Trading for Living -- Successfully Completed one year as Full Time Trader

[sreperu]

I think these are treated as equity funds.

As per clerartax:

These funds are treated as equity funds for the purpose of taxation. If you stay invested in them for a period of up to 1 year, you make short-term capital gains (STCG) which are taxable. STCG are taxed at the rate of 15%. If you stay invested in them for a period of more than 1 year, the gains will be treated as long-term capital gains (LTCG). LTCG in excess of Rs.1lac is taxed at the rate of 10% without the benefit of indexation.


Regarding exposure I am not sure. If anybody is using them, please confirm.

So If i consider this investment for more than a year then tax will be applied for the profit part means 10% on that profit, is it correct Amrutham?

 

[amrutham]

So If i consider this investment for more than a year then tax will be applied for the profit part means 10% on that profit, is it correct Amrutham?

10% on long term profit which is more than one lakh.
If your total long term profit in FY is less than one lakh, then no tax.

Let's say your long term profit in FY is 120000, then you have to pay tax of 2000.

 

[amrutham]

Entered into below BN butterfly for 09th Aug expiry.

BN spot @ 27830

Buy BN 27800 CE 600 Qty @ 158
Sell BN 27900 CE 1200 Qty @ 104
Buy BN 28000 CE 600 Qty @ 63

Net debit = 158+63 -208 = 13*600 = 7.8K

Made adjustment to this position.

BN spot @ 28030

Sell BN 28000 PE 80 Qty @ 82

Credit = 6.5K

Net Debit for the position = 1.3K

 

[amrutham]

Entered into below BN position for 09th Aug expiry.

BN spot @ 27960

Buy BN 28000 PE 200 Qty @ 150
Sell BN 27900 PE 200 Qty @ 104
Sell BN 27500 PE 200 Qty @ 26

Net debit = 5K

Closed this position.

BN spot @ 28030

BN 28000 PE 200 Qty @ 82
BN 27900 PE 200 Qty @ 45

Net credit = 7.5K

 

[Probability]

Closed this position.

BN spot @ 28030

BN 28000 PE 200 Qty @ 82
BN 27900 PE 200 Qty @ 45

Net credit = 7.5K

How net credit 7.5 K ?

 

[amrutham]

How net credit 7.5 K ?
View attachment 27264

Probability,

7.5K is the net credit received today against initial debit of 5K.

I have not mentioned P/L for this position, since 27500 PE leg is still open and most probably will expire worhtless.

In that case, net profit on the whole position will be around 2.5K

 

[Probability]

Probability,

7.5K is the net credit received today against initial debit of 5K.

I have not mentioned P/L for this position, since 27500 PE leg is still open and most probably will expire worhtless.

In that case, net profit on the whole position will be around 2.5K

Thanks for clarification

 

[kingsmasher1]

Made adjustment to this position.

BN spot @ 28030

Sell BN 28000 PE 80 Qty @ 82

Credit = 6.5K

Net Debit for the position = 1.3K

@amrutham
This is my first post to your blog, and i will start by saying this is the best and the most inspiring thread amongst all i have encountered till date in traderji. Keep up the great work.

One question - You adjusted the present butterfly by Selling BN 28000 PE expecting it will expire above 28000. But this is not hedged in the downside which means risk in downside is infinite. Why not use a second butterfly OR use some kind of adjustment spreads like in this link? http://www.optionstradingiq.com/butterfly-course-part-12-adjustments/

 

[amrutham]

Below is the expiry day trade taken.

BN Spot @28180

Buy BN 28100CE 600 Qty @ 91
Sell BN 28200CE 1200 Qty @41
Buy BN 28300 CE 600 Qty @14

Net debit = 91 + 14 - 82 = 23*600 = around 14K

 

[amrutham]

Below is the expiry day trade taken.

BN Spot @28180

Buy BN 28100CE 600 Qty @ 91
Sell BN 28200CE 1200 Qty @41
Buy BN 28300 CE 600 Qty @14

Net debit = 91 + 14 - 82 = 23*600 = around 14K

Now closed this position.

BN Spot @28290

BN 28100CE 600 Qty @ 165
BN 28200CE 1200 Qty @81
BN 28300 CE 600 Qty @27

Net credit = 165+27 - 162 = 30*600 =18K

Net Profit = 4K