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Art of doubling money every month...Stock Option - Positional Trading...

12/13/2015 10:09:36 PM

Art of doubling money every month...Stock Option - Positional Trading...

NSEData.com - A Technical Analysis Software providing company...

We at NSEData.com provides guidance to the traders in Indian Stock Market for various segments of markets such as equity cash, futures and stock options. We also provides analysis for trading indices, especially Bank Nifty positional trading is our great success...

Now, we are coming with one more robust product...Stock Options on Positional Trading...

As such, Stock Options are believed to be very risky. The highest risk bearing tools among all the available instruments for trading in the stock markets. And it is very true upto certain extent. But, but, but - Every Cloud has a Silver Line...The positional trading also has a silver line - a cap of good hope. The question is - "How?"

Let me explain. First of all, Let us see what is an option. Basically option were designed keeping in mind - security of futures trades - for the purpose of hedging. Means it was working as Insurance to the risk of future trades for those who were trading in future trades. Eventually, speculators turned up with the strategies which have proven the Options as a biggest profit making instrument. An instrument with limited - or say fixed risk and with the unlimited opportunity of profit making. Means investment is less as compared to that of futures trade and opportunity is almost similar to that of Future trades. 

For example, we found an opportunity in Ashok Leyland in Intraday trading on 30th November, 2015. The stock hit the high of 99.65 and was coming back. It was same as all time high achieved previously on 18th August, 2015. We bought put of 95 strike price at 2.5 Rs. Normally people use to trade options on intraday base and take small profits as to secure the profits. We would also have done the same.

But by the end of the day, we worked out the stock on merits. It was a perfect case of Bearish Engulfing supported by heavy volumes. Before the close, the PE 95 put trading at about 4 Rs. We bought it at 2.5 Rs. The mtom profit was 10,500 Rs. We might have booked it and secure the profits. But we decided to stay. Our investment was 17,500 and brokerage + taxes was less then 200 Rs. 

We decided to stay in the trade and risk the profit we already earned on mtom basis. Next day, the option was opened at 3.55 and closed at 4. One more day it traded in narrow range not giving much profit. On the other hand, spot price of the stock was constantly falling down. The significant fall came on 9th December where the stock declines below 87. The 95PE recorded high of 8.7 Rs. 6.2 Rs higher from our purchase price. But fortunately, we decided to book the profit at 7.5 Rs price of 95PE same day. 

We booked profit of Rs 5, amounting total of 35000 in the stock. Our investment was Rs 17500. Why we decide to book profit, because it was just double the price of our investment. If we had traded this in Futures, then the profit might would have about 84000 [(99-87=12)  * 7000 (Lot Size)], but investment required would be 84000 Appx.(Futures Margin).

This is not the single case. We get confirmed sell signal on Nifty daily charts in our system on 2nd December. We started looking other opportunities for sell, and we found few from our system itself. Some of them are listed below.

Apollotyre 160 PE: Bought @ 5 on 3rd December and Sold on 10th December @ 11

Adaniports 250 PE: Bought @ 6 on 8th December and Sold on 11th December at 12
Bankbaroda 170 PE: Bought @ 4 on 2nd December and Still holding at 15.45 closing on 11th December, continue with Stop Loss of 10 Rs on 14th December. 

and many more...

We are eyeing few more such trades in next week for positional trades. The stocks on radar are - 
1. BEL 1200PE: Shall buy if spot trading below 1260 on 14th December and Nifty remains negative

2. Bharatforge 750 PE: Shall buy if spot trading below 790 on 14th December and Nifty remains negative

3. Cairn 120 PE: Shall buy if spot trading below 125 on 14th December and Nifty remains negative 

4. Castrolind 400 PE: Shall buy if spot trading below 410 on 14th December and Nifty remains negative

5. CESC 540 CE: Shall buy if sopt trading above 520 on 14th and Nifty remains positive.

The simple rule to be followed is that, follow the direction of Nifty to trade and then decide which stock call or put you want to buy. Stock should be evaluated thoroughly before entering in the trade. Keep in mind, you may loose entire amount invested in a particular call or put if your view goes wrong.

Trader may contact us if interested in our Stock Options Positional Trading System...

Happy Trading...Trend is Friend


Total 2 Comments

  • pklaskar
    12/17/2015 7:59:06 AM

    Dear Tushar, Read your blog and getting interested to know about stock options.Please send me details. Regards

    Reply    Vote

  • Tharmmarajhan
    7/26/2019 4:19:44 PM

    I am interested in your positional option software. Pl send details.

    Reply    Vote

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