Banknifty options-Doubts & questions

#11
Sorry to note your loss.
113 commission is <3 pts in banknifty lot of 40. While it is high, it is not what has caused the loss. With just a day for expiry, banknifty has to go up by another 100 pts to avoid a loss. So about 0.5% up to breakeven, else being in loss- not a good trade, unless something is going to push up prices the next day.
One way of looking at it is, the option premium paid itself is the risk with zero stop, and the position size must have been considered to the risk level.
 

mohan.sic

Well-Known Member
#12
Hi friends

I like to ask question .
Let the experts reply and discuss .
Let the new traders benefit from the discussion.

A trader tarted recently with banknifty options trading.

What he did?
=================
he got a tip from adviser.
Buy 23000call at 45 or below wait for target 101


he bought banknifty 23000ce call option at 45 on date 17 may 2017
he was given a lucrative sure target of 101

what happened?
=====================
on the day of purchase 23000call hit 54 level of price.
next day during the opening,23000ce dropped to 4 rupees
it never went up.
the trader kept waiting and lost all the money.

He bought 25 lots at 45 cost 45000
his broker icicidirect charged him a high brokerage of over (ABOUT 113 rupees PER LOT)

RESULT
ALL THE MONEY LOST
PROBLEM
he never knew stoploss.

question
how could the trader avoid the big loss?
could he exit on 17 th itself instead of holding for 18?
are greeks etc any help?
any other vital clues of melting time decay?

thanks for any replies n solutions

Brokerage paid is very high. But that is not the reason for the loss.
Except the brokerage, the loss would be same weather it is icici or other discount broker.

That's a gutsy or a gamble trade done. Such trades can make the premium double/triple or zero.
 

Similar threads