Banknifty options-Doubts & questions

rvlv

Active Member
#1
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
 

MewarLion

Active Member
#2
This friend of yours lost more due to high brokerage and service tax on brokerage than the premium paid :
He must go the Flat Fee Stock Broker instead of traditional broker .

He may look for the following three qualities in Flat Fee Broker :
1 Stock Broker offer unlimited monthly Trading Plan in fixed monthly brokerage

2. Stock Broker is not doing Proprietary Trading ( Single biggest reason for Stock Broker doing defaults )

3. Stock Broker is not charging PCM Fee or Clearing fee to the client either clubbed in the Contract Note and or separately. Be careful on this aspect . Make sure that stock broker is not adding any clearing fee in transaction charges. Not only you may end up paying clearing fee but 15 percent service tax also on such fee. This is very important to keep cost low.
 
#3
2 foolishness, according to me

1. Paying steep brokerage of 113 per lot
2. Jumping on tips, without knowing what he was doing, without knowing the market movement

There are other mistakes also, but wont go into those, right now.
 
#4
You cannot avoid loss in trading,but you can control loss using proper money management derived by risk reward ratio of your trading system or take position which you wont fear to loose, trading is related to gambling if anyone trade without trading system and money management
 

MewarLion

Active Member
#6

checkmate7

Well-Known Member
#8
HELLO

Anandrathi gives fasttrade which you pay 13740 per year.
flatter brokerage for all segments .
First and foremost go for discount broker otherwise you will earn for them :rofl:

I have done this had reliance as my broker and made them happy for one month....

DONT TRADE BEFORE YOU DONT CHANGE BROKER....

And one more thing never follow tips analyze yourself first and then set your own target every day....

I personally never do positional in options only intraday and always go for cheap option with high OI according to market trend ....

Very good TA threads in Traderji study them...

Hope you benifits from here...This is the best place to learn :thumb:
 
#9
A few things that could have been done..

Since banknifty is a weekly expiry option, hence huge TV crash happens ....so: a possible loose hedges for overnight could have been

1. He could have sold 23100 CE of same expiry
2. He could have sold 23000 CE of next week expiry

Noone knows how the index gonna move...we should at least we aware what's the loss would be in any possible scenario the next day or expiry.

Sent from my Redmi Note 3 using Tapatalk
 

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