Update. No new strategies

Market has reached oversold range. PCR is around 0.72. This is clear signal that market may give bonce back tomorrow morning before the D-Day and prepare itself to face the D-Day. Lot of short built-up and may show short covering tomorrow. Also rollover should take NIFTY in north direction. But this is mere anticipation and finally market would do what it ants to do.

No new positions, strategies. Now wait and watch. Hexaware gave one more opportunity today to book profit but it was for few minutes before one could realise, it changed the direction!

IFCI strategy created possibility to book profit. Also profit could have been booked in Bharatiartl lottery strategy. One could exit 320 CALL and keep 280 PUT.
Hope other tickets pay, if you have taken one. 
Keep booking profits in lottery tickets as and when you see it. Don't wait till expiry.


Disclaimer: This blog does not take any responsibility of your profit/loss

New strategies

Normally last week or mainly last two/three trading days of the month are governed by option table.
PCR has gone in oversold region and hence market shows bounce at 5830. This range between 5810-5830 has become very crucial level for market.
FII were again very subdued today and ended up very small quantity buying by their standard in cash and sold huge in future. This will have reminiscence tomorrow and could be gap down opening.

If you have short positions it is better to put limit before market opens to get advantage of probable gap down opening.

Some more lottery tickets, but do this very cautiously, only if it is permitted in to your this month's profit. Otherwise forget it. Market is going to stay and so do we.

Buy BHARTIARTL 320 CALL at 2 and Buy BHARTIARTL 300 PUT @ 2.5.
One should be extremely unlucky for closure of BHARTIARTL between 298- 322 at expiry.

Buy DLF 280 Call at 2.75 and Buy DLF 260 PUT @ 1.35
Maximum investment about 4000 and which could be maximum loss. One can gain profit from high volatility if stock closes below 256 or above 284. And this is very likely. There are more than 60% chances that it could cross borders.

Update and one new strategy

Market may take support and bounce back at around 5810-5820.
Though overall trend is negative, in layman terms, this budget before election should be positive for the industry and market may cheer outcome of the budget.
On the other-hand FII again had very low volume, cautious trading on Friday and that reflected in total trading volume. Liquidity has reduced and maybe everybody is waiting for the D-Day.

Better to stick to the trades mentioned on Friday.
In NIFTY, Buy above 5830 with SL 5810 and Sell below 5800 with SL 5820. If it breaks support 5820 on EOD level then it can go down much faster and could rest at 5700 or even lower. However, breaking this support on EOD levels is must otherwise there is potential for upside up to 6150.

No new option strategies but one combination of option and future strategy.
DLF is trading around 281/283 and could experience selling pressure.
So Buy DLF 280 CALL at Rs.6 to 7 and sell DLF Future around 281-283.
Maximum lass could be Rs. 5000-6000 but if in case market falls, such atypical trader stock would go down very fast in the range of 260-265 and could give handsome profit.

Disclaimer: This blog does not take any responsibility of your profit/loss

Few low risk high reward trades ahead of budget

Some of the option trades really did well this month, but still TCS, IFCI are going in opposite direction even after broad market has gone down.
Today after some gap FII did huge buying in cash, this is positive signal for the market. Trading volumes also were very good today after about a week. Everybody is expecting huge turmoil in market on budget day. So on this background below are some option strategies.

If one is prepared to risk of Rs. 3000 then
Buy BHARTIARTL 280 PUT @ 1.50-1.70 and Buy BHARATIARTL 320 CALL @ 1.40-1.70.
Maximum loss will be about 3000/3500 but has huge, unlimited profit potential. The stock is highly volatile, in down trend already, may show some bounce back due to oversold conditions though. On budget day there is possibility about some announcement in telecom sector and if it is negative then stock can again see levels of 265-255. This is very good risk to reward ratio, if someone is prepared to forgo Rs. 3000 in case unfortunately stock closes between 280-320 on the day of expiry.

If someone can risk about 8000/-
Then even better strategies
Buy HDIL 65 PUT @ 1.0-1.25 and BUY HDIL 70 CALL @ 1.0-1.25.
HDIL is near long time support, if it breaks on budget day then it would fetch handsome profit. Lower side it could go up to 52-54

Another good option  is JPASSOCIATE
Buy 70 PUT @1.50-1.60 and Buy 75 CALL @ 1.0-1.25.
Again maximum loss could be around 8000/8500 however unlimited profit potential. In case market goes down on February 28, JP will struggle to maintain its present long time support of 64.

I just chose high beta stocks who suddenly showing lot of increase in implied vitality. I expect them to do wonders at budget day!

If someone wants to trade NIFTY,
BANKNIFTY looks attractive
BUY 12000 PUT between 90-110 and BUY 12100 CALL @ 90-120. Maximum loss around 5000/- unlimited profit potential!

But market is ultimate and generally does something which is unexpected. If all stalwarts are talking about big movement, market could stay subdued and surprise everybody, so take the risk which is manageable within your profits this month. 

Let us be strategic and not gamble. In trading there is very thin line in this two words!

