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trade-diary

Trade Journal Today's Trade:

Nifty Spot - 10800 Bought Nifty 10600 PE Option at 51. Executed on June 7, 2018 - Thursday

Reasoning: Volatality is around 11 % much lower than the average voltality observed of 12- 14%. 10500 - 10600 seems to be the average of Nifty based on put - call open positions. The current rally is thin mostly on bank stocks which have increased because of the rate increase by RBI. I expect the market to turn south in a few days.

June 14, 2018 - Market has been slightly upward trend although today it dropped to below 10800. There has been no clear upward or downward movement. Premium has been reduced to 36. Unless market moves south by atleast 80- 100 pts the option may expire worthless.

Nifty Spot 8400 Sold Nifty 11100 CE option at 15.

Reasoning: Highest Calls have been written for 11000. As the market resistance seems to be at 11000, hoping to hold the call to expiry.

Sun Pharma Spot - 560 Sunpharma 580 PE Option at 6.5

Reasoning: Sun Pharma has increased with good results plus USFDA clearance. Higgest PE written yesterday was at 560 and then 580. As this will be a double resistance, written a PE at 580.

However today it appears the higest no. of puts has been written at 600 currently. 10 days of market to expiry. The technical indicators look good, waiting to see how it behaves with R1 @560. Stop loss shall be decided mid next week.

On Friday Jun 22, Sunpharma fell below 560 with 580 option trading belo2, but hoping to keep it to expiry , I let it pass, share bounced back and closed close to 579.

On Monday Jun 25, Sunpharma breached 590 and I closed the option at a loss of 12.5, as the buying interest to selling interest in both cash and option market was betwwen 5 to 10 times, and heavy unwinding of options at 580. However by EOD, the price dropped again below my original price.

Result: A loss of 6050.

Lesson learnt: Close the option when most of the value has been extracted esp closer it gets to the expiry as we will not be able to wait out any unexpected and sustained bounce backs.

Plan: Tuesday Jun 26,2018 - Ultracemco has formed a good bullish engulfing pattern, with increased volumes closer to its support levels. MACD has a cross over and stochastic has a fast line over slowline at just above the oversold levels. It has had a high momemntum and was the biggest gainer. Is closer to its all-time support level based on daily chart of 6m. Open interest for July futures has also increased with an increase in price. Howeever future price is quoting at a discount to CMP.

Target : 3873 Stop loss : 3660. The gain loss ratio based on the future closing price and is over 2.18.

Tomorrow at 9:30 if the candle is green and CMP is greater than ATP, I will go long on July futures.

Execution: Ultracemco opened in green as expected and climbed the charts quickly. I bought a market order at 3162.5. Although I had set a square off at the target price decided prior, I saw the stochastic reach the overbought levels of 96 at about 10:30 AM. The sell and buy targets were of equal quantity, so unsure that the momentum will sustain I closed the position at 3852. The charts climbed briefly after I made the exit and closed the day at 3840. Result : Intraday profit of 18 K on one lot.

Bank Nifty had highest OI of about 10 M + at 27000 CE, So I sold at 40 and bought it back at 23.5. Bank Nifty 27000 CE closed at 21.5.

The open option of 11100 CE which was sold at 20.5 a few days earlier was also closed at 0.7 making a profit of 1050 over a week+.

Lesson Learnt: On trades with high conviction could go for multiple lots.

Strategy: All open positions have been closed now to allow for optimum utilization of quick deteroriation of option premium in OOM calls and puts on expiry day.

Since it only two days to losure of the month, OI data is not producing any good signals. All OI reduction is of current month contract and increase is in next month contract. So ignoring OI info for any stock specific cues.

Planned Trade for Tomo Wednesday Jun 27, 2018.

Currently highest OI change in Nifty is at 10650 PE, 10700 PE and 10850 CE and 10950 CE. Will check if the trend continues and sell the OOM options tomo and try to close in the same day.

Bank Nifty Calls highest increase in OI is at 26700, 27100 and 27000. None of the puts have over 1L increase in OI. As spot is 26601, 26700 is too close to write a CE. May consider 27100 if OI interest sustains during the day tomo.

On stock level Coal India which one of the stocks that had highest increase in % today, had bounced from its bollinger band low. The closing price is close to its all-time support with very good volumes. MACD is not indicative as there is no cross over. Stochastic is at an oversold level of 7.25. The stock may bounce upwards or continue side wards momentum. It has formed the bullish engulfing pattern on the charts.

As per Karthik, one may go for trade even if the indicator does not point to the same direction with lower bets and tight stop loss.

CMP = 265 Target = 286 stop loss = 259. Gain pain ratio is 2.86.

