Bear spread strategy in DishTV

It is better to book profit before RBI policy in 8000 or 7800 PUT sell contract. FIIs are constantly selling in cash. Not many times market could sustain at high levels without FIIs contribution in cash segment.

Very volatile month ahead due to Parliamentary sessions and rumors of rate hike by FED, one should be careful in writing options henceforth. Do not trade in options without strategy.

So first, book profit in NIFTY PUT sell contract.

Replace NIFTY trade with Dish TV
DishTV is near long term resistance line.
Maximum OI at 100 CALL which is trading around 3.4 suggest DishTv might not pass 113 very soon.

Very low risk strategy could be as follows:
Bear spread.
Buy 105 PUT contract around 2.30 of Dish TV and sell 100 PUT contract around 1.10.
Maximum loss could be near Rs. 6000/- and profit potential of Rs. 18000/- .
Very good risk reward ratio.

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

First strategy for the month

Last month some CALL buy and PUT buy decisions went wrong and it dented our profit.
New month has started and as a trader we should forget successes or failures last month and start trading all over again.

Basic assumptions, and money management rules once again.

1. One would have at least 500 thousand (5 lacs) to 600 thousand (6 lacs) in a trading account. 
2. Maximum loss should not be more than Rs. 30000/- per month.
3. One complete strategy should not make loss more than 10K to 12K.

With this first complete strategy of the month is as follows.

1. Sell 8000 NIFTY PUT of December expiration two lots.
2. Sell DR REDDYS 3300 CALL of December expiration 1 lot around 75-85.
3. Buy TCS 2300 PUT of December expiration 1 lot around 30/-

Strictly monitor stop loss of combined three trades above. Any moment if loss goes above 10,000/- just prepare to exit.
Alternatively, one can wait till loss reaches to 30 K, provided he/she is committed for not taking any other trade during the entire month. Choice is yours.

If profit is above Rs. 5000/- then don't hesitate to book the profit.

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

Buy IFCI 27.5 CALL around 0.05-0.10, but only if profit of this month permits.

NIFTY is trading near lower end of the triangle. Breaking below 7810, conservatively below 7790 could open flood gate at downside.
If NIFTY goes below 7760 then one should book loss in 7800 PUT sell contract of next month expiration. But hopefully by then DISHTV PUT contract should able to compensate for the loss in NIFTY 7800 PUT contracts.

FIIs are selling, general tone is negative, but certainly NIFTY has taken halt in downtrend so far. It might stay so till expiration. Even though FIIs are net sellers, global cues are negative, NIFTY is able to sustain at 7800 + levels. This is good sign for bulls.

No new trades. But for those who have to take trade and can not sit idle, should buy IFCI 27.5 CALL around 0.05-0.10. Just Rs. 2000/- investment could make one richer by Rs. 40-50K!!
If your profit permits then don't miss this opportunity.

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

New positions

FIIs are mainly sellers in cash.
As per EW, this could be 4th wave and should not go above 7995.60 in this series.
Global cues are positive and hence one can expect positive opening on Monday. Try and sell NIFTY CALLs of 8000 strike price around 7950 NIFTY levels for next month expiration.

One can sell 7800 PUT contract for next month expiration till NIFTY is above 7810.
Some stocks could show lot of volatility.
One of them could be Dish TV.
Buy DishTV 100 PUT contract and 105 CALL contract.
Total investment could be Rs. 5000/-

Summary of positions could be as follows.

1. Sell 2 lots of 7800 PUT contract of December expiration. Your trading account will be credited by around Rs. 17000-18000. See 75-90 levels in next couple of days, that could be time to exit once. 
2. Buy 105 DISH TV CALL and 100 DISH TV PUT contract. Total outgo will be about Rs. 5000/-

Hold all these positions till total loss does not go beyond Rs. 15000/-

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


       

One may have to book loss in JP.

JP Associat posted loss more than Rs. 500 Cr. in this quarter too. This is not good sign for the stock. We have to book loss in JP 15 CALL option contract.

NIFTY would be range bound from here. Might not see lower levels than 7500 and above 8000 in this series.
Maximum OI in 7700 PUT and 8000 CALL will make sure this range bound movement till expiration.
However, in Bank one can see there is clear trend for next couple of days at least.