Last but not the least one low risk trade next couple of days. If you get DISHTV 65 PUT between 0.65-0.55 Buy it, maximum risk will be Rs. 2400, Target 2.1.

Disclaimer: This blog does not take any responsibility of your profit/loss

IFCI and TATAMOTORS

Buy TATAMOTOR 300 PUT @ 4.30 and Sell TATAMOTOR 280 PUT @ 1.00. Maximum loss Rs. 3300 and Maximum profit Rs. 6700 if TATAMOTORS goes below 280 before expiry.

Please note chances of TATAMOTORS going below 280 (before this expiry) are very low, but one can enter in to the trade for a day or two and if does not move in favored direction then book loss. It will be much less than Rs. 3300! Or if TATAMOTORS goes above 309 in cash then exit this strategy so that loss will be very minimum, not even Rs. 500/-. If it trades above 309 then don't even enter in to this trade.


IFCI took north direction, it was against my anticipation, but at this point same trade is more attractive. Now maximum loss will be Rs. 2400 and profit could 17600.
Stock  is just at the resistance line, below the cloud, high IV and touching overbought region. Here also if IFCI does not go down in next two days, exit this trade latest by Friday to minimize the loss. Also do not forget to book profit if your bank account is wealthier by 2%.


Disclaimer: This blog does not take any responsibility of your profit/loss

IFCI

Hexaware update:
This stock today crossed 85 and now had gone in upward momentum. It had once given opportunity to grab the profit. Now it seems difficult unless it gives big red candle tomorrow. Book profit in 75 PUT, set limit 0.10 and wait (hope?) for 80 PUT goes above buying price.

Bearspread strategy for IFCI.

Buy IFCI 30 PUT @ 0.75 and Sell IFCI 27.5 PUT @ 0.25.
Maximum loss 4000/- and maximum profit Rs. 16000/- if IFCI closes below 27.5 by end of the month.

This strategy has all the ingredients of atypical bearspread strategy.

1. Only 8 trading days remaining this month.
2. IV is more than 55/65
3. Probability of reaching 27.5 is near 40%
4. Though it has shown hammer on day chart yesterday, stock did not show desired progress today. So that could be the false signal.
5. Delta is -0.37 and Theta is 0.05. This is encouraging for option trading.
6. Stock is trading much below Ichimoku cloud.
7. Risk reward ratio is very good.

One need not wait till it generates 16000 profit, but as usual as soon as there is 2 to 3% profit, exit the trade.

Disclaimer: This blog does not take any responsibility of your profit/loss.

New Option Strategies

Sell YESBANK 560 CALL @ 0.75-0.95
Sell YESBANK 440 PUT @ 075-0.95

One should easily gain about Rs. 1200-1400 excluding brokerage within next 9 trading days with about 75000 to 8000 margin money. This is more than 50% ROI and this is reasonably safe.

Bearspread strategy for DLF
Buy DLF 240 PUT at 3.2 and sell DLF 230 PUT at 1.45.
Maximum loss Rs. 1750 and maximum gain could be Rs. 8250, if DLF closes below 230 by end of the month.
DLF is very volatile stock, IV is more than 45, next support level is around 231/230, so chances of DLF going near 230 can not be ignored. Statistically also there is more than 35% chance that DLF will go below 230, which is not bod for swing trading. However, it is highly advisable to exit this strategy if there is more than 2% gain during next three/four trading sessions.

Disclaimer: This blog does not take responsibility of your profit/loss.

JINDALSTEEL

Sell JINDALSTEEL 440 CALL @ 1.10-1.20
This is easy money.

Risky trade: Sell JINDALSTEEL future @ 387.35 Target 382.10/376.80/360 SL 399

Disclaimer: This blog does not take any responsibility of your profit or loss.

Update

KTKBANK has shown sudden spurt today, but still I don't think it will cross 190 and it will be better if one can average to secure more profit.
Market shall go up tomorrow based on global cues, FII buying. Maybe gap up opening. I still hold the view market could touch 6030 in short term but I always failed in NIFTY prediction recently and hence don't take any position in NIFTY.

I would still maintain my view on sell IDFC future and cover with 160 CALL buy. If it goes up tomorrow, this trade will become even more attractive.
Book profit in strategy if IDFC future touches 151.

Disclaimer: This blog does not take any responsibility of your profit/loss

Safe and Risky trades

Sell KTBNANK 190 CALL @ 0.50-0.55
Sell BPCL 460 CALL @ 1.90-2.10

Both stocks are in down trend and unlikely to reach at strike price before end of the month. This could be easy money. BPCL might go up a bit but still may not cross 421.

RISKY Trade: Sell IDFC future at 155.50 tgt 151/149.55.

And if it goes below 148 then it can easily see levels of 125/127 in next few days. Those who want to wait and cover the risk should buy 160 CALL @ 4.20 along with selling future even at current levels around 158. Maximum loss in this strategy could be 5500/- and if stock falls till 125 it has a profit potential of 20-21 K.

Disclaimer: This blog does not take any responsibility of your profit/loss

KOTAKBANK and HEXAWARE

FIIs are still on buying spree. It is difficult to believe Indians are not having faith in market but FIIs are investing  heavily in Indian market. They did record buying on Friday. This is not very good situation though. But I guess market will react positively to this on Monday. So as usual no trade in NIFTY but more stock specific here. 

