Sometimes it is good that we are not into too many trades. If all of them go wrong at same time the situation gets out of hand. Yesterday, NIFTY steamed ahead and kept moving up relentlessly for the entire day.
An up move of 132 points was finally achieved by the Index.
In 5 trading days, NIFTY has moved up by more than 300 points.
Such a move is bad for our PUT trades is a no big deal. The worrisome point is that CALL in YESBANK which had gained very smartly over last one month is not doing well as this stock is just not moving up. The 300 point up move did not do anything for YESBANK. Market can move in the ways we will never understand. All the trades have to be based on this understanding.
Looking at the Profit/Loss Chart does not give a good feeling as the options have already lost 60% of the value. But life is about taking the bad with the good and so is trading. We take our losses sportingly.
This is how it looks at present.
Well, we expect the picture to get better sooner or later.
New Trade for the Day :
One of the stocks which has not been helped by the market up move is DRREDDY.
This stock is down 5.72% over the 30 day period and in the last 7 day period too it has shown weakness by moving from Rs. 2654 to Rs. 2626.
That makes it a good candidate for buying a PUT.
We go for PUT 2500 @ Rs. 25-28. Lot Size is 250 and maximum risk is capped at Rs. 7000.
We had seen a freak collapse in this stock in February month when it made a low of Rs. 1872.95 on February 15, 2019. Even a half way move of that kind will do the trick for us.
DRREDDY PUT 2500 would be our fifth trade for this month. Let us hope that things start getting better now.
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.