Advice required - Banknifty 29Jun expiry

Nifty & Bank Nifty discussions
1

Hi,

Not sure whether this is an appropriate question but I am worried that I might incur a big loss and hence seeking some advice.

I have the following positions currently

Product,Instrument,Qty.,Avg.,LTP,P&L,Chg.
NRML,BANKNIFTY23JUN43800CE,25,282.05,172.2,-2746.25,-38.95
NRML,BANKNIFTY23JUN43900CE,150,346.14,130.4,-32361.25,-62.33

Analysis on Sensibull shows the following
Max Profit Unlimited
Max Loss -58,973
Breakeven at Expiry 44223
Probability of Profit 16%

Does it make sense to add lots into each of these position so that the average price comes down?

I was keen to know as to is there any way to predict the profit or loss which I will incur based on the current scenario. Can someone guide me?

Thanks
Sachin

2

From what I can understand, you have a bullish position in BankNifty by being long on 43800 and 43900 calls.

Nobody can predict whether the market goes up or down from here. Markets are all about probabilities and as traders, our job is to maximize our winning trades and minimise our losing trades.

If you’re worried, then it usually means that you’re not comfortable with the position or the potential loss. The decision is obviously in your hand whether to square off or add or hold your position.

Anyone who says with any kind of certainty that the market will do this or that next week is fooling you. There’s nothing set in stone. Only probabilities!

3

If you are asking this, my advice will be to stop trading completely until you are actually ready. Trading haphazardly like this will lead to capital loss eventually. You need to have an edge, understand that edge and apply it consistently taking managed reasonable risks per trade.

To trade profitably, along with edge.

  1. You should already be comfortable in taking losses
  2. Should already have some idea of your max loss per trade and be comfortable with it.
  3. And have some idea on what your historical max Drawdown was and be comfortable if market gives you more than that too ( say 2x).

As above post said, Nobody knows what will happen with certainty, anything can happen. Maybe averaging will work and market bounces back. Maybe market crashes 10-20%, One may be more likely but other is possible and should not lead to devastating loss.

For whatever reason, people tend to start trading while being completely unprepared and then when possibility of a loss hits they want to add fuel to the fire. Sometimes, it works but when it doesn’t, you are dead. Not saying averaging is always bad but for unprepared guys it almost certainly is. Because of this need to avoid loss, people eventually take a much larger loss. When i started out, i guy on another forum ended up losing everything including house and had to start work as a waiter.

Need time travel. Else only way to control max loss is to either get out or hedge this position or put stop loss ( but can gap for overnight positions).

But to trade profitably, you should already know your exit plan before you enter.
Markets are very docile right now, with very less fear. If you cant digest these kind of moves, then imagine what happens when its much more volatile.

4

Thank you for your views @SpacemanSpiff and @Suyash.K . I really appreciate it. Let me give this a thought and take a call.

5

Dear All,

I went into a big loss (40 k plus) in this trade. But, I would like to know whether there is any training which you could suggest. I am interested in trading in Bank Nifty options. Let me give you a background and maybe someone could suggest a good training institute.

  1. I am 57 years old
  2. Currently I do not have a job
  3. I am looking for some good quality training on bank nifty options
  4. My budget is limited (<= Rs 10000)

Looking for some advice

Thanks
Sachin

6
  1. Please beware that most people lose money in trading. Learning some course wont change that. Z boss himself has said that only 1-2% make above FD.
  2. Losing your capital at this age might be a difficult blow. Please make sure that no matter how confident you are, trade with only small capital that you can afford to lose - and be ready to lose money. It can take 3-5+ years to learn to trade - Taking a course will not magically change that. Most stuff on internet probably has no value.
  3. Trading is not for everyone. Even after you do everything right and have the knowledge and have put in years to acquire the skills, it is a game of probability where edge develops through law of large numbers. ie you keep taking your trades, accept short term noise and losses - and at some point equity curve moves up. This is the case at every point of time. So what that means is that trading is not a way to get a salary. Its more like investing where you have to wait - but with shorter turnaround time and better reward/risk. Understanding and accepting above also needs a shift in mindset and that takes some time.
  4. You asked for something specific and i don’t have answer to that. But what i can say is that my trading is based on the work of Adam H Grimes. You can look up him, he has published lots of freely available info including couple of free courses ( free does not mean its useless ). His first book was great too and does not cost too much if you find blog/course useful. He has some paid stuff too but i did not need it.
  5. Even after 4, we cannot copy anyone 1:1. I don’t trade like him. You wont get an easy fix here. One has to integrate all info he has and create his own approach , test it on past and live data and then trade if it works. Rinse and repeat.
  6. Getting system from someone else and trading it blindly without 4/5 is probably not going to work. System itself might work, but one needs to understand it thoroughly to have confidence to keep pushing through difficult periods without making errors/giving up. Also markets can change and evolve. There is no guarantee that any system will continue to work forever. Fixing/moving on will probably required 4/5.

Good luck

7

Options Theory for Professional Trading - Varsity by Zerodha is a good starting point. its free, the only fees you need to pay is your time!

after you complete the reading, the next book to read will automatically appear !

8

Hello @SpacemanSpiff - Thank you for the detailed response. I will go through the works of Adam H Grimes.

9

Thank you for the suggestion @viswaram