SL hit in HDFC yesterday but could not exit due to settlement holiday. Exited to day at 1865 with 0.5% Loss.
- Entered Tata Steel at 493.3 for selling tomorrow morning at opening. More like a BTST.
Would have hedged the position by buying 480PE at 4.65 to cover overnight risk.
- Entered Auropharma at 722.5 for target of 745 and SL at 705. RRR is about 1.4
Would have hedged by 700PE at 6.
Auropharma trading at 728 but expecting the price to be sideways today. Hence 700 PE will be carried forward. SL revised to cost price.
Trailing SL hit in Auropharma at 723. Exited at cost price.
700PE will be carried forward and will be closed when cost price is reached.
AuroPharma 700PE closed at 4.5 with 1.5K loss.
Todays learning in Auropharma.
Entered at 722.5 for target of 745 with SL at 705.
Price went up to 730 in the morning which is 1% above the cost price. The SL was revised to 723 to avoid the trade to go in to loss. However there was hedging done by 700 PE to avoid any gap down risk due to overnight risk. The Put will result in loss due to time decay as the expiry is near in case of price staying flat.
My expectation of sideways movement was correct. There is 1% movement between the close and low price today.
The mistakes done in today’s trade.
- The SL would have been revised 1% above the original SL i.e. at 712 instead of 723 to stay in the trade. Due to the fear/sideways movement of the stock, SL was revised to cost price which was very wrong.
2.Also the 200 days moving average was around 720 levels which acts as a support and the same happened today. The stock after hitting low of 720 rebounded to 722-723 levels for some time after which sharply risen to 730 levels.
One thing to be kept in mind while entering the trade is that the money which we will loose if SL hit is not a part of our capital anymore and is already gone. Like in this case SL was about 17.5 points which means that 17500 is already gone from our capital. If we are not comfortable with 17500 loss from a single trade, then trade is not to be entered.
Second thing about the hedging part, the trade was hedged with 700 PE which is 3% below from the entry price. the hedging was done to cover gap down openings due to overnight events/risks.
The hedging part was little confusing about exiting. The things which i was not thinking while in trade was
If our target is hit in the futures position we will be loosing 6/- of premium whereas the profit from futures position will be 23 points. hence Net Profit would be around 15 points (Rs 15000/-) which translates to 1.5% on a capital of 10L which is not bad.
If SL is Hit at 705 then 700PE would gain around 6 points (By taking 0.35 as delta as the put is OTM). the net loss would be 17.5-6=11.5 (11500/-) which was less than our expected loss of 15000/-.
The verdict from today’s trade is
Be ready to loose the predefined amount once you enter the trade.
Hold the hedge till traget or SL is hit. Only drawback is that we will loose around 1% of profit due to the hedge but we will be confident with hedge in place.
P.S. 1 Lot = 1000 Shares in AuroPharma
Thanks in advance.
Virtual Entry taken in Ibulhsgfin mar fut at 688.5 for target of 640 with SL at 717. Hedging done by buying Feb 720 CE Call.
Call option will be carried forward till the target is hit or SL is hit. Having hedge will give extra cushion to my mind.
Ibulhsgfin mar fut now trading at 674. Trailed SL to 688.5 which is my cost price and also 5 points above 30 days SMA.
Ibulhsgfin is very volatile stock with 3.5% daily volatility. Hence trailed the SL to cost price to reduce the risk of trade resulting in loss.
Ibulhsgfin Mar Fut closed at 684.5. Revised the SL again to 717 to cover the volatility in the opening tomorrow.
MTM for today -
Fut : 688.5-684.5 = 4500 = 2000/-
720CE: 8.5-4.95 = 3.55500 = -1775 /-
Net MTM = 225 /-
End of an volatile day. Stock has recovered almost 1.5% today from the days low of 674 to close at 684.5.
Exited Ibulhsgfin at 665 today. Exited the hedge at 3.95.
Reasons for exit:
The market turned volatile today.
There is 10 & 13days SMA standing around 660 which acts as as support.
Exited at around 660 levels which is almost 3% after deducting the loss from hedge.
I am very happy with the trade selection and execution.
Total profit : 9725 /-
No positions entered today.
Expecting volatility ahead in this week if any unforeseen events happen.
Capital protection is the primary task this week.
I remember one quote read in some book.
(1) If you don’t bet, you can’t win.
(2) If you lose all your chips, you can’t bet.
– Larry Hite, Market Wizards
Hi all…Resumed trading today after a gap of 3 days as indo-pak tensions seems stabilized.
Increased my capital size to 1.2 lakhs.
Will be doing trades with same risk management poilcy i.e. 2% risk maximum per trade.
Entered heromotocorp today at 2675 for targets of 2740/2799 with SL at 2615.
Entered Lupin at 788.75 with target of 820/835 witl SL at 760. Actually wanted to buy 50 shares at 780 but price went up sharply in last 15 mins. Will average if it falls 1-2% on Tuesday.
my fellow traders who are interested may post their trades/ideas here for learning purpose.
Happy weekend and thanks in advance.
My February month performance:
|S No||Stock||Buy/Sell||Entry Price||Target||SL||Exit Price||Reason for exit||Percentage Profit||Whether original target reached without hiitng entry price after my exit|
|1||Heromotocorp||B||2812.05||2925||2710||2855||Trailing SL Hit||1.53%||Yes|
|2||UPL||B||799||820||784||807||Trailing SL Hit||1.00%||No. Went upto 790 before reaching the target|
|6||Yesbank||B||219||250||214||219.5||Trailing SL Hit||0.23%||No|
|7||Infratel||B||304||318-320||298||317.5||Target Hit||4.44%||Yes. Made an high of 324 before falling back|
|10||Auropharma||B||722.5||745||705||723||Trailing SL Hit||0.07%||No. Made an high of 738.5|
|11||Ibulhsgfin mar fut(Virtual entry)||S||688.5||640||717||665||Trailing SL Hit||3.41%||No|
|12||Ibulhsgfin mar 720CE||B||8.5||NA||NA||3.95||NA||NA|
|No of trades done: 11|
|No of proftable trades: 6|
|No of trades exited at cost: 03|
|No of losing trades: 02|
|Max profit percentage: 4.4%|
|Max Loss percentage: 1.4%|
Exited heromotocorp around first target of 2740. Profit of 2.3%. Holding lupin.
Entered ibulhsgfin at 735 for target of 805 with sl at 710.
Entered HEG at 2260 fir target of 2420/2720 with sl at 2090.
Trailed SL to 740 in ibulhsgfin. No chance of loss in this trade. Expecting ibulhsgfin to touch 780 levels today.
Carrying HEG and Lupin
Trailing SL Hit in Ibulhsgfin at 748. Bad luck that i could not profit around 760 levels. Anyway one more profitable trade with 1.3% profit.
Trailing SL hit in Lupin at 789.75. Exited at cost. My view has been changed on lupin as stock didn’t move last two days even when market was positive.
Carrying HEG forward. No positions entered today due to some other work.
Exited HUL at 1719. Wanted to reduce the position size. Again entered at 1714 with less position size i.e. 25 shares.
Still Carrying HEG.
Exited Hindunilvr at 1750 with 2.1% profit.
Exited HEG at 2211 with 2% Loss.