On Friday, NIFTY opened lower and then after a brief while made a sharp up move and stayed up.
As far as our other Options Trades are concerned this move came at a very wrong time when almost no time is left for June Expiry. That is the matter for another post.
We had started with a PUT spread with a negative bias.
NIFTY 10800 PUT was a BUY and NIFTY 10700 PUT and NIFTY 10400 PUT were the SELL.
This set up was possible at a credit of Rs. 4.50 based on the Thursday ( June 21) closing prices. It was very much feasible to get those prices on Friday morning, so the trade is considered as done for the purpose of illustration of strategy.
We were wrong in NIFTY direction on Friday.
From 10741 on previous day, NIFTY moved to 10821.
All the PUTS lost value due to trend going wrong.
As we are in 1 BUY and 2 SELL trades, the loss in 1 trade gets balanced by the gain in the other 2. That makes us safe.
PUT 10800 closed at Rs. 125.
PUT 10700 closed at Rs. 91.95
PUT 10400 closed at Rs. 35.75.
If the positions are closed as it is we are in a minor loss of 2.70 points.
Such minor variations will keep on happening but if we keep on going wrong, all the 3 Options will expire worthless and there will be no loss.
For being in profit, we have to be right in the direction of NIFTY move.
That situation will be analyzed when NIFTY moves below 10800 again.
Here are the prices for our Options:
We actually do not have to do anything until NIFTY is near 10500 level.
Till then stay calm and cool. Do not worry about 50-60 points up or down moves. You are not going to get a profit of more than 100 points and there ia very small likelihood of a loss of any kind unless NIFTY takes a dip of 400 points in a single day. Not a very likely scenario at present.
We shall review again based on closing price on Monday ( 25 June, 2018 ).