These trades are equity and options intraday trades done by me in my research account and some are given by my clients. You can get started with as little as Rs.10,000/- but later you may need more to get such results. Just to help you get started in stock markets I can give you this strategy for free.

Learning this strategy is important but what is more important is to become a disciplined trader. Probably you will make approx 500 a day, but the rules given in the strategy have to be followed by you, and when you start following it, you will become a disciplined trader. It is very important to be a disciplined trader if you want to succeed in trading equities, options or futures. 99% of traders lose money because they cannot control greed and break the laws of trading. If you can learn to be a disciplined trader I can assure you that you will become a much better trader than what you are today. The strategy is just 10% for the reason of successful traders, discipline takes away 90% of the credit.

On top of that, by doing this course you will learn how to find the direction of a stock or index for intraday trading. That’s added benefit of this intraday course. So you must do this course.

You can get this strategy for free, for that you have to register your email for the 5 days free course on options. Just fill the form on top of this page to register your email.

Results may vary for users

Date: 07-Jan-20 – Results may vary for users

NSE on 07-Jan-20 EOD

Results may vary for users

Results may vary for users

Results may vary for users

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Results may vary for users

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Took another trade same strike that also resulted in profits 🙂 – Results may vary for users

Date: 19-Dec-19. Two trades taken both in profit – Results may vary for users

Date: 16-12-19 Bank Nifty Options Intraday Profit – Results may vary for users

Date: 10-Jan-20 BN Options Intraday

23-12-19: Results may vary for users

Date: 17-12-19 Results may vary for users

Date: 12-12-19 Results may vary for users

Date: 03-12-19 Margin Req: 49k, Profit 925 ROI = (925/49000)*100 = 1.88% Equity Intraday – Results may vary for users

Date: 11-12-19 Equity Intraday Profit – Results may vary for users

Date: 26-11-19 Margin Blocked 9600. Return On Investment (ROI) = (532.50/9600)*100 = 5.54% Intraday – Results may vary for users

Date: 25-Nov-19 Results may vary for users

Results may vary for users

Date: 25-11-19 Intraday profit in Nifty Options. Time taken 5 minutes. Margin blocked Rs.6750. Return on Investment (ROI) = 6.77%. Results may vary for users.

Date: 29-11-19 Return on Investment (ROI) = 1.02%. Results may vary for users

Intraday profit in Nifty Options. With practice you can trade 10 lots and make more than 3k a day while paying only 20+20 as brokerage – Results may vary for users

Results may vary for users

Results may vary for users

Results may vary for users

Results may vary for users

There are a lot of reasons why you should not take tips from your broker.

Recently I emailed my subscribers asking them the problems they faced while trading. At least 5 people said they were taking tips from their brokers.

When I asked them why the brokers – their reply was that since they know the stock markets better and that they have the ability to move markets.

Here is the the copy of email received:

Dear Sir,

The problems while trading faced by me are:

1) I am a beginner and my broker is not able to provide proper advice, hence losing money.

2) No knowledge of option and futures trading.

Please advise.

Thanks,
Kind Regards,
Homi

Now what happens is when a newbie opens a Demat account they are in touch with their brokers and the brokers have this habit of telling a lot of things about stock markets. This stock is hot that stock is a multimillionaire/multibagger etc. The newbie who is a novice stock trader starts dreaming making it big in a short time.

So after the account is opened the first person to look for tips is his broker.

Well, let me tell you that a broker is a broker – his job is to make sure your transaction goes through smoothly and he/she collects the margin, brokerage and taxes from you. His job is also to maintain your account, settle your account every quarter and makes sure your money is safe with him as they have to report to SEBI their balance sheet. Its not easy for them to take your money and run away.

Earlier rules were not very strict – so some brokers were risky to open account with. But today SEBI has ensured that all brokers maintain a safety measure to keep client’s account safe. In fact every quarter the brokers are obliged to return the money to their clients bank account which is not connected to a lien. A lien means any kind of obligation towards a trade. The free money has to be returned back to their client’s bank account.

So their job is to just maintain your trading account. Their job is not to study about stock markets or stocks. They give you advice so that you trade and they can make some brokerage money.

That is the reason you should not depend on anyone for stock markets tips advise. A course or study materials are ok but not tips.

Read this why I do not give tips and why you should also not take tips.

Today morning I got a call from someone who bought Reliance (RIL) Call option a few days back because one of the WhatsApp group he was gave a buy call on Reliance. He bought options worth 37k, and when he called me he was in loss of 20k.

