Bluechip Options Trading

Long Term Investor

• Must Target only NSE top 10 stocks
• Check current price of the stock on current month end options expire day @3:15 PM
• Subtract 2.5% from current price of the stock to enter into PE sell contract for next
month end.
 If Reliance share price on 27th June 2019 @ 1000/-
 PE sell strike price would be 1000 – 2.5% = 975
• Wait for next month end last day of options expiry (Ex 25th July 2019) 3:15 PM and
squire off the PE sell
• If current price of the share is more than PE Sell price then it would be profit
• If current price of the share is less than PE Sell price then it would be loss
• If loss then buy shares on current market price, this price would be much cheaper than last month when
enter into PE sell contract.
• PE sell loss is less compare to current share price which brought.
• Example
Reliance share price on 27th June 2019 @ 1000/-
PE Sell strike price for next month end contract (25th July)
1000 – 2.5% = 975/-
Enter into PE Sell contract on 27th June 2019 at 3:15PM with 980/-
strike price.
On 25th July there would be two possibilities
Current share price is more than PE Sell strike price or less then PE Sell strike
price
If current price is 1050/- then PE Sell would be in profit, if profit repeat the
same steps for next month.
If current price is 950/- then PE Sell would be in loss then buy one lot shares
from cash market, which would be cheaper than 1000/- (PE sell loss would
not be more than 50/-).
Positional Trader
• If last month PE Sell loss, then i.e. Share price is less than 980/-
• Sell CE option at same strike price @980/- for next month end
contract.
• Last day of the expiry (i.e. 29th Aug 2019)
• If share price is less than 980/- then CE Sell would be profit
• If share price is above 980/- then book loss on CE Sell, sell shares in cash
market which would give profits (sold price of the shares – loss on CE Sell)

• Entire process complete, start entire process from next month.