No new trades on 01.01.2014

Wishing very Happy New Year.
No new trades on first day of 2014.
Keep booking profits in Apollo Tyre strategy.
Book profit in Axisbank 1450 CALL. Axis bank is showing strength now. It could go to 1365 quickly if 1275-1280 range holds.
General trend is up, but still it creates suspicion as PCR is less than 1 even after such an up-trend. It means open interest in PUT contract less than open interest CALL contract. Hence, it seems option traders are not confident about continuation of uptrend. So one should be cautious in buying till NIFTY crosses earlier high on EOD basis.

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

Update and INFOSYS

Axisbank did not go below 1278 today, if it touches 1280 tomorrow, 1350 CALL option will be priced around 27.50. One should book profit.
Hold 1450 CALL.

Book 50% profit in 6500 CALLs around 30/31
Hold 6600 CALLs.

Hold Apollo Tyre and Auropharma strategies till end of the month, or book profit whenever appropriate.

INFOSYS:
INFY is in uptrend. But it could be difficult to cross 4000 even after quarterly results.

Sell 4000 INFY CALL around 18-20. One should average after results if it goes up. Ideally, one should able to book profit before results.

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

Start with safe strategies in this series

We are entering in to new eventful year.
NIFTY might continue it's uptrend till it closes below 6160 on EOD basis.

Let us continue our mission of finding low risk option strategies. First update on Axis bank.
There is high likelihood Axis bank will move sideways/downward for few trading sessions. It might struggele to close below 1278, low of December 24. If it goes near 1278 on Monday morning, 1350 CALL would be priced near 26-27. This is first target for profit booking.

As regards to new strategies
1) Short straddle on Reliance

Sell 960 CALL between 3.50-4.00 and sell 820 CALL between 3.50-4.00. As usual short straddle must be done in multiples of two lots each for reasons specified earlier in this blog.
Delta of this strategy is presently less than 0.5%. It seems to be very safe and considering total four lots margin would be blocked around 75000/- for profit around 3000 to 4000. This is three times bank interest. There is more than 95% chance that one should able to make this 40% gain in next 30 days.

2) Sell NIFTY CALLs
Sell 6500 CALL in the range of 50-55 of January expiry
Sell 6600 CALL in the range of 24-28 of January expiry.
Again don't employ all you capital at one go but invest only 30% of capital now if NIFTY continues upward momentum we will average few lots later.

3) Iron candor on Auropharma
This could be bit costly for margin requirement as per NSE site (about Rs. 2.75 lacs), but it could be very promising as risk reward ratio is very favorable.

Buy 470 CALL at around 2.50
Sell 460 CALL at around 2.90
Sell 330 PUT at around 9.65
Buy 320 PUT at around 1.70

Check prices before entering in to the contracts, if all prices are in the ranges mentioned above then maximum profit will be more than 16500 and maximum loss could be around 3300.
So risk reward ratio is very good.

4) Apollotyre:
Sell 100 PUT around 5.95 and buy 97.5 PUT around 4.50
Maximum loss could be 4000 and maximum profit will be about 6000.




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

Axisbank

Axisbank was going up, it was based on rumor perhaps increase in FII holdings. Now news is out. Stock showed sudden spurt today and it might continue tomorrow till its recent top around 1342.
1350 CALL will be around 60 then.
Gap up opening tomorrow would help option price increase of Axisbank.

Sell AXISBANK 1350 CALL one lot around 40-45 and book profit around 25, if it goes up average with one more lot at around 60. SL 80.
More safe strategy will be to sell 1450 AXISBANK CALL between 14.5-16.

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

No new trades today

This is a kind day every option trader should dream. No pending positions on an expiry day, a descent profit more than 8 to 10 of bank FD interest already pocked this month.
Today all Asian markets are opened in green and so would do NIFTY. Most probably expiry will be near 6300 as there is lot of addition of 6300 PUTs on Tuesday and increased in open interest. These option writers will do everything to ensure expiry near or above 6300, if they could. Let us wait and watch.

