Trading for Living -- Successfully Completed one year as Full Time Trader

[VJAY]

Yes, I understand that very well.

Since the expected price has hit almost on the very same itself(closely) and that the expiry is very very far from now, premium would move up exponentially from here on for any more fall.

Plus, his desired rate to purchase the stock is almost in.

Keeping these two into consideration, I wanted to see an ace trader/investor’s move in this situation.



Cheers
AK

I personally seen 2 traders trade like this since 4-5 years ...they never bother about day to day acts of market they well capitalised traders ...they always look to catch stocks (mostly of nifty 50) playing this kind Writing PE's of their desire rate...They never feel of loss in PE writing as they mostly @ 3.28-3.30 buy stocks for delevery on expiry day.then they they start selling CE's ....actually they are long term investors....

 

[amrutham]

I personally seen 2 traders trade like this since 4-5 years ...they never bother about day to day acts of market they well capitalised traders ...they always look to catch stocks (mostly of nifty 50) playing this kind Writing PE's of their desire rate...They never feel of loss in PE writing as they mostly @ 3.28-3.30 buy stocks for delevery on expiry day.then they they start selling CE's ....actually they are long term investors....

This is a good way of building equity portfolio. But the catch is your trading profits should be able to cover the purchage .
I was trying this since I started full time and was successful only once. I bought Infy shares with an effective price of around 880.Sold 900 pe at that time and there was a good fall in stock price due to company specific news.

 

[arunkarthik]

I’m a bit curious to understand what would your move be for Tata motors - as buying the stock in delivery for long term was your core intention.

It’s almost close to 275 now itself and the 270 put is commanding a premium close to 8.5

Let us know. Thanks.


Cheers
AK

By expiry if it closes below 270, it does not matter how much lower it closes.

Where ever it closes, my effective buy price will be 265*1500 = around 4 lakhs

Thanks for the explanation, but I’m sorry that I couldn’t comprehend it completely.

If by July expiry, tata motors expire by, say 250, wouldn’t you have to book a loss of 15rs (265-250) for a lot for your put?


Cheers
AK

 

[VJAY]

This is a good way of building equity portfolio. But the catch is your trading profits should be able to cover the purchage .
I was trying this since I started full time and was successful only once. I bought Infy shares with an effective price of around 880.Sold 900 pe at that time and there was a good fall in stock price due to company specific news.

Yes amrutham....I seen him buying BHEL.COALINDIA,SBI,RELIANCE,Yesbank in this way...also he said he many time got the money doing this to buy those scrips.....He every month earning in thse scrips writing CE's now ...

 

[amrutham]

Thanks for the explanation, but I’m sorry that I couldn’t comprehend it completely.

If by July expiry, tata motors expire by, say 250, wouldn’t you have to book a loss of 15rs (265-250) for a lot for your put?


Cheers
AK

In this case i will buy at 250. Including the loss of 15 from short option,effective price is 250+15= 265

 

[arunkarthik]

Thanks for the explanation, but I’m sorry that I couldn’t comprehend it completely.

If by July expiry, tata motors expire by, say 250, wouldn’t you have to book a loss of 15rs (265-250) for a lot for your put?


Cheers
AK

In this case i will buy at 250. Including the loss of 15 from short option,effective price is 250+15= 265

Alright, that way. Got it.

Thanks for the explanation



Cheers
AK

 

[amrutham]

Yes amrutham....I seen him buying BHEL.COALINDIA,SBI,RELIANCE,Yesbank in this way...also he said he many time got the money doing this to buy those scrips.....He every month earning in thse scrips writing CE's now ...

How long he has been trading?

If we can build a portfolio of 10-12 fundamentally strong stocks, I think we can generate reasonable amount of income which can cover most of monthly expenses.

 

[VJAY]

How long he has been trading?

If we can build a portfolio of 10-12 fundamentally strong stocks, I think we can generate reasonable amount of income which can cover most of monthly expenses.

Actually I know him since long but came to know about his trading 4-5 years before ..He never disclosed as he trading in market ...silent trader ...though we can call him investor not trader...

 

[superman]

Actually I know him since long but came to know about his trading 4-5 years before ..He never disclosed as he trading in market ...silent trader ...though we can call him investor not trader...

I feel this is very dangerous thing to do ,, More than trading itself.

After buying one lot worth of stock, what will he do if it continues to fall ? Selling CE's gives you very little money compared to the huge loss,, This is catching the knife and is hell risky

Lets not forget even RCOM was part of NIFTY50 and it was strong 4-5 years ago .

 

[VJAY]

I feel this is very dangerous thing to do ,, More than trading itself.

After buying one lot worth of stock, what will he do if it continues to fall ? Selling CE's gives you very little money compared to the huge loss,, This is catching the knife and is hell risky

Lets not forget even RCOM was part of NIFTY50 and it was strong 4-5 years ago .

Its free income when holding his scrips ....he is investor...most of investor not doing anything ....but his 1/2 of portfolio came from free money