Sell 740 CALL of KOTAKBANK at 2/-
It is very easy to gain Rs. 1000/- over an investment (margin money) about 50 K in next 18 days, excluding brokerage. Including brokerage you may get about Rs. 775/-. This is 30% return on investment.
Stock is retracing from it's earlier high about 695 and it is highly unlikely that it would reach 740 in next 18 days. Probability calculator shows less than 10% chances of reaching 740 before this expiry.

Bear Spread strategy.
IT stocks HEXAWARE and TCS have gone up in recent past in spite of NIFTY going down.
However as per ichimoku cloud, HEXWARE is in strong downtrend. Stock has very high IV. It has not yet reached in overbought region as per RSI or CCI but it will not take time to do so. The stock has more potential to go towards 75 than towards 85. It has resistance around 85.50 and presently stock is trading near 81-82.

Buy  HEXAWARE 80 PUT @ 3.35 and Sell HEXAWARE 75 PUT @ 2.1.
Maximum loss 2500 and maximum profit 7500. Risk reward ratio is very good.
I would recommend exit the trade if you earn smart gain of about 3% during the week and don't wait stock to reach 75, it may not happen before expiry.

RELINFRA

Sell RELINFRA 580 CALL between 3.70 and 4.15
There is not even 15% chances that RELINFRA will close above 580 at expiry of this month. You would able to pocket Rs. 2000/- on mere Rs. 40000 margin money in next 22 days.

Market again took support on trend-line. Hence there are still hopes of NIFTY going above 6030 in next couple of days. A big gap down opening tomorrow and closing much below trend-line may negate this hypothesis. 

Disclaimer: This blog does not take any responsibility of your profit or loss.

Update and Trades for tomorrow

Continue with CALL sell options earlier. You may exit ITC if it goes down till 0.50, but I don't think it will happen tomorrow!

Market rested today on long term support level. The support line was from July 26, September 05 and November 21. The support was at about 5945, which many analysts were talking about. NIFTY did reverse from that point today. It seems, it touched two times but failed to turn in favor of bears.
FII buying is still continued in spite of market shown decline in last six days or so. So NIFTY will try to move up again till 6036/6050 levels.

1. Sell ASIANPAINT 4950 CALL between 9.80 to 10.50. This will give more than 4% return on investment in this month. Chances of ASIANPAINT closing above 4950 is just 11% based on present implied volatility in the stock. So there is 89% chance that you will able to increase bank balance by at Rs. 1000 per lot (net of brokerage) within next 20/22 days!
2. Those who have sold SBIN 2700 CALL at 8 can buy SBIN 2500 CALL @ 40-42. SL 30 Target 52 to 54.
3. Risky trade: Buy BAJAJAUTO future between 2122 to 2128 for target 2159 strict SL 2197.
4. Risky trade: Buy ICICIBANK Future @ 1184.20 target 1196/1208 Strict SL 1162

Disclaimer: This blog does not take any responsibility of your profit/loss

Update and new safe strategy

Hope readers have booked profit in DLF and JP strategies, if not book tomorrow.
Other CALL sell strategies suggested earlier are fine at the moment and no need of doing any adjustment.

Sell SBIN 2700 CALL between 7.25- 8.00. This will be one of the safest strategy. Margin money could be about Rs. 30000/- .In next about 20 odd calendar days one should able to pocket at least Rs. 1000/-  on Rs. 30000/- investment. Probability of SBI closing above 2700 in February is not even 10%

Though this Rs. 1000 gain could look small amount, however, in percentage term it is more than 4.5% per month and more than 55%/a.

Disclaimer : This site does not take any responsibility of your profit/loss.

Strategies with fixed income or loss.

Buy 280 call of DLF of February expiry @ 7.2 and sell DLF 290 call at 4.45. 

Maximum profit Rs. 7250/-

Maximum loss Rs. 2750/-

Buy JPASSOCIATE 80 PUT which is trading at Rs. 2.70. and sell 75 PUT @ 1.30. 

Maximum profit: Rs. 14400/-

Maximum loss: Rs. Rs. 5600/-

It is advisable not to wait till you see maximum profit. Kindly note probabilities of closing these stocks at outer limits are less than 25%. But since there are more than 90% chances that spreads will at least once reach in to reasonable profit (2% on investment) territory, it is worth entering in to these trades. Please book profit as soon as you make at least 2% in these trades.  

Disclaimer: This blog does not take any responsibility of your profit or loss.

Less risky strategies for the month of February 2013

Sell Reliance 960 CALL @ 5.00
Sell TATAMOTORS 340 CALL @ 2.15
Sell ITC 320 CALL @ 3.10
Sell TCS 1450 CALL @ 4.50
Sell DLF 320 CALL @ 2.00
Sell LT 1700 CALL @ 7.50

Approximately INR 175,000 investment should fetch you around INR 12000 net of brokerage. This is more than 80% return/a!

Disclaimer: This blog does not take any responsibility of your profit/loss