The up move of NIFTY continued unabated for the fourth day this week. It was relentless one way move. The November series began with NIFTY at 10124.90 and closed at 10858.70. A gain of 734 points. A huge gain indeed.
With the kind of gains in NIFTY, PUT buyers never had a chance. Ask those who bought NIFTY or BANK NIFTY PUTS.
We were fully loaded with Puts this month. These were taken based on weakness seen in the stocks at the time of entering the trades. As the volatility was high throughout the month, premiums paid were high. Some of the trades went wrong outright. Some went in the desired direction but not to the extent required. Such trades ended up losers.
At the end of trading on Tuesday, we were looking at a loss of Rs. 45000.
With that position, three new trades were taken on Wednesday. Two of them proved to be the real heroes of the month.
YESBANK was extremely volatile today and made a new low of Rs. 146.75. At this point, PUT 175 touched a high of Rs. 27.50. Then the stock reversed direction and moved up to Rs. 167. Finally settled at Rs. 160.25. Not a trade for the people who get nervous. For the sake of record, I have considered exit from this trade at Rs. 22.00.
ONGC went down sharply as the market opened and again made a new 52 week low. PUT 145 was traded at a high of Rs. 7.00. For a long time, it was between Rs. 5.00 -5.50. Exit from this trade is considered at Rs. 5.00.
IDEA too did well throughout the day. Exit is taken at Rs. 3.00.
IBULHSGFIN too gave some profit though it lost some compared to previous day.
TATAMOTORS PUT 180 ended at Rs. 2.75. It was higher at times but we can not win all the time and accept what the market gives.
Every other trade ended worthless and a loser. Profit from these 5 trades ( Actually 4, TATAMOTORS is a slight loss) recovered the loss of Rs. 45000 which we were facing two days ago. We end the month without a loss.
Not a very big profit but surely it beats being a loser. Out of 13 trades, only 4 are right. We got some salvaged returns from 2 trades and 7 of them went absolutely wrong. And this is in a month when NIFTY went up by more than 700 points.
The summary since May Expiry:
Number of contracts traded: 99
Wrong : 61
Right : 38
Profit : Rs. 590251
There has been one losing month out of seven months so far. For November series we just escaped narrowly.
We live to fight another day another month.
Every month teaches us new lessons and it is our responsibility to learn and practice. Perfection arises out of practice.
We move on to December Expiry. We shall be doing same things again, making selections based on strength and weakness and taking about 12-15 trades during the month. Same boring method but we should not be complaining. It delivers results. Let us hope results are better next month.
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.