I asked him a few questions which I think you should also ask yourself when you make a trade:

1. What is the logic behind this trade or Why are you taking this trade?

Ans – The answer here is because the WhatsApp admin whom he does not know gave a call to buy RIL. It’s like blind following. Is he Warren Budget that you believed him?

Answer to this question should have stopped him taking the trade.

There are many Telegram and WhatsApp channels nowadays giving free calls – please exit from such groups for your safety.

2. What profit target have you kept and what is your stop loss?

Ans – Again he was unable to answer. You take a trade and you do not know what profit or loss you will take, then better do not take a trade.

I asked him to exit the position with 20k loss. At least he saved 17k. I am sure had he not called me, he would have waited and all his 37k would have gone down the drain. I am sure you are doing the same.

20k gone in just one trade. Is it really that easy to make 20k in your job? With 20k you can easily buy 43″ 4k Smart TV.

When you lose money in trading – compare it to what you could have bought with it. This will give you an idea of what you lost.

It will be painful but you must punish yourself for losses, else you will keep making it.

My Ans – When you buy an option call or put, keep your profit target at 20% ROI on the margin blocked and 10% stop loss on the margin blocked.

Let me take an example:

Let’s take example of the person who called me.

His invested amount: 37,000
He should have kept his profit target at: 37,000 + 20% = 44400. This is a profit of 7400.
He should have kept his stop loss at: 37,000 – 10% = 33300. This is a loss of 3700.

If you look at the example above this trader is risking 3700 to make 7400. Does that make sense?
In the example above 37,000 is just the invested amount where risk is 3700.

Please remember that STOP LOSS is the best Adjustment to a trade. There is no better adjustment than taking a stop loss. If you will try to take a losing position to a winning one by adjusting like buying/selling more options – you will fall more into debt. Plain and simple adjustment – just get out and wait for a better opportunity.

Those who follow the above rule survive for long – those who do not perish!

3. And the best question – Maybe you will make a profit of 4-5k in this trade but will you then take a trade of 37k+5k = 42k in his next call?

Ans – No. Because after winning the first trade from an advisory service provider, if your inner sense says this was a fluke – you will not be able to take a bigger trade in the next call. Then why trade his calls?

In stock trading, if you cannot compound a strategy with more money at least up to 10 lakh then that strategy is not a good strategy.

So next time you take a trade – ask yourself the above questions before putting money on the line. This will save you from a lot of losing trades.

Hope that helps.

This is one reason I do not give calls. If you want to learn and trade do not ask for calls – you will never learn. Remember that 2 or 3 calls can be a fluke and hit the target, but not 10.

That’s the reason tip providers give only 2 days free calls knowing very well that out of 5 days, 2 days will be great and they can get clients on those days. They work in the logic of Coin flipping – some days they know their calls will work and they can get clients. And they do get. It was a pure fluke. After this the client account starts moving towards the zero figure.

Let me tell you clearly that whatever you may try – that 10% a month target will NEVER be achieved. it will be like +10, then -20 kind of a journey that you must understand.

But I am sure its quite late now and you have lost a lot. Hope no more.

Do my course if you are ok with average 30-36% return a year (that’s 3% a month – not very great but reasonable), and this year after year, and yes you can compound because you will learn to hedge. In case of a bad day the hedge will act fast to protect your wealth and limit your loss.

Conservative Options Course based on Nifty Options – This course will help you to make a monthly income for years up to 3% a month. Fees and how to pay is here. Chek it out, no other teacher can give such a long support for such low fees for such results – Testimonials.

Bank Nifty Weekly Options Strategies – Results slightly better than Nifty. Fees and how to pay is here.

Looking forward to helping you to become a good trader.

For beginners rule based trading is better for risk management. Experienced traders may change the rules depending on their experience and situation as per the market condition. But it’s better for all to stock to the rules.

In this post you will learn how you should trade options with rules. These rules will keep you safe.

1. Position Size Should be Small:

It has been told quite often and written many times in financial blogs that when you trade derivatives keep the position size small, but for some strange reason after a few profitable trades, traders start trading with 5-10 lots thinking they will make a lot of money in no time.

This is when they start losing it.

Post Date: 26-Sep-2019

One decision to lower corporate tax by Finance Minister Nirmala Sitharaman by a few percentage resulted in huge jump in stock markets.

The News: On Friday, September 20, 2019, Finance Minister Nirmala Sitharaman announced a reduction in the country’s effective corporate tax rate from around 35% to 25%. For companies that do not avail of any other incentive or commission, the effective tax rate would be just 22%.

This will save a lot of money of the companies doing business in India and of course will result in better profits, which in turn will result in business expansion and creation of jobs. Its a very good news for Indian economy.

