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Pran Katariya Profile picture
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3 Oct, 6 tweets, 1 min read
UBL is an interesting stock. The penalty of Rs 750cr has acted as a bit of a dampener on the Stock price and may continue to act as a drag in the near future. But given the near monopoly it holds in the Indian Market, the long term prospects are good.
The Stock is around 1575 and the Premiums are extremely good at around 140-160 for Straddles which I think more than adequately covers the expected range within which the price should move. I think it's a good bet at this price and this is how I plan to Trade it
Buy 1 lot and sell a 1560 Straddle for around 150. Don't mind booking profits at around 1750.Also sell a 1600 Straddle for the same price. Don't expect price to go upto 1750 and willing to add more around 1500. Hopefully price will stay in this range and result in some profits.
One lot means in Cash. Not in Futures.
Bought Stock at 1587 and sold a 1580 Straddle for 147. Also sold a 1600 Straddle for 145
Too early to say anything but off to a good start Image

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Pran Katariya Profile picture
4 Oct
Why am I buying Stock and selling Straddles against them instead of selling 2xPE? There are many reasons that I have tried to explain in some of my previous threads but what it boils down to is the difference in thinking of these two Trades
So while selling 2xPE is an opportunistic Trade for that month, my thinking with the Straddle is to invest my funds into building a portfolio of strong stocks and generate a monthly Return from them while they continue to appreciate.
I like to look at this as a long term Trade over many months where I will keep rolling the Straddle to future months for as long as the Stock remains strong. How do I gauge the suitability of the stock? In a word Relative Strength
Read 7 tweets
Pran Katariya Profile picture
2 Oct
Have invested in many companies which are a play on the growth in the real estate industry. Astral, APL Apollo, Polycab, KEI, Asian and Berger Paints etc. One area I seem to have missed out on is Home Finance.
Canfin Homes is looking like a good candidate at around 670. Strong stock with sound balance sheet to exploit growth opportunities. Even better it enjoys excellent premiums in Options. Plan to jump in with small qty and sell an ATM Straddle at around 85-90.
Bought Stock at 678 and sold a 680 Straddle for 90
Read 8 tweets
Pran Katariya Profile picture
6 Sep
Tried something new today. I feel IEX has run up too much and too fast. So did a CE Ratio (bought 1x620CE and sold 2x640CE) for a credit of 6312. No downside Risk and upper BE of 665. Hope to take off the 620CE at some stage which should result in a healthy Profit. Image
RoC of 4% if Price remains below 620-at which stage I will adjust and a POP of 90%.
Sold a 520PE for 9
Read 6 tweets
Pran Katariya Profile picture
2 Aug
Many use Cash Covered PE to try and buy stocks at prices below spot or generate income if those prices are not hit. So, if you like Tata Consumer at around 740- it currently at 760- you could sell the ATM 760PE for 22. If target price is not made you can get to keep the entire 22
Personally I prefer doing this with an OTM Straddle. So I will sell a 780 or 790 Straddle for 50. That way, I have the possibility of making much more if Price remains above 760. It opens out some upside Risk but a Straddle is easy to defend when Risk is on only one direction
Results are particularly good when this is done with a slightly bullish stock. I sold a 2000 Straddle in Deepak Nitrite for around 205 when spot was 1900 with a willingness to take delivery around 1800. Although the Stock is up 6%, the Straddle is in an MTM profit of 45per lot
Read 6 tweets
Pran Katariya Profile picture
21 Jul
The Straddle is my favorite trade these days. But more often than not, one needs to adjust to make a good return from it. There are many ways to do this depending on your view, psychology and imagination. Will discuss a few that I use
The Straddle is a delta neutral strategy and it is important to keep deltas in check during the course of the Trade and not let them run away from you. Of course Volatility is the elephant in the room- but not going there as that will require a separate discussion
The first and most common method is to go 'inverted.' That is to say to shift the untested side to generate additional Premium and increase the runway to Breakeven. So if you start with a Straddle at 700 and price goes to 740, you can move the PE up to say 720.
Read 16 tweets
Pran Katariya Profile picture
9 Jul
Part of msg I got as a DM
Everyday I collect data fr nse eod files and try to extract meaning information. Like oi built up, delivery change on dly, wkly and monthly basis
From this I can conclude stock is going to be range bound or trend move.
Basically he was asking how I decide whether a Stock will be range bound before selling a Straddle and telling me about the analysis he does before he reaches that conclusion. There was more that he does but let's stick to this.
My answer is that I do it on instinct. I basically watch about 20 or so underlying on a constant basis and when I feel that a Stock is not or has stopped trending and the IV's are ok, I sell a Straddle. No complicated analysis for me and I'll tell you why.
Read 10 tweets

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