Tuesday, April 20, 2010

Musings of Options Trading

Date :20-04-2010
Place: Office Desk

As the Readers(if any) know  that am jobless today also...so i  kept my hands on options. It started from 8.45 am when i switched on my mini and started seeing the news channel. Gentlemen over there in white shirt and Red tie was telling that NIFTY will be in range bound... hahaha...wow..we got to know that nifty now 5200 will be in range bound from 4900 to 5450 from this guy...hehe ....thats +_5%..any lame person who sees market movement can tell this..whats the big deal...this is how i thought after hearing that from a guy of well known brokerage firm..

Today is special day coz many people are coming in this news channel with a white shirt and red,black,green etc TIE and shouting in there microphone that market direction in shortterm will be decided by the RBI monetary policy which is going to come  later in the day...(by the time i wrote this..already they announced the policy , will talk on that later...) Now i also know this and closed all my positions in options the other day...coz anything can happen after the announcement .

BTW am watching CNBC news channel over web...and Udyain i guess he is the main reader.he looked very smart form my observation on his knowledge about different sectors and wide indepth analysis of questions he asks the speakers . i cam to know that rbi policy will be around 11.15 am ..and was watching the market trend as it approaches 11 ....and its unable to break 5225...for quite some time..so i bought nifty 5200 put at 55 and waited for the rbi announcement....even though many speakers said that RBI will go for normal hike of 25 bps..in expectations of market...but some how i was not convinced by that..and was expecting RBI to make some tougher stand of going for 50 bps..coz of the inflation and run up of metal ,oil prices..some how it didn't happen..i guess RBI  were under different assumption(May be of uncertainty of monsoon and growth in private demand)..

The announcement of policy was taken in positive way and market reacted by jumping 30 points instantly and premium went to 40 rs ...so am on loss of 750 rs.(MTM..Market to Market)....l was bit disspointed coz intially i placed order at 40 and later changed it to 55...so a bit disappointed coz i missed that oppourtinity..anyway its over..so went to office..and from there..i did watch nifty for some time..and it was finding difficult to break 5250 and again i went for another lot nifty 5200 put for around 41 rs...in a matter of few mins...market started feeling the pressure and it dropped..a few points..and due to volatility premium again went back to 56 ..after drop of 20 points..to 5235...so i squared of here..for 56 rs and got a profit of 750 Rs and my second lot....now market at end of day is not going down..and struggling to go up or down..and i placed nifty 5300 call for 25 rs and got executed and later in day it went to 30..but still i didnt squared it off...

I hold 5200 put and 5300 call for now...just that i don't want to square 5200 for now..

hope market opens in Green in morning...so that i will square my call and again buy at lower price...

Thats all for now..c ya again later

PS: Office Desk is my IT Company Office Desk

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