Of course a news such as this results in a jump in stock markets. From Friday to Thursday, 26-Sep-19 NSE went up from 10700 levels to 11600. This is an increase of 8.5% approx.

Bank Nifty went from 26757 to 30400 levels. This is an increase of more than 13%.

See this one month graph of Bank Nifty:

Bank Nifty 25-Aug-19 to 25-Sep-19

In such a swing and volatile markets such profits are possible in 1 or 2 days in my Bank Nifty Course Strategy:

Sijo Testimonial – Results may vary for users

During these volatile times traders must be very careful. Especially if you are a future traders or an option seller you must maintain your stop loss levels.

There is no better adjustment than taking a STOP LOSS.

Traders keep asking me one question that what is the best adjustment strategy for a future or an option short trade gone wrong. They think that there is an adjustment strategy that can work wonders and bring a losing position to winning position after the adjustment is done.

Let me tell very clearly. The more you try to adjust a losing trade, the more you will go deep in losses.

After seeing an option shorting gone wrong, traders adjust the position by shorting another either the same option or a deep OTM option.

This is a very wrong way to adjust a trade.

The best adjustment in a losing trade is to get out of the trade.

There is nothing better than this.

So be careful when a major news has come out. This is the time to reduce your lot size, take a less risk and trade.

This site is educating traders and investors since 2014. You can read about me here.

I am sure you must have subscribed for my 5-Day Free course by signing up the form at the top of this page. If not please do so now. Thanks if you subscribed, please do read my 5 days course. It will tell you a lot about options and after signup you can download a PDF file explaining Option Greeks in simple language.

Here are a few important things about Stock Markets, Investments and Finances which you Must Read:

1. If you are looking for tips/advisory service or already taking one – I am sorry to say you will lose a lot of money. I have been there lost that. So advising you against taking tips from anyone including your broker. Its better to learn and trade yourself. There are many tips providing companies in Indore – stay away from them. I suggest install Truecaller App on your phone and never pick a phone call with color red. They are 100% accurate in identifying SPAM calls.

2. If you are planning to automate your trades be very cautious as there are many software out there to take your money every month but if they do one single mistake you may lose more than you made. Software do have bugs please remember that.

3. If you want to invest in a stock then keep a time frame of at least six months. Please note that investing is NOT trading. Keep them separate. If profit comes before 6 months you can exit, but do not take a stop loss before that time frame. But you may also keep a stop loss based on the money you are wiling to lose in an investment. So a stop loss in investment is different than stop loss in derivative trading. In investment it should be based on money and in trading it should be percentage of the margin blocked as you are taking a leverage.

4. If you found a strategy in a website or YouTube, paper trade first before trading with your hard earned money. Now days there are so many videos that you may have to spend a lifetime seeing each one and then researching them on paper. For this reason I have stopped seeing YouTube videos on stock trading. It’s hard to figure which is good and which one is uploaded by my neighbor (maybe) or an unknown person randomly on stock markets.

5. If not today, tomorrow you will understand that Technical Analysis is not worth the hype. Stocks are a non-living thing – they are not bound to move as per the charts order them. Warren Buffet by the way the biggest investor and profit maker from stock markets of our times does not know even A of Technical Analysis. So if you are trading based on Technical Analysis, please keep your stop loss in your system always. 50% of the times your stop loss will be hit.

6. If you are married please ensure that you share 100% of your investments with your spouse. Your spouse will make sure you are not blowing your account for greed or for whatever reason.

CCD founder VG Siddhartha did not inform his wife about the loans he started taking from his friends and other sources for reasons only known to him. Had he informed his wife about his plans she would have surly stopped him from doing anything wrong financially. Consequences of bad financial investments can be ugly. Siddhartha case is known to all.

So it’s very important to inform your wife of all the investments you have done in stocks markets and other places and also the profit and loss you are doing. Do this every month to ensure your finances are in place.

In most cases it’s the husband who does not inform his wife about the investments made. Wives on the other hand inform every investment they do to their husbands. As for as investments are concerned it’s your moral right and for safety of future of your family please do inform all your investments to your wife/husband.

7. At the end of every quarter write down in a dairy or in an excel sheet all the investments you have done in all the places including their current values and add them to know your financial condition. This way you will be able to control your greed in taking risky trades in derivative trading. Also your investments will be scattered across multiple sources which is good for your finances.

You can download an excel sheet here to keep a tab on your investments. I use the same excel sheet to manage my finances and keep them under control. Of course after every calculation I make sure to show the sheet to my wife to get any suggestion if any.