Lot size is 2200. At 9:30 if the candle is green along with 15 M intervals, CMP > ATP, and open > close, I will go long in one contract of Coal india for July Futures. In the option market OI has increased in calls 275, 280 and Puts in 265 and 245, which will act as support. Very slight increase in OI, but not considering the data due to fluctuation in OI due to closure.

Execution 22/6/2016

Market was lacklustre with no directional moves in the first half. Coal India did not open in the green so the planned trade was not executed.

Wrote BankNifty Puts at 1st SD as we are just one day om expiry. But the market esp bank nifty fell and the OOM PUT became in the money. The two options were unwinded at a total loss of 2400.

IOC was bought for long term or swing at 155 as the PE was at 7.08, P/BV 1.37 with a number of undervalued subsidaries in its book at cost price. CPCL at 160 as against market price of 300 and Petronet at 10 as against a cmp of 150. Considering the CAGR has been at 15% for the last 5 years, the stock has potential to atleast double when value is unlocked.

Current energy prices may be a pressure on B/S considering the central election soon limited ability to pass on price hike. However as the prices are no longer subsidised the pressure to reduce taxes will be on state and central govts than the refineries. Long term fundamentals intact despite short term pricing pressure. At a fraction of price compared to other refineries.

Tomo : 28/6/2018 - Bank Nifty has Call to PUT ratio of 0.69 signifying much weakness in the market. Call writing has been done at 26600, 26500, 26700 when spot closure is at 26423. Shall observe at 12.30 to see if time value detoriation can be aptly used to get some points.

All the stocks that moved heavily in the down market seem to be near the bollinger band 2 SD levels signifying a possibility of a bounce back. But candlesticks are bearish lacking any conviction on the direction of markets. In the absence of it , it is better to not indulge.

I have no open positions at EOD, so will wait and watch for any option premium detroiation opportunities alone post 12:30.

28/6/2018 - Today markets remained volatile and predominantly negative. I had kept away from writing any options as the risk:reward ratio did not seem favorable for June expiry.

NALCO seems to have found a good support and has increased well even in today's deeply red market. I was a bit over enthusiastic and bought it at closer to day's high level although in the 5 min chart it was approaching its bollinger band upperside. The day chart shows much upside.

Target = 68 stop loss = 59. Bought at 63.5 CMP closing = 62.4.

NALCO has 8000 share lot so, even small movements on either side can make a big impact on my P&L. It has formed a bullish engulfing pattern at the end of the day and looks good to go higher. Hope to hold on to it for a few more days until target is achieved or stop loss is breached. the heavy lot size makes me very tensed, maybe I should stick to smaller trades before trading anything of this lot size.

29/06/2018 - Today NIFTY recovered much of the lost ground but Bank Nifty still slid down. NALCO has gone up by another 4% which at least has made my position in the green. It closed at 64.7 in cash and cash 64.4 in Future. It has formed a bullish marubozu. The uptrend seems intact for Monday trade. Nifty metal index was up by over 2 %.

Advance to decline ratio was at 4:1 at EOD. Tata Steel and TITAN has formed good bullish engulfing pattern with proven support points for stop loss. As this is a reversal pattern MACD has not had a cross over yet, but the MACD line has turned upwards. tata steel pain gain ratio is not in favor. Tata steel has formed a bullish pattern after a doji which means the opportunity is higher. P3 day closure is also a proven support point.

UPL has gain, pain ratio of 3: 1 and has formed a piercing pattern. If it opens in green on Monday this would be a lucrative trade to take. I can buy an OOM option at 700 for Rs.3. As I do not have the margin for Futures.

July 5,2018

NALCO is stuck in a price range while I was expecting it to breakout. Although it formed a bullish marubozu last Friday, the stochastic had reached the overbought levels which I did not notice at that point in time. Now it is stuck in the oversold region with a huge drop in price. Not only does it have a nearly (30 K) it is also preventing me from taking other positions. I want to close this and move on. In the day charts however stochastic was closer to 35, but was ovesold in lesser intervals chart such as hour, 30 min etc. It has been trading at price close to 60 for almost 3-4 hours. I may consider this has a good support. However if this is breached and falls further today, I may have to cut my loss and retreat has day wise stochastic as even more bottom which due to the lot size is too much for me.

In a sideways market like this, the only reliable indicated seems to bollinger bands combined with stochastic.

Today I was able to use the Bank nifty weekly expiry and get about 25 points ona single bank nifty contract. spot was at 26500 and oscillating at that levels, I sold a 26400 contract at 26 MIS as I did not have margins for overnight. But MIS allowed me to write almost two contracts, second I cancelled as I was too close to the margin negative levels. May be I should have gone ahead with it as it will close on the same day. But appeared risky and I avoided. So for July 5, I made + 1020 and a MTM loss of over 27600. So this would officially wipe out all the money I made last month and more. Anyway next time if the stop loss would create a loss more than I can handle I should not get into the contract. Plus no contracts of such huge lot size.

