Sooner or later there had to be a reversal. Market could not be in a down mode forever. So the bulls came back yesterday. They did not win easily. It was a big fight.
NIFTY went down by about 75 points and then went up by 75. Again the bears pressed the button and took it back to 50 points down levels. Bulls reappeared in the last one hour and won the tug of war decisively and took NIFTY higher by more than 100 points. NIFTY closed positive after 5 losing sessions.
NIFTY did what it did.
It impacted some of our trades and did nothing for some of them. More important fact is volatility and how it affects our own behaviour. Traders have to live with the these kind of moves and take the decisions whether right or wrong.
Greed and Fear :
IBULHSGFIN PUT 1160 had closed at Rs. 183 on Monday.
Yesterday too the stock had opened week. For a long time it was in the range 900-925. But there was no trade in this PUT. Suddenly the stock dropped 10%. Then it went down sharply to 786. I could have put in an order for about Rs. 360 and most probably it would have been traded. The high price till then was Rs. 329.
Here greed keeps in. I thought I should sell at Rs. 400. After all I have to do nothing but wait which I have been doing for last one week.
From the low the stock reversed and recovered almost entirely when it came to 960 level.
It is where fear comes in.
It looked like that PUT 1160 will go lower than yesterday. That did not happen anyway and the low price for this option was Rs. 220. My fear became the dominant feeling and I sold it at Rs. 230.
Greed prevented me from selling at Rs. 330 and the fear made me do it at Rs. 230.
This is how emotions affect your trading. And everyone is susceptible to emotions. I may teach and I may preach but I may do the same what everyone does sometimes.
That does not make the teaching wrong. We have to try to control our emotions as much as possible.
It still remains a good trade. PUT 1160 was bought at s. 13.50 and sold at Rs. 230.
Trade Positions :
This is how the position looks now with IBULHSGFIN trade closed. All other trades have been retained whether losers like SUNTV or gainers like PNB.
Looks very good and it is time to close the trades as best as possible.
Closing the Trades :
SGX NIFTY is higher by 66 points as I write. That is not a good indication for our trades. But we never know. The 100 point gain in NIFTY yesterday did not affect our trades, probably we got lucky.
Let us start closing the trades in the manner learnt depending on what suits a particular trade.
Move to lower strike.
Buy a protective call.
Just exit and do not worry about it.
With two trading days left these are the methods we can use to close the trades.
No new trades 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.
Saket September 26, 2018 at 8:53 am
“I may teach and I may preach but I may do the same what everyone does sometimes.” What an honest confession! Pramod-ji, you are not just a good teacher but a good human being too…Reply
Alok Chaudhary September 26, 2018 at 9:07 am
Sir how come profit in HindPetro is 24200. Invested amount is 3465, LTP 6.80 so current value 1575 * 6.80 = 10710 profit = 10710 – 3465 = 7245.Reply
admin September 26, 2018 at 9:13 am
Thanks for pointing out. Corrected.Reply
mangesh September 26, 2018 at 11:00 pm
I could see jet 260PE ‘s LTP is 67.65
admin September 26, 2018 at 11:05 pm
We had taken exit from this trade when crude oil price had gone down. Did not enter the trade again as the other trades were doing alright.Reply
We miss some and we get some.