Tuesday, July 20, 2021 was a bad day for our set of trades.

This is what BANKNIFTY did for the day.

All our 3 stocks were losers and the sold PUT values kept going higher.

Bought PUTS in BANKNIFTY could not compensate the loss. The reason is simple — ITM options gain value faster. Sold PUTS have become ITM whereas bought PUTS are still out of money.

Will this trend continue?

If it does, there may be some more trouble. If the trend reverses, we may get out of the mess.

Let us see where we stand at close on Tuesday:

MTM loss of Rs. 23694 is not the place where we wanted to be. We had entered the week with a MTM profit of Rs. 3900. This kind of loss is unnerving and causes doubts about what we are doing.

This is the time when we need the belief most. Belief in our method or strategy. We have made profits in 17 out of 20 months so far. At worst, we will get a losing month. Nothing works forever.

If it does not work in July series, it will work in August. We just continue with the setup.

With SGX looking good this morning, I hope that HDFCBANK, KOTAKBANK and ICICIBANK too will rise and shine today. If they do, maybe we will crawl out of the mess.

We do nothing and wait for the day’s action.

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.