July 6,2018 - At start of the day , there is no plan. Hoping to get out of NALCO, hopefully in green.

NALCO rose up to 62.7 that is nearly 5% but even before it hit the over bought levels it started dropping due to sales pressure. It has formed a candle similar to an hammer, with a long upper shadow and a small body. This is usually a trend reversal candle. the candle is very similar to what the NIFTY formed as well. Currently NALCO and Nifty seems to be range bound in an accumulation phase, while it is good it is not falling down, I am unable to exit, stuck in a limbo. the huge lot size is giving me sleepless nights, hopefully monday I will be able to exit.

July 9,2018 - NIFTY is expected to be range bound for the entire week unless it makes a stride. Results that will be coming in the week may make NIFTY move in either of the direction. Hoping to get out of NALCO, in green or atleast with only a minor loss. CESC I plan to buy for unlocking of shareholder value due to demerger planned in the next couple of months. plus it is a profitable company trading at under its BV.

I had put a buy order for CESC at 925, which did not get fulfilled. US and EU markets were up , so Indian markets also seemed to be in high spirits. NALCO started off positively higher than friday closure and hit high of 62.7 and closed at 62.2, the avg price was at 62.21 in the futures market. Metals were all positive. The sentiment seems to be positive. this could very well be a mistake I might profit from. Still waiting and watching.

July 10, 2018 - Market was booming and looked unstoppable. Almost all stock were in green. NALCO formed a day high of 6.8 and closed at 63.4. It was continuation of the bullish harmi a three inside up. One more day of green an I could probably profit from a mistake made.

July 11, 2018 - The US trade Wars toppled all metals stocks really badly. Most stocks were in REd , however NIFTY managed to hold the 10950 due to stellar results posted and was up by more than 5%. Unceranity returns and so with it. I bought 10 More CESC today at 920/a share/ Have sold 10800 Puts as it has the second highest Cumulative OI as well as the increase in OI as of today at 40. the PE closed at around 36. will cash out after a fall of 10 points.

July 12,2018 - US Jobs data looked good. So Indian markets are up. NALCO was off to a great start and touched an intra day high of 62.50 but in latter half dropped to red and closed below 61. Its in the oversold category, so expect it to go up a little bit tomo, but to be able to close the call in green seems like a fairy tale wish. Before the next selling pressure continues hope to close this one, slightly in green or atleast less in red..less than 5 digits would be good.

I closed the 10700PE sold at 40 bought today at 21. 19 *75 = +1425 and two Bank Nifty Option 27300 CE made 9 points. (9.2 - 0.2 = 9*40 = 360) and 27000 PE made 14 points (15 - .5 = 14*40 = 560) Both were Intra day MIS positions as the expiry is of current date. Nifty was sold yesterday and bought back today. Selling options the expiry date with reasonable lee way of expiry levels seems to work well. Infact although BankNifty expired at 26995 (future) and spot at 27026) 27000 PE expired worthless at 0.05. An option holder would not want to exercise an option that gives me only a few points due to high stt levied, this gives a huge advantage for an option seller.

NALCO is costing much of time, money and mind :(

July 13, 2017

I finally closed NALCO at a loss of 30800. NALCO was weak even in a strong market and there was no signs of recovery. Even at low price ranges NALCO was closer to over bought levels which indicate further drop, So closed the position at 59.65 , a loss of 30800. I was happy to not have any positions carried over during the weekend.

What I could have done better: As the major issue was with the lot size, I should have closed the position when it got to 0 or minor profit levels. I had not planned my entry level and as a result entered the Future contract at a price much higher than the prev. day closure almost as high as it ever got. So my entry was wrong and I had not utilised exit at 0 loss well. But it is still good that I recognised the weakness and exited on friday as it closed wmuch below than my exit on friday and even closer on monday and reached new lows.

July 16, 2017 - Tata Motors was downgraded by Moodys due to their high debt level of JLR. N.C issued statements non of which could have allied any panic. As the stock was already weak I supposed it would grow weaker and lose much more on monday. I was reluctant to take any positions that are not hedged in F&0 till Iget a better understanding of risk. SO I deployed a Bear Put spread by buying 250 PE at 3.75 and selling 240 PE at 1.75. I have limited my loss to 3K which is well within my tolerance levels. Tata Motors has closed at 252.10 spot and 253.10 Future. My net unrealised pft in the position is 1.2K. The OI has jumped and I beleive it would go down tomo as well. Although the stock has fallen 6+ points since i took my position, my profit is lower. But I feel less restless than I do when I had an open position in Future, where I am hoping to get the max of a winning position causing anxiety even in smaller movements. Seems like a fair price to pay as of now.

