Help me to understand this trading technique

#1
Hi,

I Want experts reviews on this trading technique.

Let's assume I buy for delivery in Zerodha:
Yesbank Shares : 1750
Yesbank Future: Short

Now, Stocks get credited to my demat account in T+3 days.

On 4th day In morning I exit both of my positions from my account.
So, Now Zerodha will have my open position of 1750 shares sold.

======
If Yesbank share go down
On the same day evening If yesbank share go 5 points below from my selling price.
Now, My open position will be 1750*5 = 8750Rs. profit.

I will buy my share again and buy the future again for the next day.

Is this will be okay or Any other thing may happen here?

[Edit]
Please don't put comments for Brokerage.
 

sanju005ind

Investor, Option Writer
#2
Hi,

I Want experts reviews on this trading technique.

Let's assume I buy for delivery in Zerodha:
Yesbank Shares : 1750
Yesbank Future: Short

Now, Stocks get credited to my demat account in T+3 days.

On 4th day In morning I exit both of my positions from my account.
So, Now Zerodha will have my open position of 1750 shares sold.

======
If Yesbank share go down
On the same day evening If yesbank share go 5 points below from my selling price.
Now, My open position will be 1750*5 = 8750Rs. profit.

I will buy my share again and buy the future again for the next day.

Is this will be okay or Any other thing may happen here?

[Edit]
Please don't put comments for Brokerage.
Your New Buy and sell price will be considered for the respective instruments and they will be your new open positions.
 

praveen98

Well-Known Member
#3
Hi,

I Want experts reviews on this trading technique.

Let's assume I buy for delivery in Zerodha:
Yesbank Shares : 1750
Yesbank Future: Short

Now, Stocks get credited to my demat account in T+3 days.

On 4th day In morning I exit both of my positions from my account.
So, Now Zerodha will have my open position of 1750 shares sold

.
Hi Suryameet,
If you square off both the positions...How come 1750 shares sold will be a open position? Are you going to sell it in MIS and cover it in the afternoon? In that case instead of falling if stock rallies you will convert the order to CNC?
Even if the idea plays out as you wanted it to be..i think stock futures oscillations between premium to discount will be a big risk. I think your idea is to buy one lot of XYZ share in cash market and trade it from short side in CM in MIS without risk to capital.
If that is your idea my suggestion is you buy stock and an ATM or ITM PE simultaneously and trade the stock from short side for a contract month of around 20 trading days....and if you can make 2or 3 short trades for 5 to 6 rupees you will break even above your costs (PE costs) and if you make 2 or 3 more successful trades .. you will be in profit..The profitable trades is OK...But what if you make losing trades? Back test the idea with your system of shorting and see how it works....:)
Hope this helps..:up:
 

mohan.sic

Well-Known Member
#4
Hi,

I Want experts reviews on this trading technique.

Let's assume I buy for delivery in Zerodha:
Yesbank Shares : 1750
Yesbank Future: Short

Now, Stocks get credited to my demat account in T+3 days.

On 4th day In morning I exit both of my positions from my account.
So, Now Zerodha will have my open position of 1750 shares sold.

======
If Yesbank share go down
On the same day evening If yesbank share go 5 points below from my selling price.
Now, My open position will be 1750*5 = 8750Rs. profit.

I will buy my share again and buy the future again for the next day.

Is this will be okay or Any other thing may happen here?

[Edit]
Please don't put comments for Brokerage.
First you shorted the future, then on t+3 day you covered the short position, means you bought the future. Then again in evening if you have to square off the position - You must sell the future. Where as you mentioned above as Buy the Future. Correct it.

And about your technique - it is more or less junk.