Since 4-Jul-19 both BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) are falling.

Two main reasons are:

1. Business sectors such as Automobiles (Maruti Suzuki, Tata Motors), Banking (PNB, Yes Bank), Non-Banking Financial Companies (NBFC) (Indiabulls Housing Finance Ltd), and even FMCG (Parle) are seeing a heavy slowdown in business. More than 1 lakh people have lost their jobs in these sectors in just the last two months and more will lose in the coming days.

2. FPIs and FIIs are selling, in fact, the rich investors in India also not happy.

Read this article to know what exactly is the problem.

Most important read from the article:

If FPIs earn an income of over Rs 2 crore entirely from listed equities, they will now need to pay 25 per cent surcharge on their capital gains, short or long. In the case of income of Rs 5 crore and above, the same will go up to 37 per cent.

In case of gains from unlisted securities and derivatives trade, STCG for the Rs 2-5 crore group will be 39 per cent, while it will be as high as 42.74 per cent for the Rs 5 crore-plus group.

Almost half of their profits will go away in taxes. Then why should they invest in India?

95% of FPIs and FIIs fall in the above category. Just imagine their anger.

Now coming to when things will get normal?

Well, business sectors written above can see growth only if government give them loans on low interest to expand the business. Which I do not see happening in the near future.

FPIs and FIIs are awaiting clearance on the exact nature of taxes they have to pay. In India, the tax system is very complex. You need an expert to understand the exact meaning of the new tax rules. So this may take time.

They want to rollback – but I do not think this government will do this. This government is known to keep increasing taxes.

It’s unfortunate but we have no control over what the government does.

So I suggest trade with strict stop loss and if you are an investor invest in a few good companies as most stocks are at a very attractive price. However, you may have to wait long to make a reasonable profit.

This is the reason I keep advocating non-directional strategies which are the most popular strategies in my Nifty and Bank Nifty courses.

There is no money in trying to trade direction. This path is full of losses only.

This post discusses how Nifty Options settlement is done.

First thing you must know is that in India Nifty options are cash-settled. These are European-style settlements. A cash-settled option is a type of option for which actual physical delivery of the underlying asset or security is not required. The settlement results in a cash payment + brokerage and taxes, instead of settling in stocks, bonds, commodities or any other asset. In India, options are allowed for trading before expiration (European style). You cannot exercise Options in India before the expiry date (you can only sell them off to other buyers), which means a trader can buy/sell an option and finish the trade before expiry any time they want. However, in American style, the option contract owner is required to hold until expiration.

Though stock options settlements in India is moving towards cash settlement before expiry, however, if held until expiry then physical delivery of the stock is required. Here is the news report that you can read:
https://www.livemint.com/Money/RfzIRyoFkf1lI6Ar7GpURO/Sebi-takes-aim-at-extremist-speculators-with-new-derivativ.html

Here is list of stocks in which physical delivery is required if options are taken to expiry:
https://www1.nseindia.com/content/circulars/FAOP40257.pdf

And here is SEBI circular which explains that by October 2019 expiry ALL stocks where options are traded will be moved towards physical delivery of stocks:
https://www.sebi.gov.in/legal/circulars/dec-2018/physical-settlement-of-stock-derivatives_41482.html

American style settlement where the owner of the option has the right to exercise the option.

Thought introduced in a phased manner in April 2019, it is still not popular in India as Indian option trader rolls over the position but does not want to take delivery of shares.

But what happens in India if you fail to close the option trade and take it to expiry?

If the option you sold or bought expires worthless then there is nothing to be done. But if you bought an option and it ends in the money you will have to take the delivery of shares.

Here is small explanation of the meaning of exercising of options (not cash settlement):

Basically exercising means the right to buy or sell the stock at a certain price as defined in the options contract.

If the holder of a put option exercises the contract, then he will sell the underlying security at a stated price within a specific timeframe.

If the holder of a call option exercises the contract, then she will buy the underlying security at a stated price within a specific timeframe.

Before exercising an option, it is important to consider what type of option you have and whether you can exercise it. You should know the terms and conditions of trading options before you are trading them. If there is a confusion you can ask your broker.

Due to the above reason its HIGHLY RECOMMENDED that do not trade stock options. If you want to trade options then trade either Nifty or Banknifty options as neither Nifty nor Banknifty shares are traded in the market, so the question of settlement does not arise – they can be settled in cash only.

