I come accross many traders who have their Portfolio in losses & capital is stuck.
How to convert your Negative
Portfolio into a positive one?
(Only applicable to Stocks listed in F&0)
Let understand this concept in details
A thread _
1/8
How to convert your Negative
Portfolio into a positive one?
(Only applicable to Stocks listed in F&0)
Let understand this concept in details
A thread _
1/8
Assume you have shares of Reliance at 2800 as your buy
Price.
Now Reliance is trading at 2600.
So, net loss on 250 qty is 50000.
Right?
You are worried and are also losing bank interest (if that money was in FD)
Means, your net investment in stock is:
2800 Γ 250= 7 lacs
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Price.
Now Reliance is trading at 2600.
So, net loss on 250 qty is 50000.
Right?
You are worried and are also losing bank interest (if that money was in FD)
Means, your net investment in stock is:
2800 Γ 250= 7 lacs
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Your current value of investment is at 2600 Γ 250 = 6.5 lacs.
Net losses of 50k.
Now, the best way to recover these losses are:-
Selling an OTM CE(call option) of Reliance (STRIKE 2800) of next month.( Say, Dec 2022)
Say, we sold it at 20 Rs.
Qty is:- 250
Margin: 1 lac
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Net losses of 50k.
Now, the best way to recover these losses are:-
Selling an OTM CE(call option) of Reliance (STRIKE 2800) of next month.( Say, Dec 2022)
Say, we sold it at 20 Rs.
Qty is:- 250
Margin: 1 lac
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If the stock doesn't come to 2800 by Dec expiry, the sold CE would expire worthless & you will get 5000 profit.
This 5k is 10% of the current losses that your stock is showing in your holdings.
Means,10% of losses are covered in one month & you get a psychological relief.
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This 5k is 10% of the current losses that your stock is showing in your holdings.
Means,10% of losses are covered in one month & you get a psychological relief.
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In Jan 2023, we again sell an OTM CE of strike 2800 of the same stock.
Say, we sold it at 20 & it expires
OTM &
we gain 5000 profit again which is 11.1% of our net losses of 50k in holdings.
So, in two months, we have recovered 10k losses which is 20% of net loss in holding.
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Say, we sold it at 20 & it expires
OTM &
we gain 5000 profit again which is 11.1% of our net losses of 50k in holdings.
So, in two months, we have recovered 10k losses which is 20% of net loss in holding.
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If we keep repeating this process for 9-10 months, our net profit through this strategy would surpass the net losses of our holding.
Means, in 10 months, we will earn 50k through this strategy and would recover all our losses & Now.
Our holding becomes Loss-Free.
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Means, in 10 months, we will earn 50k through this strategy and would recover all our losses & Now.
Our holding becomes Loss-Free.
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U should be well versed with breakeven of your Sold CE
(2820).
Donβt panic if sold CE is on the way to becoming ITM.
Remember, if your sold CE is becoming ITM, by then your Holding wouldβve come in Profit.
Either 5k or 50k thru holding will come
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(2820).
Donβt panic if sold CE is on the way to becoming ITM.
Remember, if your sold CE is becoming ITM, by then your Holding wouldβve come in Profit.
Either 5k or 50k thru holding will come
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This is a strategy which has immense power to generate monthly income, through your holdings.
This income would be far more than the Interest given by any bank FD.
DM,if you have any queries.
Hope this thread added some value.
Pls retweet,if you liked it.
Thanks for ur time!
This income would be far more than the Interest given by any bank FD.
DM,if you have any queries.
Hope this thread added some value.
Pls retweet,if you liked it.
Thanks for ur time!
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