On October 25, 2018, ( October Expiry ) NIFTY had closed at 10124.90.

After 16 days of trading, it closed at 10763.40 on Monday, November 19.

It has moved up by 638.5 points ( 6.3% ) which is really a very big gain.

I have seen in the past that NIFTY gains are delusional. Surely those of us who buy PUTS are losers in such situations but those buying CALLS also are not in very good positions unless they have been lucky with some of  their trades. Life is tough for Option Buyers and this is a lesson we learn every day.

On Friday, we were upbeat even when NIFTY had moved up because stocks like RELINFRA and IBULHSGFIN decided to stay lower.

Yesterday every stock moved up whether it was RELINFRA, SUNTV or TATAMOTORS. MARUTI and M&M are already so far gone that the hopes from them are vanishing now. Only IBULHSGFIN  helped us yesterday. With each day passing and market direction just going away from us, the situation has come to a point which is alarming.

The chart above tells about the not so happy situation.

I can take consolation from the fact that 5 out of last 6 trading months have been profitable and a second losing month is not going to hurt in a big way. But before retreating let us examine the situation.

RELINFRA is not very far from being ITM. It has enough volatility to be in the profit at some time in future.

Same is the situation in TATAMOTORS and IBULHSGFIN.

As and when more trade other than these three turns around our day is made. Giving up hope in option trading leads to a certain loss.

Remember June series. Anything can happen.

On our part, we shall do well to limit our exposure by not entering more trades till there is satisfactory exit in some of the current trades. We are in tough situation with 7 trading days left to expiry and look forward to come out of the situation better than where we are now.

We can take some consolation from the fact that US markets were down in a big way yesterday. Asia Markets are in the red this morning and SGX NIFTY is trading down about 40 points. Maybe a negative trend in NIFTY ( If it actually happens ) can work in our favor today.

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.