iCharts Discussions

[t00051]

Dears

On Friday closing 22May, in the last bar, 30 minutes chart, I saw a buy in the Nifty underlying, with Indicators 50 days EMA & DMI & Bollinger bands. So i shorted June Nifty 9200 Ce and bought Nifty future. I hope i am going to get 22500 Rupees, which is 2.25% in a month.

9200 Ce Jun Expiry short @ 300 Rs
Nifty Long @ 9200 Rs (The price is after some adjustment)

This strategy is called Buy and Write Strategy. I am doing this because of below reasons

1. I dont think i will get more than 300 Nifty points in a month. This is enough for one Nifty Future position for one month, This will give me 2.25% return. There is 97.75% risk. But it is okay. I am willing to take risk.

2. I want to collect the Option Premium. Option premium is my 2.25% return. I know my capacity, I will not buy a nifty and hold untill it goes all the way to 13000 Points. I am an average investor and not Warren Buffet to Buy and hold patiently for more points. I just dont want loss and want only minimum profit.

3. I understand in June month there is possibility that Nifty may test the 7500 Points and then 4500 if that is broken. That means a whooping 1.5 Lakhs loss. But when that happens i will convert this position to investment. The side effect is every month i need to rollover with premium loss, brokerage loss and 17% Interest loss.

4. I have money, and I can average upto 4 Nifty lots. Currently this is my first Nifty lot in position.

5. Stock market is a gambling. So you win money or lose everything. So, I dont want to put stop loss. My stop losses are always hit. So now my stop loss is my entire bet. Either win the war or lose the war, dont like to survive with injury.

[t00051]

I am going to do a Bull Call spread strategy in Nifty9200 CE 50 Rs and 9400 CE 13 Rs. Total risk 3000 Rupees. Total Profit chances 3000 Rupees when the market goes to 9200 before Tuesday closing. Fair Risk vz Return.

[veerappan]

[t00051]

[t00051]

[t00051]

Below 2 Positions are being carried forward.(Buy and Write Strategy)
Nifty future Bought @ 9200 Rs
Nifty June 9200 CE short @300 Rs.

I want Nifty June expiry above 9200 pts. So that i can get 300*75 = 22,500 Rs.

Current rate
NIFTY Fut is @ 9050, and
9200 CE is @ 200 rs

Since market indicators are telling that market will come down. For safety I bought 8800 MAY PE @ 38 Rupees. This will save my position for 2 days. In case market goes tomorrow up, then this 38 rupees will be lost. And my profit will reduce to 262 rupees.

[t00051]

Today there was a chance to write BULL CALL Strategy and I made 1000 Rs

As per DMI technical indicator i entered this.

13:11:34 BUY NIFTYMAY9300CE 17.45
13:11:34 SELL NIFTYMAY9200CE 48.85
10:57:52 SELL NIFTYMAY9300CE 7.70
10:57:48 BUY NIFTYMAY9200CE 24.90

The below position carry over is continuing and in a profit of 3000 Rs. I need the nifty to come to 9500 to pocket 20,000 Rs profit.

Nifty Fut buy @9200 Rs
Nifty 9200 Jun Call Short @300 Rs
Nifty hedge position 8900 May Pe Bought @ 38 Rs is now @ 6 rupees.

[veerappan]

[t00051]

Today suddenly, unexpectedly market rose from flat to 300 points +.

9200 CE June wrote @ 300 is loss. So i booked with a loss of 50 pts (3000 Rs loss)

My hedge 8900 PE May bought at 38 Rs is loss. So i booked with a loss of 32 pts (2500 Rs loss)

My positional buy 9200 Jun Future is still holding. That is in profit of 7500 Rs. So all in all its a profit of 2000 Rupees.

Due to this sudden movement,
I adjusted my Buy and Write strategy like below
Short 9200 June CE position is booked with the loss of (3000 Rs loss)
Exit 8900 May PE with loss of 2500 Rs
New Short 9000 June CE @ 475 Rs.

Why I adjusted this position? because market is suddenly moved. Unexpected. So i adjusted the position. Suppose if tomorrow also market moves by 300 Points, then it is good.

After adjustment my Buy and Write strategy is like below
Short 9000 June CE @ 475 Rs
Long Nifty Future @9273 Rs

But these 2000 rupees profits are peanuts, because i lost too much money earlier.

