This blog came to life on January 21, 2018.

The first few posts were about F&O Workshops and trading in general. From May 2018 F&O Series I started writing about options trading. The method of selection of stocks and strike price was shared for all the trades and over a period of 9 months , the method has worked wonderfully.

This post is written specially for the new readers so that they can experience the journey at a single point rather than going through all the previous posts.

May 2018 :

It was with great trepidation that the Option Buying Series was started. We had 4 trades out of 11 correct. This resulted into the month being profitable.

Well begun is half done. The first step in this long journey determined the way forward.

The trades and result for the May 2018 Expiry are shown here:

June 2018 :

Options Buying is never without the attendant pain and despair. High on the profit in previous month, we thought we had found the key to sure profits. Market decided to teach us the lesson in patience and tested our patience to the extreme. The month had 20 trading days and we were in loss after Day 18.

In such a despondent situation I looked for new trades on Day 19 and 20.

This was the result obtained from additional trades:

The profit from these trades was around Rs. 30000.

At the same time, the other options which were in a losing position turned profitable in these two days and yielded a profit of Rs. 55000.

The lesson learnt from these trades is that options can change suddenly and one must not close positions in a hurry as long as the underlying price is close to the Strike Price.

Other trades in June:

We could end the second month also in profit. The profit from two months was above Rs. 1.50 lakhs.

July 2015 :

The performance of our options in the last two days of June Series bought more readers to this blog. Readers started taking the selection process a little more seriously.

Our trades did well initially and within a few days we were looking at a profit of near Rs. 1, 40, 000. Again it was time for a lesson in humility. We had 15 PUT trades and market started moving up. It went up and up and our profit kept going down. We could still close the month in profit even when only 5 trades out of 15 were right.

July gave a profit of around Rs. 42000.

In three months, we were ahead by about Rs. 1.95 Lakhs by way of profits.

The three months of profit gave more confidence that our method works. We approached August 2018 with more hopes than earlier months. There is no intoxicant like success and we were really high.

August 2018 :

Wheels of fortune are unremitting. They bring you up and then bring you down. Hope are despair are the two faces of the same coin. Buoyed by the success of the past three months, we thought of a two pronged approach to our trades in August. Call Buyer Trades and Put Buyer Traders and the expectation was that we will make money on both sides.

Like best laid plans of men and mice, this plan too went awry right from the beginning. Day after day the trades kep going wrong. Every small glimmer of hope was curbed by the opposite moves next day.

The euphoria of the past success turned into gloom very soon.

It was tough to bear with the losses. Winners have many friends, losers have to fend for themselves. It was fortunate that the readers did not lose faith though some doubts must have surely crept in.

August was a total loss whether it was CALLS or PUTS.

Nearly Rs. 98000 were gone in this disastrous month.

Those readers who had followed the trades in earlier months had seen some profits and were mildly concerned with this turn of events.The new readers found the old saying come true— Option Buyers Never Make Money.

It is difficult to keep the belief when you are losing.

I had been through similar situations earlier and was convinced that bad times will soon go away but the new readers must really have felt bad.

Still we were in profit after 4 months. In option buying even a small profit is an achievement.

The loss hurt but we had to take in on the chin and move on to September trades.

September 2018 : 

There was a hit movie in the early 1960s. COME SEPTEMBER. It was a musical comedy.

September 2018 trades were music to our ears and we certainly wish that this kind of September comes again and again. As many times as possible.

After the low of August, market wanted us to find out how much profits Option Buying can give. We had two trades which individually gave profit of more than Rs. 100000. Other trades too gave very good profit and the final result was a profit of more than Rs. 400000.

Option Buyers live for such a month. Only problem is that they stop the market from giving such profit by their own action like early exit from potential good trades.

This month showed us what UNLIMITED PROFIT means. I understand that we all make mistakes and will keep on doing so but once in a while we must show some discipline to cash in good profits.

This was Come September– Music for the Option Buyers:

Well, the profit figure is really Rs. 430000.

Once again the market gods had smiled on us and we thankfully accepted the gift.

It was time to move on to October 2018.

October 2018 :

After September, there was a spring in the step. The readers had now more confidence and faith in the method. In October, we made quick profit in the beginning in the HINDPETRO PUT trade and for the rest of the month saw the profit going down bit by bit. It was very similar to the experience in July 2018.

Still ended the month profitably.

A profit of Rs. 68000 is no small change but coming after the high of September it did not look so great. But by this time, the lessons were learnt. Take what the market gives, be thankful and move on.

So we moved on to November 2018.

November 2018 :

No two months are alike. November trades went like June trades. Kept losing money. This time we had the experience. We knew that the trades can turn right any moment. Well, we knew. The market did not care for what we knew and once again, we were losing money on Day 18. With two days left, we were bracing ourselves for some loss.

Trades did turn around on the last two days and we ended the month without a loss.

A break even month.

A profit of Rs. 2000 is not something to talk about but is any day better than a loss. We did not lose money is also a small achievement. We had only 3 trades right out of 13, so the result was okay.

Time to move on to December 2018.

December 2018 :

We entered the last month of the year with hope. We always do that. Unless we have a belief that we shall be successful, we shall achieve nothing.

December turned out to be bad. There were some initial successes which were not followed through and for the second time in eight months we ended up with a loss.

A loss of Rs. 47000 closed the year 2018 for us.

The loss hurt and it must hurt. Otherwise the lessons are not learnt.

Profit in 6 months out of 8 through Option Buying is surely a small achievement. The key to profitability is keeping the losses small and profits as given by the market. We found out how nicely it works. Losses are an essential part of trading and can not be wished away. We learn how to manage them and live with them.

With this we moved to the new year 2019.

January 2019 :

Happy New Year

The new year brought about the month number 09 of our Option Buying Trades.

After a tepid November and bad December, we needed a good month. Once again the markets decided to reward us for our faith and 10 trades out of 15 went right, the best of them being ZEEL PUT 420.

Beginning the year with a profit of Rs. 178000 is a good first step. This also removes any doubts we might have harbored after November and December failures.

At the end of January Expiry, we were profitable for 7 months out of 9.

I had set out to clear the myth that option buyers are always losers. I believe that the success achieved so far should help in clearing this misconception.

The Numbers:

The numbers tell the story :

Number of Months —- 9

Losing Months ——— 2

Gaining Months ——– 7

Total Contracts  Traded —  122

Wrong Trades ————-  73

Right Trades —————-  49

These trades over 9 months ( less than 1 trade per day ) have resulted into a profit of Rs. 721833.

Conclusions :

More trades do not make more money. Only right trades do.

It is not necessary to trade everyday. We take a trade only when a trade meets our trading criteria and our defined loss limit.

We should not be in a hurry to book a profit. Let market take care of that. No trader is smarter than the market.

Our journey is not yet over. We shall continue moving ahead in the same manner. Another review shall be done after 3 months on completion of one year of this Series. If we are profitable after one year, it will be an achievement.

Keep visiting these pages. Keep posting your own views and trades. Keep sharing these posts with friends and fellow traders. Trading is a lonely business. Let us make an attempt to change that.

Many readers too have actually enjoyed similar success in this period. My heartiest congratulations to all of them.

Enjoy the Sunday.

All the best.