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.