The first day of the week is over.
NIFTY ended up slightly higher.
These 31 points of gains came after a sustained tug of war between the bulls and bears not before NIFTY had gone lower by 100 points twice during the day. What do we make out of this?
As far as I am concerned, nothing. Last Monday ( October 01, 2018) too, NIFTY had gone up 77 points. After that there was only lows, lows and more lows. Reading the market news is really an experience nowadays. These guys have perfected the art of writing so much without meaning anything.
We have this article on Moneycontrol today:
The problem is traders need to know what they have to do. What NIFTY has to do, it will anyway do. It will not care for you , me or writer of this article like it did not care last week. I could not make any sense out of this article. If you can, congratulations to you. But understanding will not help our trades in any manner.
So let us get back to our issues and leave the NIFTY talk to experts.
Our problem is the increased volatility. This was how the market moved yesterday.
Big fall followed by an equally big and sharp recovery. Hope turns into despair in no time with such moves. Unless you are into a trade already, such moves do not give us a chance.
Yesterday, I got SBIN 240 PUT at Rs. 3.70. It went lower initially, then went up to Rs. 4.30 with the market decline and suddenly lost value in the last part pull back. These kind of incidents will happen almost on daily basis with the current volatility. With Options at least we know our maximum possible loss beforehand. That is the biggest advantage of being an Option Buyer. Many things can hurt your profit, but nothing can increase your loss.
This is our positions as of yesterday considering HINPETRO PUT 240 as closed.
Based on Asia Markets and SGX NIFTY, market may open flat but after that it is open season. We may witness both side volatile moves. We just have to sit tight and watch from sidelines. If a trade is going bad, we wait for another day. If it does well, take steps to protect the profit.
No new trades for the day.
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.
Comments
Ankit October 9, 2018 at 8:26 am
Sir, the simplicity you use to write your articles can not be found anywhere else. Its totally commendable. I hope you have plans to write a book someday.
ReplyAmit October 9, 2018 at 9:16 am
” I could not make any sense out of this article.” – exactly, they use jargons and make the article look more sophisticated than required and always attribute it to hearsay. Your articles – so simple that even a layman can it in one read.
ReplyNathan October 9, 2018 at 11:30 am
I follow some basic rules :
ReplyDuring trading hours, I keep my TV (Business channels) OFF. Exemption : Special events like Budget day.
I keep the moneycontrol web page open to just catch any news update; not for articles on market view.
It is business for them.
As long as new investors and traders are coming to the market, the business will go on.
As experience is gained, traders will stop giving importance to them.
But again there will be entry of new traders by then.
The game goes on.
Let them do their business. Let us do our business.
Dev October 9, 2018 at 7:22 pm
Sir only this month we left tatamotors . 🙁 did u take personally this trade?
Replyadmin October 9, 2018 at 8:05 pm
I had bought a TATAMOTORS PUT every month since January whether the trade was mentioned here or not. This time I did not trade in this and it was a costly miss. So was BHARTIARTL. Another one that got away was M&M. Such things happen. We got very lucky with HINDPETRO. One or two good trades in a month are enough to stay profitable.
ReplyTime to move on.
Cheers.
MEENAKSHISUNDARAM October 9, 2018 at 8:57 pm
Sir
In the backdrop of SBI coming forward to alleviate the underdog NBFCs, whether SBIs shares will have a very good spike in the days to come?
Replytharik October 9, 2018 at 9:02 pm
Luckily I had took TATAMOTORS 210 PE bought at Rs5.8 .. I took this trade mainly because I was not able to get into M&M trade at the suggested price and it proved to be a wonderful trade.
Still holding without exiting..Mind says , would have exited when the scrip was trading around 175.
ReplyBut I prefer to stay patient with this one. Profit was given by the markets after all and I will still wait for few sessions
Nilesh S October 9, 2018 at 11:22 pm
I had taken 2 lots of TataMotors 200 PE but somehow exited from both of them yesterday as didn’t keep patience..proved to be Hugh miss..
ReplyBut as Pramod ji mentioned we need to move on..