My Daily Options Trading Diary

[findvikas]

I am also starting to paper trade in options, here is my PAPER TRADE diary. I will update it regularly.
http://spreadsheets.google.com/ccc?key=0AsC1qV6Wtd1xdDh1MzN6MFh5VzNhclBsV1RaQXJHVHc&hl=en

 

[findvikas]

Till 11/09/2009

No major action today... book one losing position which has no hope to give anything in return and went long in Reliance 2160CA.

 

[spiritunit]

Is this real trade or paper trade?

Till 11/09/2009

No major action today... book one losing position which has no hope to give anything in return and went long in Reliance 2160CA.

 

[findvikas]

These are real trades since for September series.

 

[saivenkat]

The only fundamental reason to coming to options was Leverage with known loss. Futures give you leverage but the risks are unknown.

I read somewhere that another point that needs to mainly considered while doing option trading, especially in stocks is that, of Volatility Index Ratio. (VIX) It plays a crucial role. Its my opinion.

 

[lazytrader]

I am no expert but I do have some concerns regarding your first post. I haven't read any other posts in this thread yet.
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I have tried various ways to double my money in the past and taking stock deliveries is the classic method I started with - failed as it took long time and volatile market can eat you!

You want to double your money. don't want to wait. It is painted red all over. Larry Williams who make 100 times the starting capital in a yr (a feat that no one can hold a candle to) said a trader plays a waiting game. Impatience can eat you!

Then I tried Nifty Futures, failed - blame it on volatile market.

I feel nifty future is one of the easiest to trade but I guess that's subjective.

Finally came to Options and realized that it could be good tool. I have been working on the below strategy to join the millionaire club soon.

Here is the strategy I am working on...

1) find a liquid stock with high volumes , like suzlon or Unitech
2) make sure that the stock is less than Rs. 200 in Spot value and their near money call is less than Rs. 10

Your way of choosing stocks doesn't feel right. When it comes to options you get what you pay for.

2) find their support & resistance levels
3) buy near money put when the stock reach near resistance level, and switch to call when it reach near support level.

I don't understand what the difference in this whether you do it with options or cash or futures

Experts please comment on my strategy.. I am not hedging my positions and keeping a SL of 10% or gain of 50% from every Position I take... I will follow 10/50% rule strictly to close my positions.

SL of 10% i guess is in terms of the amount used for the trade which is a wrong way to put it. If 10% is for trading capital then you'll be doomed. 5% is the max no matter how good you are. I would suggest putting it at 1-2% of trading capital.

 

[findvikas]

Thanks LazyTrader, I know I have quite a lot of pitfalls and the strategy I am calling might not be good enough to even considered as strategy ... but thats why I am keeping my trading book public so that I can learn from MY mistakes and from others' advice.

I will revisit my strategy to tweak & tune it. Thanks!

 

[findvikas]

Today's Intraday Paper Trade

Buy Reliance 2160CA @ 35
Sell Reliance 2160CA @ 52

Return 48%

 

[findvikas]

Till 14/09/2009

It was a bad day and I had to make some adjustments to make sure I recover my losses of the day in coming days, most likely on Tuesday itself. I am still hoping to close the September month with above 2,00,000/- in my account for Options trading. Who knows ?

I sold my positions in SAIL with a BIG loss, add one more lot of Suzlon to average it out and added 2 more lots of Reliance to avg. it as well.

I bought a lot of AshokLey 40 CA which is expected to see good bounce in coming days, per me... at least 42

 

[DanPickUp]

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