NIFTY had close at 11676.80 on August 30, 2018. ( August Expiry )
18 trading days later on September 27, it closed at 10977.55.
699.25 points gone. Looking at the Index, damage is not much. There was carnage in financials specially in NBFCs. Fortunately we had trades in 3 of them — IBULHSGFIN, L&TFH and RELCAPITAL. Initially we did not have selections from banking, but few days before expiry, PNB 75 PUT was included at a price of just Rs. 0.50 and it had shot up to Rs. 9.00 on the same day ( Sep 21) before closing the day at Rs. 2.60. On Expiry the PUT was at Rs. 12.50.
This was the final statement of P&L:
Total 12 contracts were traded with 3 of them ending in small losses. Those were also profitable at some stage but somehow could not be closed profitably. We booked a loss in Jet Airways and the stock went into a tailspin making new lows everyday. A costly miss but it tells us that we can not win them all.
The best trades were L&TFH, IBULHSGFIN, RELCAPITAL in that order. PNB and TATAMOTORS also added to the profit significantly.
The method of selection of stocks and strikes was same as in earlier months but the results were significantly better.
For that I would just thank the markets for giving us the profit this time. This method has been successful in 4 out of 5 months I have started writing about Option Buying trades. This should be enough to dispel the thought that Option Buyers do not make money.
The summary so far:
In the 5 Month period:
Number of Option Contracts Traded : 76
Right Trades : 31
Wrong Trades: 45
Profit before brokerage and other charges: Rs. 519181.
76 trades in 5 months translates into less than one trade for each trading day. The number of successful trades has no bearing on the result. It is what you got from a successful trade which is important.
Well, the month is over. A trader does not live on past glory. It is time to move on and hope that October too goes well.
We look for more September like experiences in future and wish that the journey be smooth.
Welcome to October series.
LN Singh October 1, 2018 at 7:38 am
Excellent, keep up the good work. An excellent analysis. Unfortunately, came to know of your blog only on 18 SEP and did some paper trading.Reply
Lt Gen LN Singh
admin October 1, 2018 at 7:52 am
Thanks for the kind words.Reply