[t00051]

There is a chance to execute synthetic long & Arbitrage strategy, because there is 30 points difference. But actually this is not realized. At all scenarios there is 6 Rs loss. So not going to do this strategy. Today there is no oppurtunity, just holding the Buy and Write strategy.

Nifty May Fut short @ 9377 Rs
Nifty May 9400 Ce Buy @ 28 Rs
Nifty May 9400 Pe Sell @ 45

If market expires @ 9377
Nifty may Fut Short Profit = 0 Rs
Nifty ce Loss = 28 Rs
Nifty pe profit = 22 Rs

Total loss 6 Rs


If market expires @ 9300
Nifty may Fut Short Profit = 77 Rs
Nifty ce Loss = 28 Rs
Nifty pe Loss = 55 Rs

Total loss 6 Rs

If market expires @ 9500
Nifty may Fut Short Loss = 123 Rs
Nifty ce Profit = 72 Rs
Nifty pe Profit = 45 Rs

Total loss 6 Rs

[t00051]

If the max pain point is 9300, then why not nifty can come down for 9300 for expiry? I remember 9100 was the pain point before 2 days. But now i am searching for this May pain point i am not getting it in the moneycontrol. if the pain point is 9200 or 9300 then nifty need to come down. this is a common structure. if this not happens then very strange market. I am also searching internet to find max pain point but not able to get.

[t00051]

Market is all the way up. There is no indicator in sell. Only my mind is in sell. but how that can be a valid point for a technical trader. even if i am not an early bird to catch the sell i should not worry. All i did was i adjusted the 9000 Ce short to 8800 Ce. But that is also un necessary, but i did it because of over precaution or fear. this fear reduces my profit in the Buy and write strategy.

[t00051]

I exit Buy and write strategy. Because for me market gave 500 points rally, also nifty is touching the 50 days EMA in daily charts.

Short 9000 June CE @ 475 Rs covered @ 52: Loss = 4000 Rs
Short 8800 June CE @ 677 Rs covered @ 699: Loss = 1500 Rs
Long Nifty Future @9273 Rs Sold @ 9415: Profit = 10,000 Rs

So all in all 5000 rs profit ( I made more in this strategy, but that is adjusted for some expenses)

I was aiming for 22500 Rupees profit. But i settled with 5000 Rupees. This is how a typical retail trader does.

Now i am entering a Bear Put strategy.
Bought 9300 Jun PE @233
Short 9200 Jun PE @195

Why I entered?
1. Because i am not waiting to make big profits. And i am not qualified to do big trades. Typical retail trader.
2. In this Bear Put strategy my risk is 3000 Rs
3. Profit may range between 1500 to 3000 Rs if market comes to 9300 Rs
4. And i can hold this until Jun expiry which is attractive for me. Just in case nifty falls i will get 1500 rupees
5. Nifty run up for 500 points and it is touching 50 days ema. There is chance that it touches and comes back from 50 days ema. I know If it crosses it may go to 11500 points , but my loss will be only 3000 Rupees.
6. It is normal to expect a slow after 500 points rally.

[t00051]

When a bull run happens, bears are knocked out. Only if there is a Gap down of 150 point within the next days (Friday or Monday) , the sentiment can change. Otherwise the bull can make the market high to 11000 points very easily.

Today, also, the Nifty market closed high above 50 days ema, in daily chart.

So my below Bear Put strategy looks will be knocked out and going to be closed in loss i think with a 3000 Rupees. But no worries, i got something from the Buy Write strategy already.
Bought 9300 Jun PE @233
Short 9200 Jun PE @195

Now to stay with market trend, i need to be in the buy, but all the indicators gave buy before 500 points itself.

[t00051]

I came to an understanding that Long date options (far month) dont reflect nifty movement equally ( i mean they will not rise big or fall big corresponding to the nifty movements)

So my below Bear Put strategy did not moved quickly. I thought 100 points fall will give 1000 to 1500 Rs profit. But actually, there is no profit here except a 200 Rupees.
Bought 9300 Jun PE @233
Short 9200 Jun PE @195

So I am going to add one more Bear Put strategy. This is late in execution, but for analysis purpose i executed it. Already lost too much money in the past. So this testing is not going to be bankrupt me.

Bought 9300 Jun 4th 9100 PE @42
Short 9200 Jun 4th 8900 PE @17

So in total having two Bear Put strategy, which has a considerable stop loss amount of 3000 + 1500. With this stop loss money we can setup a roadside idly shop and earn 1500 Rupees daily. But I am addicted to stock market gambling and greedy to stepping into the market again and again.