We booked profit in IFCI, but there is very high likelihood that IFCI could cross 26 today and 25 CALL could expire above Rs. 1.
This turned out to be good lottery trade.
So far one could earn Rs. 5200 on investment of 1200/- in IFCI, ie more than 300 % returns in less than a week's time. It has potential to do more!

No new trades today, just sit back, relax, enjoy lost day's fun. Maybe there might not be usual huge volatility after 2 pm on expiry day, due to vacation period.

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

Update

NIFTY has reached closed to 6300 and trying to cross all time high.
Markets are in up move and discounting all negatives news. On the contrary NIFTY is searching for any positive element to to go up. Decision by oil and gas ministry was one of that case where RIL and others surged along with NIFTY.
However, now everything is behind us and now priced in. FED decision, RBI policy, RIL, etc.  FIIs are on vacation. There is no further trigger immediately. Maybe market will use this time for consolidation between 6250-6350 for some time at least till 1st week of January before next big move.

We are not taking any new trades, but selling 6350 CALL of December expiry between 17-20 could be the safest bet.There is lot of addition of 6300 PUT, this could take NIFTY beyond 6320/6325 in early hours on Monday and 6350 CALL will be available at much higher price about 25-30. Do average it then.


We are holding IDFC PUT and IFCI CALL.

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

No more new trades till expiry date this month!

Anything is possible tomorrow. Indian market continued recent tradition of over-reaction, and perhaps nothing will happen tomorrow.
NIFTY could quietly cross 6200/6250 in style tomorrow/Monday.
Hope you have prepared for fall or rise.
No more new trades till expiry date 26 December 2013. We are now left with only two trades.
BUY IDFC 100 PUT and BUY in IFCI 25 CALL.
We will hold these, and expect to gain descent profit in one of this if there is big swing.

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

Prepare yourself for mega event.

RBI Governor surprised everybody, though there is about 50 point up-move after the announcement, one should be very careful. Now there is euphoria in market, perhaps lot of domestic investors would jump in. FII sold in Futures!. IVs and option premiums of stocks are going down even after discounting for last days of the month..
One of the reason why RBI would have not hiked rate could be, in analysis of RBI, there could be high likelihood of tapering to start in December/January. If that happens, anyway there will be liquidity crunch and there is no need of rate hike to curb the liquidity. As per commentary by RBI, investors are cautioned if there is no brake on inflation, RBI anytime will hike the rate. This could mean in other words if FED does not do anything on Thursday we will do it soon!

Hold all bear and bull positions till Friday morning. Maybe buy few more OTM CALLs and PUTs if this month's profit permits.
For example buy 1140 LT CALL at around Rs. 6-7/-
buy JINDALSTEEL 260 CALL at around 2-2.50
HOLD IDFC 100 PUT or average it as it is very cheap now, if IDFC goes below 104.25 it will slide down quickly towards 101.
Buy 11900 CALL of BANKNIFTY at around 65 and buy 11100 PUT of BANKNIFTY at around 60-65.

Choose any one or two above options and exit on Friday morning.

Even if  there might not be huge impact of  taper by FED, market could show knee-jerk reaction and could show gap down opening/gap up opening on Friday morning.  Hence this preparation.

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

Update and buy OTM IFCI CALL

Market is showing downtrend before the events. Volumes are low, defensive stocks are going up. So market is all set to react to RBI policy and rate cut probabilities.
RBI announcement is expected tomorrow and FED announcement by tomorrow night, which would reflect in our markets on Friday morning.

Assuming 25 basis points rate cut is discounted and knowing past two market friendly announcements by Central bank Governor, it is more certain nothing earth shaking will happen tomorrow and one could see mere 40/50 points up move after the announcement. Main directional move will be on Friday.
In such scenarios problem for option traders is, generally premiums are very high and it becomes very unattractive for buying any contract.

This month so far has generated good profit.
Exit TATAMOTORS 410 CALL of January expiry, book profit.
Book profit in NIFTY 6400 CALL sell option of January expiry and December expiry.
Hold IDFC 100 PUT till Friday if you have generated enough profit this month.

If market goes up on Friday, banking will move up quickly and high beta banking stocks will show sharp upward momentum.

