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SoS Update: 6% up, closed Unitech/JP, shorted Nifty calls

Today was expiry so some updates:

  • Closed Unitech position at 130.3. This results in a virtual net profit (from the first trade) of about 1.2 lakh after brokerage, rollover costs etc. I am not rolling this over – this has been a ridiculously successful trade and I think Unitech may have positive news flow in the short term. Also, there may be better avenues to deploy short capital.
  • Close JP Associates position at 123.5. From opening at 157.2 this trade resulted in a virtual profit of about Rs. 1 lakh. Again, I’m not rolling this over right away; I think it’s done a very fast move, and I might reinitiate after the US bailout plan is revealed.
  • I’ve rolled over half the ICICI short, but closed the rest, as again, I don’t know about the US bailout situation – we might come into a better position to short later.
  • Closed Nifty future trade at a profit of about Rs. 32,000.
  • Shorted 600 Nifty 4100 call options at 209 each. My deal is that I need some capital to be employed; but I don’t want to risk it in a future – a short call gives some level of cover (remember, no leverage).

Here’s the status:


SoS Update: 6% up, closed Unitech/JP, shorted Nifty calls

About 6% profit in about 1.5 months, with less than 60% capital employed at any given time (gives one a cushion). This is all virtual – if it was real I wouldn’t be talking about it. Not bad for a month but I must see how this does in an uptrend, shouldn’t lose all the profits! So too early to call.

Disclosure: No positions. Standard fundas apply – this is not advice, it’s education, and it’s not meant to have anyone trade it with real money. Please don’t do this because I’m saying something.

  • Shailendra says:

    >Hi Deepak,
    I just wanted to know your opinion on rolling shorts using NIFTY Options.
    Say we short Nifty by selling OCT 4100 CE and the market moves in another direction , and one week before the Expiry ,we think that we need to cover our losses and we are still convinced that sooner or later market will tank big time , I just had a thought if we could sell 4100 call for the next month i.e. NOV 4100 CE and use this premium to cover our Position for this month and still can hold our Shorts? Am i missing something here?

    Regards,
    Shailendra

  • Deepak Shenoy says:

    >Shailendra – what then happens if hte market moves up rapidly? You will end up having to pony up a lot more margin.

    I would not recommend such things – assume you get a 20% move against you on a single day, you should still be able to survive.