thanks Tharik for sharing your thoughts.

A method which has been working for me for quite a long time and delivering results, why should I give up on that. I can not force others to have the same belief because they have not seen the profit part. In the market you are good only if you are making profit today. Nobody cares what you did in the past.

Cheers.
Reply

arnab March 26, 2019 at 8:41 am

Loss of 38k out of 58k in options spread over 7-8 options is not good at all. Sir, i think you should tweak your strategy a bit. Hoping the God’s will bail us out each time should not a good strategy, it leaves a lot to improvement.
- admin March 26, 2019 at 8:49 am
  
  Dear Arnab,
  Thanks for sharing your thoughts.
  It is the lack of belief in your own methods which leads to losses over a period of time. I have been trading with this method for quite sometime and have no regrets. I am not looking for profits every day or even every month though that is a desirable goal.
  We have been in worse situations than this even on this blog.
  Leaving everything to God actually works better than any strategy devised by men. In life or in market.
  You are welcome to your views.
  - arnab March 26, 2019 at 10:49 pm
    
    8074783641 if it helps.
    
    Thanks
- Ketan Thakur March 26, 2019 at 8:45 pm
  
  How to get in touch with you arnab? Ping me on 7219396444 pls. Need help and advice from you.
  - arnab March 26, 2019 at 10:50 pm
    
    8074783641 if that helps anyway
KV Rao March 26, 2019 at 6:23 pm

Does this Strategy pass Taxman where F&O Trades are assessed based on Losses+Gains
vishal agarwal March 26, 2019 at 9:13 pm

Sir when you are in front of trading screen during the market hours, do you get tempted to trade more? Like seeing Nifty or any other stock going in one direction do you try to make quick bucks?
How do you follow the discipline to not trade on so many days even while sitting in front of screen?
- admin March 26, 2019 at 9:17 pm
  
  Temptation is always there. But the fact that the money can be lost keeps the tempting thoughts away. Trading is not about excitement and adventure. It has to be dull and boring to be effective.
  I have learnt the discipline after many years of practice.
  Cheers.
MR March 26, 2019 at 10:02 pm

Sir . Looks market will swing both sides.. until election results. Strangle startegy on index.. we need to plan… My 2 cents😁
Ravikumar March 26, 2019 at 10:53 pm

Sir, this is not to be published. No need to give space for criticism in your blog. No one ask people to follow your trade. They visit your blog or trade along with your lessons in their own. Their disbelief will disturb others and people may align with them to question you. You have no obligation to answer their thoughts. And also one thing sir. Some one used your space to connect with other people. I was wondered that you gave it a pass. That’s not right . You must not entertain this. I remember the story of the Arab who gave some little space to a camel . You know what happened there after.
- admin March 27, 2019 at 9:09 am
  
  Criticism is always good. It keeps you alert and on your toes. Same people also heap compliments when trades do well. One has to take good with the bad.
  
  Thanks for your comments.
Gourav Basu March 26, 2019 at 11:57 pm

Although losses, few of the trades which could have been avoided this month are(as per my opinion)

1. HPCL- we were already in the HPCL put 210 trade last month, which did not give us any profit as the trend had reversed during the end of the month. So taking the same trade this month at the very beginning of this month, seemed quite strange.
2. Yes bank-While taking the trade, the stock had gained about 30% last month. So taking an OTM call and expecting to make a decent profit would require a significant upmove this month also( 15-20% gain), which seemed a bit unrealistic.
3. Hero Motorcorp- Same story as Yes Bank. Put option in this stock had given considerable profit for two consecutive months as it had a very large decline in Jan and Feb. Expecting this stock to decline significantly in the third month also, is a herculean expectation. At best, the put 2600 would have worked better if it were exercised after a brief upmove in this stock and not the very beginning of this expiry
vishal agarwal March 27, 2019 at 7:53 am

It is very much expected to see critisim in a losing expiry. Nobody doubted on M&M last month which fell from 800 to 670 in Jan but we again bought put in Feb because it worked very well to make further lows. It reminds me of the indicator RSI. People might say your trade did not worked out because RSI was oversold. However the inventor of RSI never said that an oversold stock cannot fall further. As such indicator is bounded by 0.
Tharik March 27, 2019 at 9:13 am

Dear Pramod Sir,
Despite of so much of criticism, I am happy to see that you are keeping the blog alive. We know for the fact that keeping the hopes on a trading system (which involves money) is a tougher task than keeping the blog alive. Astonished with the way you are showing stubbornness on belief in your trading system, which only a handful of traders can possess. Keep up the good work Sir.
- admin March 27, 2019 at 9:28 am
  
  Thanks Tharik for sharing your thoughts.
  
  A method which has been working for me for quite a long time and delivering results, why should I give up on that. I can not force others to have the same belief because they have not seen the profit part. In the market you are good only if you are making profit today. Nobody cares what you did in the past.
  
  Cheers.

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March 2019— Options Buying Again — Day 16