Buy IFCI 25 CALL between 0.10-0.15.
Generally one should buy ATM or ITM CALLs. But one can make an exception before any mega event, when IV is very high and could taste the water in small investment by buying OTM CALLs.
In this case, it is very small Rs. 800-1200 investment, it will pay off only if market changes direction after FOMC meeting on Friday otherwise one has to forgo this money. But it is worth investing this small amount and prepare for change in direction of market on Friday.
FED may not do anything and by not doing anything would give positive signals to market. Investors will dump money in EM markets and lot of  fund would flow to India. If this happens very soon NIFTY will again touch all time high.

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

No new Option trades ahead of policy decisons and J B Chemicals in cash

There is no point in doing something in hurry. Let us wait. Hold IDFC PUT option and it would generate good profit if market goes down.

We don't have any position in Option strategies if market goes up after FED and RBI announcements. So buy JB Chemicals in cash segment. This stock has potential to become another AUROPHARMA in near future.
Buy this stock in the range of 113-115 and prepare to hold for 3 to 6 months.

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

Update and short straddle

Everything would depend on RBI and FED for next direction of the market.
It is better not to do new aggressive trades.
Hold on to IDFC PUT for target above 6.25. Hold on to sell NIFTY 6400 CALLs of December expiry and book profit at around 8-10.

Sell NIFTY 6400 CALLs  of  January expiry around 100-102 and book profit around 40-45. These are all earlier trades. Keep booing profits in view of very volatile week ahead.

Short Straddle
Sell 6700 NIFTY CALL of January expiry between 22-24 and Sell 5700 NIFTY PUT of January expiry between 18-22.
Today Delta of this strategy is around 3.7%. Do this in multiples of two lots and enter in to trades simultaneously.
As long as delta is less than 17-18 one can safely stay foot in this strategy. If this delta value crosses 18, please prepare to exit one lot each. In 9 out of 10 times these options would end worthless and one would able to keep entire premium amount.
Total investment in margin money in 4 lots (2 CALLs and 2 PUTs) will be around 60000 and one would able to earn 4000 (or around 3500 discounting for all costs including brokerage) in next 45 days.
A fixed deposit bank interest would able to fetch about  Rs. 700-800  in 45 days over Rs. 60,000/- investment, whereas there is reasonable possibility that one would able to gain four to five times of FD's yield in same amount of time. So this strategy is one of the safest strategy. One can calculate delta and keep a track of this investment, I will also mention on the blog if in case there would be any needs to exit from this strategy.

CALL Sell strategy:
NIFTY is still trading at very high levels. It would be very difficult to cross 6700 before January expiration, even if there is fair chance that it would continue it's northward movement.

So sell 6700 CALL of January expiry at around 20-23 . Don't invest your entire capital and keep averaging if it goes up in future.

One can make combination of both these strategies and sell 4 CALLs of 6700 of January expiration and sell 2 PUTs of 5700 of January expiration. Or work with multiples of these contracts.

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

Some safe strategies for 40% ROI

NIFTY opening gap down nowadays, it did so for last three consecutive days. It could do it tomorrow as well. IIP and inflation data is not good.
Now all eyes will be on RBI policy and US fed meetings next week on Wednesday and Thursday.

In view of this let us adapt very safe strategies
Sell Reliance 900 CALL of December expiry between 6-6.40
Sell Reliance 940 CALL of January expiry between 12-12.50

Here Rs 30000 investment in margin money would able to to fetch RS. 1200/- excluding brokerage in less than 15 days. This is more than 40% return.

Sell Tatamotors 410 CALL of January expiry around 6/-

Sell NIFTY 6400 CALL between 25-30
OR
Sell NIFTY 6350 CALL around 40
These all are reasonably safe strategies.NIFTY CALL sell contracts are obviously more safe than stocks.

Once money deposited in your account take trade in IDFC
If RBI policy and US Fed signals are not up to expectation of market then banking will crash first.
IDFC is always more vulnerable below 100.
So buy IDFC 100 PUT around 1.00. This could turn out to be good investment!! Hold till policy decisions by RBI. Perhaps it can reach up to 7/8.

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

Buy NIFTY PUT for intraday

Book profit in TATASTEEL CALL sell, NIFTY 6100 PUT sell and SBI CALL sell contracts.
Market may stay within range as there is no new trigger. Macro data will be known and we will take new positional trades tomorrow based on market direction.

