INFY - HOW I FUCKED UP THE POSITION AND EVENTUALLY MADE IT IN MY FAVOR - II

My Trades as of Thursday 11.04.2013

Infy - 2804 May Long

Infy - 2184 April Short

Infy - 2700 Call Option Sold at 190

Infy - 3000 Call Option Sold at 35


Infy - 2800 Put Option Sold at 115

Infy - 2600 Put Option Sold at 35


My loss on Friday 12.04.2013

I cleared my Infy May long  position 2434

I covered my 2700 call option at 5

I covered my 3000 call option at 1.50

I covered my 2800 put option at 358.50

I covered my 2600 put option at 172


Let us calculate the profit and loss ( Loss indeed)


2700 Call Option 190 - 5 = 185 Profit

3000 Call Option 35-1.50 = 32 Rounding up Profit

Total Profit = 185+32 = 217

2804 - 2434 = 370 Loss on Futures

2800 Put Option 358.50-115 = 244 Rounding Up Loss

2600 Put Option 172- 35 = 137 Loss

Total Loss = 370+244+137 = 751

Total Net Loss = 751 - 217 is equal to 534 is the net loss

I kept my short in Futures. I shorted April Infy Futures at 2815 and now Infy is trading at 2300. This is 515 Points.

I sold 2400 Call Options(3 Lots) and got 200 Points ( Price rates) assuming that I would be keeping it till expiry. I might cover it around 3 bucks, but I would be writing further calls for 30 bucks and 20 bucks to compensate loss of 3 bucks. I always approach Infy in cautious manner and would write calls only above 100 points to safeguard against any knee jerk reaction. On top of that my loss on put option could go down if Infy goes up during the day.

I sold 2450 Put Options at 65 and in Total I've got 265 Points.

While doing all these, Infosys was trading around 2450 and May month futures was at substantial discount (Eventually got adjusted during the close)

How I calculate 

2815 - 534 = 2281 has been taken as my shorting price.

2815 is the price which I originally shorted Infy.

I reduced 534 loss and made my price as 2281.

In 2281, add 200 Points and it would come to 2481. I sold 2450 Put option at 65 which means my price of short has gone to 2515.

Now Infy is trading at 2300 and in my future position I'm in profit of 215 Points

In my 2450 Option there has been a loss of 150 Points. In total I've got 65 Points which would give me a profit of Rs.8000. 

While making the decision I was in the loss of more than 20K, but eventually sat and made the decision. I believe I hold my nerves and made my calculation and eventually got it right. Its a bit of luck and calmness that made me to turn around my position in my favour. The game is still not over. Let's see how Infy reacts till expiry.

I guess at this point of time I have got the grip over my position and hopefully would continue till expiry. I learnt hell lot of lessons in this trade and I'll line it up.

Lessons learned in Trade.


1 . Never write options during the event that would have parabolic outcome. Candidly speaking I never expected 20% drop in Infy and that's why it has happened.

2. Its always better to trade after results. One could always have visibility and more probability to trade the stock after results.

3. Don't panic while you are in loss. Be Calm and see how you could reduce it than simply losing patience.

4. Have self belief. Nothing is end of the world. But make sure that you have total risk management in place while making a trade.

5. Please be careful of people who say its easy to make money trading on results. Its always expect the unexpected.