Here is what happens when an option is exercised:

A Put Option is a contract that gives its holder (the buyer) the right to sell a set number of equity shares at a set price, called the strike price, before a certain expiration date. However in India a stock option is exercised only on the expiry day

If the option is exercised, the writer of the option contract is obligated to purchase the shares from the option holder. “Exercising the option” means the buyer is opting to take advantage of the right to sell the shares at the strike price.

The opposite of a put option is a call option, which gives the contract holder the right to purchase a set amount of shares at the strike price prior to its expiration.

There are a number of ways to close out, or complete, the option trade depending on the circumstances.

If the option expires in the money, the option will be exercised. If the option expires out of the money, nothing happens, and the money paid for the option is lost.

Conclusion:

In India Index Options are cash-settled, which means you can buy/sell Nifty/Banknifty options anytime and close the trade anytime before expiry. Net result will be cash-settled. If you make a profit, your account will be credited with the profit money minus the brokerages. If you make a loss, the broker will deduct the loss plus brokerage from the money blocked from the margin to trade and release the rest of the money back to your account.

Here is an example.

Assuming Trader A buys a Nifty call option strike 11500 at 55. And margin blocked was 75 (lot size) * 55 = 4125.

He sells it at 70. So 75 (lot size) * 70 = 5250.

Profit made: 5250-4125 = 1125.

Assuming brokerage + taxes was 50 in this full transaction.

So the broker will release 4125 (initial margin blocked) + 1125 (profit) – 50 (brokerage + tax) = 5200 back to Trader A’s account.

This is cash-settlement. You can see that no change of stocks took place in this transaction, only cash exchanged hands.

Now suppose Trader A had sold that option at 40 then what would have happened?

75*40 = 3000

Loss made:

3000-4125 = -1125.

So the broker will release 4125 (initial margin blocked) – 1125 (loss) – 50 (brokerage + tax) = 2950 back to Trader A’s account.

As you can see whether profit or loss the option trade was cash-settled – there was no exchange of stocks.

However when you do stock option trade in India, after October 2019 there is almost a certainty that 100% of stock options will be exercised if in the money and you may have to either buy the stock in cash equal to number of lots traded or have to produce that many stocks from your account.

So if you trade stock options make sure to close the trade before expiry and NEVER let the stock option get in the money and be exercised.

Hope the above articles helped.

This is a very common question befalling option buyers since ages. After paying the huge premium and the stock moving in the direction of the option bought if the option buyer sees a loss in options bought they get stressed and start thinking what wrong they did.

This is especially worrisome for novice options traders who just came into the options business. They get worried about seeing a huge decline in option premium if the stock stays in the same place or move slowly in the direction of the option bought. So they ask themselves or their mentors/brokers or keep searching online – why my option declined in price when the stock moved in my option buy direction?

Well, they did nothing wrong except they paid for time value and other things that I will discuss here.

Here is an explanation:

Assuming the stock is at 100 and at the money call option at 100 is bought for 5, then the option buyer will make money only if the stock crosses 105 before expiry. Even if the stock finishes at 104 the option buyer of strike 100 will lose money because he bought the option at strike 100 and paid 5 as premium. So the break-even point is 100+5 = 105. Anything above 105 is profit for the option buyer.

Now coming to the real world live trading. When you buy an option you are racing against time. In Option Greeks its known as Theta. Decay of theta is a big concern for option buyers.

Assuming your view is positive for a stock and your buy an ATM call option paying a hefty premium. The premium you paid for is your maximum risk. Everything is fine and the stock moves up slowly. You will be happy that the stock is going in your direction.

You login to your account happily and to your shock to see your option contracts losing value, means its premium is lower than what you paid for.

This can be frustrating.

Three reasons for this:

One, the stock did not move far enough for you to make a profit yet.
Two, change in implied volatility. If it has gone from a high level of volatility to a lower level the option will lose value.
Three, too much time taken for the move to come.

Please note that option contracts are multidimensional. This is not a simple trade as stock buying and holding. When you buy an option, you buy a lot of stocks by paying a small premium but you also pay for a few things that are not in your control. These are option Greeks. If you do not understand option geeks you can download an Option Greek file from here.

So remember in an option contract, you have this multidimensional issue. You have to not only predict the directional move of where the stock is going, but also how implied volatility and how time decay may impact the position in future. So sometimes even if you get the direction right you may lose money in buying option.

So whats the way out?

Way out is to keep a target to exit. Target should be both for taking loss as well as taking the profits. If you take out the profit and then option moves to make a very high premium you should not repent your decision to exit early. You traded with a plan and you exited.

Trading without a plan is sure-shot way to losing millions in stock markets. You can do my conservative option course and learn ways to set up trades for monthly income.