My Daily Options Trading Diary

[findvikas]

Do post the trades where you lost the 23k so that we can dissect it.

I did, it was SAIL one BIG loser, "at that time"... and a stupid mistake... of booking it 2 days before

I had SAIL 170CA @ Rs. 7.. my target was 11 as was expecting to cross SAIL above 175.. it started to decline and decline and looking at the days remaining I decided to book my losses. and look at it today... 11.25... right on my target

The loss of 33000 could have been a profit of 34425 if I holded it till today... what a loser

It was showing as 23000 instead of 33000 as I adjusted the loss with other profit from the day.

 

[findvikas]

My paper trade update,...

Bought TATASTEEL 500CA on 11th September for 5.5
Sold today @ 36, target was 30

Bought ICICIBANK 840 CA on 11th September for 22.5
Sold today at 35.5... target was 35

Bought Sesagoa 220 CA on 7 September for 10.5
Sold today at 47... target was 30

 

[aditya14]

I did, it was SAIL one BIG loser, "at that time"... and a stupid mistake... of booking it 2 days before

I had SAIL 170CA @ Rs. 7.. my target was 11 as was expecting to cross SAIL above 175.. it started to decline and decline and looking at the days remaining I decided to book my losses. and look at it today... 11.25... right on my target

The loss of 33000 could have been a profit of 34425 if I holded it till today... what a loser

It was showing as 23000 instead of 33000 as I adjusted the loss with other profit from the day.

Oh man iam sorry to hear that.But iam sure you learnt something.It is these small defeats and the ability to stay in the market which will help in long term.Or we will become bank robbers...

 

[findvikas]

I analyzed everything and calculated the target exactly right... its just that watching the losing bet is not an easy task

Oh yeah, I am learning my lessons... the losses are my tuition fee to learn trading.

 

[findvikas]

Till 16/09/2009

Today's trade...

• Closed my 24lots of 5000CE at 39, bought at avg. of 34... adjusted the profit with the previous holding of 15lots of 5000CE and brought the over all price of 5000CE x 15 to 33.5.. from initial buy price of 50
  
• Added some more lots of Suzlon and betting BIG time on Suzlon
  
• Added one more lot of IDBI
  
• Went long again in RIL 2160CA with 5lots at 50.5, adjusted value of RIL 2160CA came down to 45 for the month
  
• Injected the withdrawn 15k back into trade, overall monthly return increased from 15% to 21%
  

PS.: You might see the booked profit decreased from 15k to 10k but that is because I opened few closed positions and brought down the average price of those earlier closed calls.. like Reliance 2160CA in this case which was earlier bought at avg price of 52 x 4 lots ... now the price came down to 45 x 5 lots.

 

[lazytrader]

The loss of 33000 could have been a profit of 34425 if I holded it till today... what a loser

You can't do that.

a loss of 33k is a loss of 33k. it can't be a profit. You have to give up the idea of holding or wait for it to come back. If you have that mentality towards your trades then it would be bad for your trading since you will hold losers longer to wait for a turn around to close at a profit or atleast a BE.

You have to place a SL, if you lose more that that SL then you have to close the trade at the loss. In doing that you will lose money for the trade but what you will also do is save money by preventing further loss and save a whole lot more doing it for many more losing trades. Over the long term you would have a lot of money saved by just cutting losses!

Besides as I mentioned earlier, if you risk 1% of your account size then on 1L risk should be 1k. If the contract is too large that you can place a sensible stop (below a support with enough wriggling room for the scrip) don't trade it. this is because over the long term if your win-loss ratio is not more than 1:1 then taking greater risk than reward (RR=1:1) is a sure fire way to lose money. Statistically there is no way you can make money, but that is valid if and only if - you can survive taking more than three 33k losses with a 1 lakh account size.

Options will add another layer of complexity to it - a script lets say has support at 100 and you buy CA 100 the scrip may not move down because of the support and stay at 100, but the time value of the option keeps decreasing. Moreover the longer the script stays at 100 the higher it will need to move for you to achieve your target price. It may do that not to say that it wouldn't. But the point is if you have the perfect ananlysis, lets say support at 100 and target at 110 your scrip might get there but the time it takes to do so will eat into your profits. Besides, if it doesn't more up rapidly then the gain in underlying will be negated by loss in time value. Which is the reason why most option buyers lose money.

 

[lazytrader]

update your spreadsheet on google
http://spreadsheets.google.com/ccc?key=0AsC1qV6Wtd1xdDh1MzN6MFh5VzNhclBsV1RaQXJHVHc&hl=en

 

[findvikas]

update your spreadsheet on google
http://spreadsheets.google.com/ccc?key=0AsC1qV6Wtd1xdDh1MzN6MFh5VzNhclBsV1RaQXJHVHc&hl=en

Thanks Buddy.. I have updated it, two of today's paper trade were real money trade as well.

TCS - 34% return (intraday)
BHARTIARTL - 65% return (intraday)

RELIANCE - WHAT A LOSER ... I have averaged it down to 22 and my target is at least 30 by Monday

 

[findvikas]

Till 17/09/2009

It was a very good day in one sense as I had booked a profit of 50k in a single day.

Today's trade...

• Sold my entire NIFTY 5000CE at 54 , a profit of 13.5K
• Intraday TCS , profit of 16.5K ( bought 5000 at 10.4, sold at 14)
• Intraday BHARTIARTL , profit of 15.5K (bought 3000 at 8.4, sold at 14)

I then decided to inject entire profit into RIL to bring down the cost of holding of my 2160CA to 22.5 from 46 as earlier. Also reduced the targets from earlier 75 to more realistic targets of 30-35

 

[findvikas]

Small EDIT... I have 4000 as cash in my account for today instead of 2000 mentioned.