My EOD Stock trades......updated regularly

[Nifty Trader]

Open Positions:

1) Ajanta Pharma bought on 13th Mar @ 436.45. SL below 541.9. CMP - 590
2) TVS Motor shorted on 9th Apr @ 42, SL above 35.25. CMP - 33.7
3) Voltas shorted on 17th May @ 104.8, SL 112.5. CMP - 95.65

Note: Words in Bold denote a change from the last post (esp. SL). Complete trading records can be found on Page 12.

 

[sanjuasrani]

Hi NT,

Can you explain in brief the concept behind taking a position in Futures, since you are holding positions for - a few days to weeks ?

How does it help ? and what if Futures position is not taken ?
Are you taking the Futures position in the reverse direction of your Cash position ? Are trying to cover any loss if the trend goes against you ?
What is the %age of Capital invested in the Futures position ?

Are your existing trades covered with Future position ?
Is it possible to give examples ?

Thanks in advance.

Cheers n Good Luck towards your Target.

Rgds,
SA

These questions are coming since I am a total novice at this system of Futures.

 

[Nifty Trader]

Hi NT,

Can you explain in brief the concept behind taking a position in Futures, since you are holding positions for - a few days to weeks ?

How does it help ? and what if Futures position is not taken ?
Are you taking the Futures position in the reverse direction of your Cash position ? Are trying to cover any loss if the trend goes against you ?
What is the %age of Capital invested in the Futures position ?

Are your existing trades covered with Future position ?
Is it possible to give examples ?

Thanks in advance.

Cheers n Good Luck towards your Target.

Rgds,
SA

These questions are coming since I am a total novice at this system of Futures.

Hi Sanju. Futures position is taken as while shorting you can carry Futures overnight whereas if you short stocks in the Cash market you have to square off by the end of the trading day. So its a matter of compulsion. Of course, if you have large capital then Futures enables you to get in and out of positions fairly easily because of the large lot sizes. Futures and cash market prices are more or less the same, fyi.

I dont enter Futures to hedge. I enter only when I see a good stock that I want to short. So if I am long in 2 positions I will not take a short unless the short is worth taking and vice versa. See today's market action - Nifty was down 0.5%, Ajanta Pharma (long) was up more than 3.5%, TVS (short) was down more than 2%, Voltas (short) was down more than 4%. So we are outperforming on both sides (long and short) simultaneously. This can happen only when there is substance behind entries (long and short). Adding a short just for the sake of hedging is not ideal. The short also has to perform.

Ideally, the futures position (lot size x share price) should be around the same position size as all your other positions incl. longs. However, due to fixed lot sizes which dont change quickly enough, you may not have equal position when you enter Futures if your capital is not big enough. In such cases, some discretion is needed to make sure that the potential loss is manageable and does not eat into profits earned on the longs or other shorts.

E.g. your trading capital is Rs. 5,00,000 divided into 4 parts. Now you have taken 1 long and position size on that is Rs. 1,25,000. Now you might enter a short pos in Futures where the share price might be Rs. 250 but the lot size might be 1000. So when you enter your 1 short position will be Rs. 2,50,000 whereas each position should ideally be around Rs. 1,25,000. So if your SL is hot in Shorts you would have lost money on Rs. 2,50,000 while if you make money in the long pos, you would have made money only on Rs. 1,25,000.

So Futures is just a tool that is there for your benefit and if you want to short and keep overnight positions then this is the only way you can do it. Hope this clarifies some of your doubts

 

[Nifty Trader]

Open Positions:

1) Ajanta Pharma bought on 13th Mar @ 436.45. SL below 541.9. CMP - 607
2) TVS Motor shorted on 9th Apr @ 42, SL above 35.25. CMP - 33
3) Voltas shorted on 17th May @ 104.8, SL 112.5. CMP - 91.35
4) Natco Pharma bought today (23rd May) @ 382, SL below 352.7. CMP - 380

Note: Words in Bold denote a change from the last post (esp. SL). Complete trading records can be found on Page 12.

Highlights:

Nifty down by 0.6%. Long (Ajanta) up by 3%. Shorts (TVS and Voltas) down by 2.5% and 5% respectively. Always nice when longs and shorts perform well in opposite directions on the same day and outperform the index as well

Natco Pharma bought today. Normally, I wouldnt buy 2 stocks from the same sector (esp. since my total positions rarely cross 5 at one time) but we cant be rigid always. Stock seems well placed so have to to give it a shot. The only negative is that it has run up quite a bit today and my entry trigger was at the higher end. Anyway, lets see how it pans out over the next few days.

 

[Nifty Trader]

Open Positions:

1) Ajanta Pharma bought on 13th Mar @ 436.45. SL below 541.9. CMP - 626
2) TVS Motor shorted on 9th Apr @ 42, SL above 34.8. CMP - 33.45
3) Voltas shorted on 17th May @ 104.8, SL above 100.2. CMP - 90.8
4) Natco Pharma bought on 23rd May @ 382, SL below 352.7. CMP - 389

Note: Words in Bold denote a change from the last post (esp. SL). Complete trading records can be found on Page 12.