1. Buy ICICIBANK future and sell SBI future. OR
2. Sell SBI 240 CALL @ around 6/- and Sell ICICIBANK 260 PUT around 4.20-4.50.
3. Also one can sell HDFC 1140 PUT contract around Rs. 6-6.50. 

Exit the trade if maximum loss is more than Rs. 8-9 thousand.


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

NIFTY is not sustaining at higher levels, sell NIFTY OTM CALL options.

Good profit booking opportunities in DLF and NIFTY Call sell contracts. We booked profit in these strategies.
Though on Muhurat trading NIFTY could cover around 40 odd points, over all trend is negative. One can hold short positions easily till NIFTY does not cross 8010 in cash. Till then one can earn money in intra-day by writing NIFTY OTM CALL contracts.

If brokerage permits write 8100 CALL options of November expiration.

JP ASSOCIAT results to be declared on Saturday, if something comes up positive in those results, our option contract could provide an opportunity to exit on Monday or we have to prepare to book loss!

TCS strategy: Hold. Presently this strategy is in marginal loss.

Axis bank looks good for long term (more than one year) or for medium term ( 3 months to 1 year) investment perspective.

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

Update

All media sources are expecting NIFTY to touch 7600-7500 in very short term. Two main reasons, first such defeat for BJP was not expected by trades seems and rate hike by FED is almost certain in December.
Generally market would move in opposite direction than general expectations. But one never know.

We are carrying positions in JP Associate CALL contract, which would go in loss if market falls and we expect DLF bear spread strategy to end in profit if market goes down.
But in general, DLF might not experience very negative impact too due to election outcome in Bihar. Government might go little slow over such sensitive issues and will try to organise house first, before the next election. It will be interesting to see movement in DLF tomorrow. Of course we expect it to fall!!

No new trades.
Keep booking profit in TCS, NIFTY CALL sell, DLF option contracts. Book loss in JP if you can't hold.

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

Buy DLF 115 PUT around 4.50 and sell DLF 105 PUT around 1.5.

At the time of writing this blog, it seems from exit polls that BJP will emerge as the largest party in Bihar. Though it would be difficult for them to form Government.

Market would recover to some extent but if BJP fails to form Government, it would eventually go down.

Due to increase in lot sizes it becomes nowadays very difficult to adjust trades for small timer and small sized traders like us. Especially for those with very low risk taking ability.

DLF is high beta stock,
If market falls it will go to near 100 again.

If one has exited from all trades and total loss so far is not Rs. 30000/-, then enter in bear spread strategy.

Buy DLF 115 PUT around 4.50 and sell DLF 105 PUT around 1.5. Maximum loss could be around 15000/- and profit potential around 35000/-

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

Only update. No new trades till Monday

No new trades.
Book profit in Reliance 900 PUT if not booked earlier.
Tatamotors had given good profit booking opportunity yesterday. Those who could not have latched on to it must book loss. Or sell 390 PUT and hold till combined loss crosses Rs. 10000/-.
Hold JPASSOCIAT 15 CALL, chances of this trade making money is diminishing now, but let us hope against hope.
Lot of volatility can be expected till Monday, ie election results and we are very light on the trades.

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

Updates and new trades

NIFTY might bounce back as long as it stays above 7960.

Next halt for NIFTY could be around 8280-8300. 

Many stocks shown positive diversion. FIIs sold in cash even today. 

Update:

1. NIFTY 8000 CALLs: We booked profit, one may book profit tomorrow morning.
2. Reliance PUT sell: One may hold or could book profit.
3. KTK Bank: We are not in this trade but if loss is more than Rs. 5000/- it is better to exit, due to increased lot size we have to manage trades very carefully.

New trades:

1. Buy JPASSOCIATE 15 CALL around Rs. 0.30.
2. TCS strategy: TCS is now scheduled for big move. I don't know which direction it would take! Buy 2400 PUT and at the same time buy 2650 CALL at market price, total investment will be around Rs. 5000/- and total risk will be around Rs. 5000/- with unlimited profit potential.

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