Thursday, April 1, 2010

Musings of Options Trading

Date 30/03/2010

Even though i started doing option trading from some time back this is my first post where am doing post Morten of what i did on that day , since my memory is leaking this might act as proof of what i did .

few days ago i bought 5300 put when market was around 5300+ on last friday or monday at around 90. I got this brilliant idea of selling a put( which in fact is destructive idea) at 25 Rs. so when i did the same with icici they asked for margin of 16K for it though probability of loosing that position is very less since i am holding  5300 put . so after lot of thinking  went ahead and sold a put for which i got around 1000 Rs after brokerages . Now for the past two days market went my 5300 put went from 90 to 130 and i thought pf taking that  profit and renter again to buy 5300 put at in my desperation to square of 5300 put i closed at 125 Rs at around 3:10 PM expecting that market will not go down much from there since another 15 mins is there for market closing .To my utter surprise market fell in last 15 mins and premium went to 130+ Rs .I felt disseminated at my self for waiting till end of day . And the biggest surprise came after another 3 hrs and before US markets opened they released ADP report which gave a bad signal to markets and Europe almost drop 1% and dow and S&P dropping half a percentage and this started my worst nightmare of the year which made me to write this post. Problem is i am having naked 5000 put which can go completely wrong if markets go down..and i don't have a 5300 protection ,so for whole night i was praying that market (nse) should not open in down...and my prayers were answered for now...I feel am lucky to survive for today Will see from where i will head and ob markets head

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