Highlights:

Nifty = +2.25%
Long 1 - Ajanta Pharma = +3%
Long 2 - Natco Pharma = +2.5%
Short 1 - TVS Motor = +0.9%
Short 2 - Voltas = -0.6%

Market went up & so did the longs. The shorts however did not go up. In fact 1 of them went even lower even though Nifty was up a good 2.2%. Although this is just 1 day's action, the same thing plays out in larger time frames as well.

The Sensex hit 23,000 (near all time high) on 5th Nov, 2010. Although the level was the same as that achieved in Jan 2008, most people's portfolio's would not have reached breakeven. In fact, they would have been down an average of 25-50%. Add to it the opportunity cost (the money that you would have earned in a fixed deposit for instance) and you have lost even more.

Focus on good stock selection and forget about the broad index. Remember, even the Sensex and Nifty keep adding / removing stocks that make up the index based on performance. So why should our attitude be different? Still I see people holding onto losers in hope that they will turn around one day. They may but they may also take a helluva long time doing it. We all have a limited time on earth so time is really important

 

[Nifty Trader]

Still I see people holding onto losers in hope that they will turn around one day.

Just for the record, I have also made the above mistake plenty of times in the past Stop Loss is the most important part of my trading dictionary now.

 

[Nifty Trader]

Open Positions:

1) Ajanta Pharma bought on 13th Mar @ 436.45. SL below 541.9. CMP - 647
2) TVS Motor shorted on 9th Apr @ 42, SL above 34.8. CMP - 34.05
3) Voltas shorted on 17th May @ 104.8, SL above 100.2. Trailing SL hit. Exited @ 100.4. Profit = +4.2%
4) Natco Pharma bought on 23rd May @ 382, SL below 352.7. CMP - 413

Note: Words in Bold denote a change from the last post (esp. SL). Complete trading records can be found on Page 12.

Highlights:

Nifty = +0.30%
Long 1 - Ajanta Pharma = +3.4%
Long 2 - Natco Pharma = +6.1%
Short 1 - TVS Motor = +1.8%
Short 2 - Voltas = +12.6% (Trailing SL hit; position exited with gains of 4.2%)

Ajanta Pharma continues its magnificient run. Very close to reaching 50% in open position profits in a little over 2 months.

Natco Pharma was the star of the day. Was up more than 10% intraday though closed with 6% gains.

Voltas results were announced after market hours yesterday. Results must have been good I suppose as the stock opened gap up and remained strong through the day taking out the trailing stop loss on the short position. Voltas low after shorting @ 104.8 was 88.75 yesterday but today was up more than 12%. Slightly dissapointed as the position was in very good profits but these things happen in trading.

 

[prst]

Open Positions:

1) Ajanta Pharma bought on 13th Mar @ 436.45. SL below 541.9. CMP - 647
2) TVS Motor shorted on 9th Apr @ 42, SL above 34.8. CMP - 34.05
3) Voltas shorted on 17th May @ 104.8, SL above 100.2. Trailing SL hit. Exited @ 100.4. Profit = +4.2%
4) Natco Pharma bought on 23rd May @ 382, SL below 352.7. CMP - 413

Note: Words in Bold denote a change from the last post (esp. SL). Complete trading records can be found on Page 12.

Highlights:

Nifty = +0.30%
Long 1 - Ajanta Pharma = +3.4%
Long 2 - Natco Pharma = +6.1%
Short 1 - TVS Motor = +1.8%
Short 2 - Voltas = +12.6% (Trailing SL hit; position exited with gains of 4.2%)

Ajanta Pharma continues its magnificient run. Very close to reaching 50% in open position profits in a little over 2 months.

Natco Pharma was the star of the day. Was up more than 10% intraday though closed with 6% gains.

Voltas results were announced after market hours yesterday. Results must have been good I suppose as the stock opened gap up and remained strong through the day taking out the trailing stop loss on the short position. Voltas low after shorting @ 104.8 was 88.75 yesterday but today was up more than 12%. Slightly dissapointed as the position was in very good profits but these things happen in trading.

good that u kept a strick TSL for Voltas , so that u didnt end up in loss.
I had been in such situations, when a good profit ended in breakeven or little loss.

 

[Nifty Trader]

good that u kept a strick TSL for Voltas , so that u didnt end up in loss.
I had been in such situations, when a good profit ended in breakeven or little loss.

Thanks. Yes, adherence to SL is extremely imp. whichever system you follow. Imp. for a trader to realise that as long as he trades in the market, there will always be losses even if the trader is a retail guy, an HNI or an FII. The key is to keep the losses small.

 

[v_karthikk]

very good trades