Options Trading 29th May 2018 – Trade Bank Nifty 28th June 25500 CE
Entry – I had taken entry in June 2018 series 25500 Call Option at average price of Rs. 650. I selected June series as I needed time decay in my favor plus when I took entry, Bank Nifty and market in general was facing some selling pressure. Wanted to safeguard investment as I buy large quantities and which is why did not want to get into weekly options or current expiry option. If you see, my strike price selection was also conservative due to overall concerns in market (Low breadth, low turnover, volatility).
Exit – Exited the Option at 1050. Today Bank Nifty gaped down. I have marked one horizontal range on chart in Green. This is today’s price action. Furthermore I have marked two Candles (one in Dark Yellow and another in Red). Exit conditions were based on Candle 1 and Candle 2 marked on the chart below.
Candle 1 was a gap down candle in Bank Nifty. Price then moved sideways forming two more candles. Candle 2 (4th Candle of the day) made day’s high and then made day’s low simultaneously. This was sign of Price heading further lower as price faced rejection at higher level and then moved lower to form a new low.
Going Forward – Despite today’s negative move and overall global sentiment, I am still open to trading only Call options. I will wait for entry conditions to show up. Strike price selection will again be conservative. Not the time to trade aggressively in Options just yet.