Yesterday was the day when hope triumphed over foolishness.

Even if it happens for a day, it brings some relief from the troubled position our trades had got into.

The day did not begin well for NIFTY and after some time it got worse. Recovery happened in the later part of the day and finally it closed just 50 points lower.

Yesterday NIFTY took a break from making new highs.

For us it was the UPL stock which raised the hopes.

This stock fell to a low of Rs. 416.10 from the previous close of Rs. 492.60.

PUT 400 went up to a high of Rs. 23.10.

Last traded price on December 09 was Rs. 0.90.

What a change?

Is it a black swan event?:

A 11-12% fall and people start explaining it terming it a black swan event.

Why the fascination with such terms, that too only when a stock falls. Just two days ago, we had this move in CANARA BANK:

On Dec 08, it moved up from Rs. 117.40 to Rs. 140.85. A gain of 19.97%. Canara Bank did not invent some new technology, nor did its borrowers came back with truck loads of money to repay their loans. It was just a up move for some good or not so good reason for the day.

On December 09, a high of Rs. 146.65 was touched and the low of Rs. 120.25 was seen yesterday.

A gain of Rs. 23.45 in a day followed by a loss of Rs. 26.40 ( between high and low ) in next two days. Which of the two should be called a black swan event.

Let us avoid the jargon. There are already too many confusing things in option trading. Why add more to that?

Caution here.

I did not book the profit as I was looking for more. Greed and fear rule the market and I am no exception. If some readers took a profitable exit, congratulations to them. Their patience with a trade which had gone almost worthless finally paid off.

The position may change tomorrow for better or worse. We can know that only by staying in the trade.

Not very long ago, on November 04, 2020, UPL had traded at Rs. 399.00. While buying this PUT I had expected the price to go lower than that level. That thought had proved absolutely wrong and we saw the price going up ever since the trade was taken.

Other trades too chipped in by adding some value.

Position at end of day:

Well, we can breathe easy for a day.

Let us see what the day brings for us.

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.