Nifty was all over again, I have never seen any Index behaving in this manner in my entire trading carrier. Let us see where do we stand with respect to our Trade.
First the facts:
Nifty future LTP (Expires 25th August, 2005. Rs.2328.00
Short 5 Calls SP2380 Rs.2.40
Short 10 Calls SP2400 Rs.1.95 X2=3.90 (Because of 10 Contracts)
Short 5 Puts SP2340 Rs.21.60
Short 5 Puts SP2380 Rs.50.15
Total Market Value 78.05 x 500 = Rs.39, 025.00
Short 500 Nifty Future Rs.2366.20 (Opening Price)
Covered 200 futures at 2324.00 (2366.20-2324=42.20x200=8440 (Profit)
Open Position Short 300 Nifty future LTP 2328.00 Unrealized profit from this position is
2366.20-2328=38.20x300=11460.00. Thus the realized and unrealized profit from this position is
11460+8440=19,990.00.
Now let us add this to the total premium we have collected which is 34,424.00. By adding these two numbers we will have total premium and profit from the Nifty future trade. 34,424.00+19,990.00=54,324.00
If we were to close the position as of now than it will cost us Rs.39, 025.00 Thus leaving us profit of Rs.15, 299.00 (54,324.00 39,025.00=15,299.00)
Despite the roller cost ride by the Nifty and we have been wrong more often, we still are in good shape.
Normally it is not a very good step to close the short future position, which we have done here. But that is my trading style. Per the rules of this trade, one should not take an action like this just because we still have two things going against us. First, the 5 puts of SP2340 and secondly the 5 puts of SP 2380. On top of that we have just small premium left, to safe us from any potential losses.
Let us see what tomorrow brings for us.
If Nifty keep going south we will add to our short position of Nifty futures, say 700 future contracts to cut any potential loss.
I will post in real time if any such action is taken.
Wastej