We are into the last day of trading for March 2019 Expiry Contracts.
Yesterday, NIFTY was down slightly. On the face of it, the fall was just 38 points.
It did not come in a straightforward manner. At one stage NIFTY was up 60 points. It stayed within a range up to 1:30 pm and then took a dive. There was some recovery towards close.
Yesterday I had written that it is becoming very difficult to make a guess about the market direction. The day proved it.
HEROMOTOCO made a new 52 week low again at Rs. 2535 but for us it is too little too late. We need the stock to be below 2500 to give us anything. Or we can cash it out for Rs. 5-10 depending on how the trend is. I will stay with the trade till the end. Salvaging Rs. 1000-1400 is not going to make a significant change in profit/loss equation.
YESBANK was the hero yesterday. Even when NIFTY was falling sharply, this stock stayed positive. I hope it continues the strong performance today as well.
MARUTI has done well so far for us. Another 2 % fall from here would be welcome.
The villain of the day for us was RELIANCE. After a gain of more than 3% previous day and touching Rs. 1377 yesterday, it just kept going down.
Other stocks anyway were not doing much for us.
With all these moves yesterday, our loss reduced by some Rs. 13000 . Not a happy position but better than what it was a day earlier.
What to do today ? :
Trading on expiry day is always difficult. Trades can go right or wrong in the blink of an eye. We have to be very alert and careful. Be watchful for the profitable trades i.e. YESBANK and MARUTI.
BIOCON too would need some proper exit if it makes some sudden down move. So would HEROMOTOCO. Other trades are already too far gone to matter much.
New Trade for the day :
Traders are an incorrigible lot. Even when the chips are down they need to play a hand or two.
We do not know which way the market will go today. There can be a strong downside or equally strong up move. I would take these two trades today:
LUPIN PUT 720 @ Rs. 2.50- 3.00. This stock made a new 52 week low yesterday at Rs. 722.30 and a down move of 1.5-2% can give good returns. Lot Size is 700, maximum loss is capped at Rs. 2100.
BHARTIARTL PUT 320 @ Rs. 2.00- 2.40 would be my second choice of a trade for expiry day. Lot Size 1700, maximum loss Rs. 4080.
Fasten your seat belts and be ready for the roller coaster ride which begins at 9:15 am.
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
Rohit March 28, 2019 at 1:47 pm
Hi Pramod sir,
Many stocks in which you have traded/recommended on this forum are going to come into physical delivery from April 2019. Next Month. Most others from July & Oct 2019 series.
Many traders will not put in the margin to take physical delivery for ITM options.
How will the trading strategy change. Please do share your thoughts. If possible in a new post for all to follow.
Post link for stocks currently in physical delivery as well as slated to come in this category:
https://docs.google.com/spreadsheets/d/1XDcruUPTawKeC7AQyoIJDN7tvT9SaLv-YuTAzjDnYI4/htmlview#gid=0
ReplyTharik March 28, 2019 at 11:24 pm
The best way to go forward is to trade in Index option, but the only problem with that is lower risk to reward ratio compared to stock options. A systematic approach may help in the longer run.
One such method I backtested on BankNifty(for the year 2018), where Monthly PUT options that were traded for around 100Rs were bought during the beginning of the series and kept till expiry. This method yielded a profit of 1800 points for the risk of 1200 points(100 per month), but there were only two profitable months. Only for people who have patience can see such profits.
This may not be the best method to trade, but even the randomness in the market combined with discipline could fetch such profits.
ReplyVIVEK DUBEY March 28, 2019 at 3:00 pm
what is the main ingredients for option buy
ReplyRamesh March 28, 2019 at 3:37 pm
Money + account with a broker
ReplyMR March 28, 2019 at 8:30 pm
Srinivas.. trade only the money you can afford to lose.. 80 percent invest in equity/MF.. rest 20 in trade…
Replysrinivas March 28, 2019 at 5:12 pm
Sir, what’s Happened to this Market? why it’s going High & High? not our trades my own trades also went wrong badly. lost huge amount this March.
Replynot only this month.. from 4yrs lost so much money. i am cursed man. how to recover? how to overcome from this trading Obsession. plz say some good words.
thank you.
vishal agarwal March 28, 2019 at 7:28 pm
Srinivas first of all you are not alone making consistent losses, there are many others who lost their hard earned money. Even our Pramod sir was in a bad situation once. Read the link to know his story and how he recovered.
Replyhttps://www.quora.com/profile/Pramod-Kumar-983/A-Method-In-Madness-Option-Trades-Simplified/Climbing-Out-Of-The-Pit-—-Step-by-Step
admin March 28, 2019 at 7:36 pm
Dear Srinivas,
There is nothing wrong with market going higher or lower. That is what market does. How we trade is more important. If you are losing continuously over a 4 year period, then what is the analysis you have done. One needs to review the trades, find the mistakes, correct them and move on. Doing the same things without a change will lead to same results.
By the way did we talk or communicate by mail at any time in the past ?
Please send a mail to teachtotrade@gmail.com with your contact details so that we can talk.
Cheers.
Replysrinivas March 28, 2019 at 10:05 pm
Dear Pramod Sir, Vishal Sir & MR Sir thank you Very much for your Kind words & suggetions. Your Words made me Happy and some relief. from today i will try to control over trading, review old trades.
ReplyPRAKHAR March 29, 2019 at 12:12 am
Pramod sir, just read the blog post down in the dumps.
ReplyAre You righting a book?
You can self-publish through kindle.
Please share with us progress about it.