Infosys is one of the India's largest IT company and it has tremendous craze among IT employees and students in the campuses across India. It also has craze among traders and I've not seen anyone going short in that counter.
Infosys – I always try my hand during the time of results
and not even once I got it perfectly right in my call. I might go on right path
with long but I always have an option (derivative instrument) attached to it
(meaning – I limit my profits by simply writing options).
Before going to the main picture I’ll tell you what happened
last time. I went long and ofcourse I wrote an option and I limit my profits to
Rs.100 (Rs.12500). I never anticipated huge short covering rally and that
exactly happened in Infy. LIC made blockbuster profits by selling Infy around
Rs.2900 levels which they bought atleast 30% below their selling rates.
During the result day I went long through futures and wrote
call options. By this strategy I made Rs.10k and in total I made Rs.25k. If I
didn’t fucked up with the hedge I could have made more than 50k and that is how
I work in the markets. I’m too much afraid to carry unhedged positions during
the times of big results like Infosys.
This time initially I went short around 2818 and wrote 2800
Put Option at 115. After couple of days I went long on May month futures at
2804 and wrote 2700 Call option at 190. After a day I wrote 3000 call option
around 35. Yesterday I wrote 2600 Put Option at 35.
By this time you know how I’ve been fucked up in my
position.
I was expecting neutral results from Infy and I thought it
would only by 5%-10% (on the worst case) move on either side. Today morning I
watched the results and I thought Infy could correct not more than 7%-10%. In
that anticipation I go to my office and I had a shocker awaiting me.
When I made calculations I was sitting in the loss of 30k. How to recover?
I sat down and made huge calculations and eventually I believe I got it right. What I do is the lesson that is important for me.
I myself couldn't believe I got right and eventually got it right and I was actually sitting in the profit of Rs. 8 k. I'll explain in part 2 of this post.
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