Transaction to be done on 05.11.2013 for Base Index at 6317.35:
Buy 6600 CE at Price 24.40
Sell 6400 CE at Price 87.25
Sell 6500 CE at Price 49.50
Net Points Received: 112.35
Very Important:
Either do not enter into trade, if enter, be sure to make all the three trades at one go. If you do two trades and miss one trade, then this strategy might result into huge losses. So, this is not for novice but only for Advanced Traders.
Profit / Loss in points (To convert to rupees, multiply it with 50):
Profit if Index is less than and equal to 6400 on 28.11.2013 is 112.35
Profit for Index equal to 6500 on 28.11.2013 is 12.35:clap:
Loss for Index equal to 6600 on 28.11.2013 is -187.65
Loss for Index equal to 6700 on 28.11.2013 is -287.65
Summary:
(1) If Nifty remains within 6,400 on 28.11.2013 there is profit of 112.35 points minus commission and STT. Nothing to do.
(2) If Nifty goes above 6,500, it may result into loss. You may argue that Nifty never crossed 6,400 till date, so it will not cross 6,500 now also. There may be less probability but it is not impossible. So, there has to be exit strategies in case of Nifty crosses above 6,500.
There are three possible exit strategy depending upon the timings of the market and the person's mood and funding:
(1) If Nifty crosses 6,500 marks near 28th November (say 26th or 27th), do nothing and pray that it comes below 6,500. In stock market, there is no free lunch. Losses are part of life. Successful traders bank on probability and do more winning trades than losing trades. There is no trade with 100% success rate.
(2) If Nifty crosses 6,500 marks by 20th or 21st, you can go long 2 Nifty at 6,500. But, you have to avoid whipsaw and put stop loss. The advanced traders know how to manage this.
(3) If Nifty crosses 6,500 marks by 10th or 11th and you have sufficient funds, you can create new position in such a way that if Nifty remains 6200 and above, you will gain 100+ points. That means, it is possible to take new position such that you will gain 100+ points provided Nifty remains 6,200 and above by 28th November. If it comes below 6200, you may incur heavy losses. Here, probability plays major role. First of all, the probability of crossing 6,500 marks by 10th or 11th is very less. If it crosses beyond 6,500 marks, it is sill less likely that Nifty goes below 6,200 by 28th November 2013. However, nothing is impossible and you should be mentally ready to take losses.
Disclaimer: I shall not be responsible if anybody does any trade based on the above guidance. The above strategy is only for advanced traders (and not for novice). I neither share your profit so not ready to share the loss.
Panna Lal Patodia
Buy 6600 CE at Price 24.40
Sell 6400 CE at Price 87.25
Sell 6500 CE at Price 49.50
Net Points Received: 112.35
Very Important:
Either do not enter into trade, if enter, be sure to make all the three trades at one go. If you do two trades and miss one trade, then this strategy might result into huge losses. So, this is not for novice but only for Advanced Traders.
Profit / Loss in points (To convert to rupees, multiply it with 50):
Profit if Index is less than and equal to 6400 on 28.11.2013 is 112.35
Profit for Index equal to 6500 on 28.11.2013 is 12.35:clap:
Loss for Index equal to 6600 on 28.11.2013 is -187.65
Loss for Index equal to 6700 on 28.11.2013 is -287.65
Summary:
(1) If Nifty remains within 6,400 on 28.11.2013 there is profit of 112.35 points minus commission and STT. Nothing to do.
(2) If Nifty goes above 6,500, it may result into loss. You may argue that Nifty never crossed 6,400 till date, so it will not cross 6,500 now also. There may be less probability but it is not impossible. So, there has to be exit strategies in case of Nifty crosses above 6,500.
There are three possible exit strategy depending upon the timings of the market and the person's mood and funding:
(1) If Nifty crosses 6,500 marks near 28th November (say 26th or 27th), do nothing and pray that it comes below 6,500. In stock market, there is no free lunch. Losses are part of life. Successful traders bank on probability and do more winning trades than losing trades. There is no trade with 100% success rate.
(2) If Nifty crosses 6,500 marks by 20th or 21st, you can go long 2 Nifty at 6,500. But, you have to avoid whipsaw and put stop loss. The advanced traders know how to manage this.
(3) If Nifty crosses 6,500 marks by 10th or 11th and you have sufficient funds, you can create new position in such a way that if Nifty remains 6200 and above, you will gain 100+ points. That means, it is possible to take new position such that you will gain 100+ points provided Nifty remains 6,200 and above by 28th November. If it comes below 6200, you may incur heavy losses. Here, probability plays major role. First of all, the probability of crossing 6,500 marks by 10th or 11th is very less. If it crosses beyond 6,500 marks, it is sill less likely that Nifty goes below 6,200 by 28th November 2013. However, nothing is impossible and you should be mentally ready to take losses.
Disclaimer: I shall not be responsible if anybody does any trade based on the above guidance. The above strategy is only for advanced traders (and not for novice). I neither share your profit so not ready to share the loss.
Panna Lal Patodia