Only for today buy 6250 PUT @ 44-46 target 52/56. SL 21
Don't expect big move and keep booking profit today with trailing SL. NIFTY may bounce back from 6260 levels to 6330. So be alert on short positions.

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

NIFTY and TATASTEEL

NIFTY

Sell 6100 PUT between 23-25

TATASTEEL

Sell 420 CALL between 15.50-16.50

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

NIFTY and BANKNIFTY

BJP and Modi had one of the brightest day. Indian market will cheer the outcome as BJP is perceived as a political party to provide market friendly Governance.
China export data was exceptionally good and nowadays markets zoom after Chinese data.
US markets were up on Friday.
Singapore NIFTY closed at all time high on Friday

In short all set for at least 150 points gap up opening on Monday. Usually Indian markets do over react and it will so on Monday too. 6420-6460 is the resistance zone, so keep selling 6500 and 6600 CALL options. If NIFTY goes near 6420 then 6500 CALL will be available at around 100-103 tomorrow.

NIFTY 6500 CALL
Sell 6500 CALL between 90-105.
Use your 30-40% capital to average earlier contracts of 6500 CALLs.

NIFTY 6600 CALL
Sell 6600 CALL between 60-65.
This could be very safe as there are not many trading days left and NIFTY may consolidate at 6400-6500 levels for rest of the month or would correct marginally for all time high levels due to profit booking.

Finally anything can happen in market.It would turn down when it is most unexpected and everybody is bullish on market. One must not forget just three months ago all stalwarts were advising clients to get out of market as NIFTY went below 5200 from 6100 in just 6 trading sessions. Though it is remote possibility now, one can not ignore it to happen. After this election outcome there is no new trigger and IIP data and inflation numbers are going to drive the market. The irony is on one hand if macro data is good market will react positively, but it will be based on deliverable of present Government on the other hand market is giving thumps up for possibility of change in government in April/May.

It will be interesting to see what would happen if P Chdambaram is announced as next PM candidate by Sonia. Would market still go up? Are political parties deciding PM candidates looking at markets where only 3% Indian population is involved?

There is high possibility that date of elections will be delayed as far as possible and it would create an anxiety among traders. Congress would now get time to device strategy and  dampen Modimania.

Nevertheless, purpose of this blog is not to make political comments but to find out risk free option strategies. So all this suggests NIFTY could stay below 6500-6600 and it is safe to keep selling 6500-6600 CALLs.

And,
If NIFTY to be corrected fall be lead by BANKNIFTY. Very soon interest rates will be hiked. BN can correct then by 1000 points in few sessions.
Buy 11200 PUT of BANKNIFTY at around 52-56


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

Tatasteel and Adanipower

Market must have already discounted BJP's success by now in this election but still one can see some gap up opening tomorrow as knee jerk reaction based on exit-polls results.

Book profit in TATAMOTORS 410 CALL near 7.50/7.70 levels.

TATASTEEL:
Sell TATASTEEL 460 CALL between 3.20-3.80

ADANIPOWER
Sell ADANIPOWER 35 PUT between 1.25-1.40; OR low risk takers can sell 32.5 PUT around 0.60

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

Tatamotors and NIFTY call sell contracts

NIFTY is slowly factoring election outcome. Markets are not cheap now so very huge upward movement in NIFTY of say 200 points after election outcome is unlikely.

Use this scenario for selling CALL options. Auto as a sector is suddenly not doing well, in fact in election year Auto should have done well. So book profits quickly when you are gaining more than 2% on your investments.

Tatamotors
Sell TATAMOTORS 410 CALL between 13.5-14.5.

NIFTY
Sell NIFTY 6600 CALLs between 33-36

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

Sell CALLs in first week.

First week start selling CALL options.
Sell 6500 December expiry CALLs at around 55-60. Do not invest entire capital tomorrow, but reserve at least 25% capital. We will average if it goes above 100 after election results.

Sell TATAMOTORS 410 CALL at around 13-14.

Sell Reliance 920 CALL between 6.5-7.25.

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