I had also though due to lacklustre results Infy too will drop. I had avoided taking positions due to higher volatality premium. However, INFY was one of the few stocks that went up today. MArket had a PUT- CALL Parity of over 1.7 on friday, which indicated extreme bullishness (over 1.3 on an index) , but most Puts have been unwinded and lots of new call written on 11000 CE.

July 17,2018 - Tata Motors shot up today and I had to close the PUT at a loss of 750. Since this is not a trending market, it would be better If I close all the positions in the same day and not carry it forward.

July 18,2018 - No trades made today. But Tata Motors dropped heavily, which meant if I had kept the PUT I could have made money. Unsure when to be impatient and when to be patient.

July 19,2018 - Had a lot of issues with placing bracket order in Banknifty in Zerodha due to some exchange wide restriction. so tried to manually mange, so sell order in mkt went beyond estimated. I have to learn how to get around this issue plus the terminologies of stop loss trigger price etc. I did prev strategy for a range bound market and made little profit, however the same when contract went up again bombed as it continued to go beyond its bbollinger band, waited for bounce back and walked out with a minor loss. The contract on the side I lost out by nnot putting a market order. This is too volatile to my liking. I probably have to stick to swing and time value of /oom options for a while. MACD for index future also seems to work. Should Backtest and check for atleast 3 to 4 months. Also understand supertrend and get the checklist of Karthik outhere.

July 23,2018 - Nifty closed at 11080. I sold a NIFTY at 11200 at 12 when Nifty was at 11050. Nifty highest calls were at 11100 but it was trading at 35, I felt the risk reward was not favorable so wrote 11200 at 12. Although Nifty has closed very positively at 11080, HDFC and few other heavy weights are down. Nifty is trading slightly above Bollinger band on the 15min candle. I believe tomorrow it will go down and stay within the range it had been trading at for a while. However option chain seems to have had a very high unwinding at 11000 and 11100 call nad put writing at 11000. So it may not go down much or not go down at 11. My stop loss will be 24. also based on other parameters of the candle. Hope to hold it to expiry. Expect selling pressure to resume at any new highs. also Nifty is at a overbought position of 90.68 in the stochastic.

July 24,2018 - Nifty closes at 11130. Still dont think it will cross 11200, which is currently trading at 17.50. So keeping the position open. World i neutral , Indian market seems upbeat. My MACD cross over stocks, LIC Housing finance and IOCL are doing great. Hoping to book short term profits and then reenter.

July 27,2018

I have bought avanti Feeds for long term due to the below reason. stock is trading 12.93 PE with a ROE of over 50% Company has no debt and increased promoter stake during the recent price correction. The prices had formed a double bottom and bounced back. Looked like a good place to enter fundamentally and technically.

three trades were done based on MACD cross over with increasing volumes. Target and stop loss was arrived at based on resistance levels and support. JK cements seemed to have potentitial for 20% while the other two 10%

JK Cements - closing price on cross over was at 797. Bought at 798 Target - 853 - 860. Stop loss - 763 IRB - closing price on cross over day at 201. Bought at 203.5 Target - 224 Stop loss - 187 Tata power - Closing price on cross over - 70.8 bought at 71.5 Target - 77.2 stop loss - 67.8

JK cements was closed at stop loss. Other two positions are still hovering between stop loss and targets ..!!

Aug 16,2018

A Pair trade opportunity of Tata Motors and Tata Motors DVR was deducted due to a wide divergence between the two stock futures. Although the divergence widened post my purchase, this is only the second time in 250 + data points it has diverged so much. it will converge back , hopefully in a week closer to 1 SD. Will be tracking it to closure. Stop loss = 3 SD

Aug 21, 2018 After Diverging last couple of days to DC of 1.00 the stocks have started converging.. My notional loss reduced from 12+ to 3+. There was a short covering rally in dvr and for today there was gap of almost 1% btw the two stock in movt. Mean convergence should happen soon.

Aug 23, Pair trade in green today. movd towards 2 SD. Will wait for it to move to 1 SD and close. probably tomo or monday. remind me to send Karthik a gift :)

Aug 24 - choppy day. was green at +1350 at closure. Awaiting mean reversion. Aug 28 - Yesterday it was in green upto 3500, today in red upto 5K+, closed in red of about 3K. Tata Motors DVR is just not moving up !! Aug 29 - Diverged still closed in red about 4K+. Will wait till post lunch and roll over the contract.

trade-diary.txt · Last modified: 2018/08/29 19:54 by 111.125.228.67