Trader Ghanshyam made a profit of Rs. 1.06 Cr by trading Bank Nifty options on expiry day

Noted trader Ghanshyam made a profit of Rs. 1.06 Cr by trading options of the Bank Nifty on expiry day. He has explained precisely how he planned and executed the trade. He has also given valuable pointers on the mindset that traders should develop. He has also explained how risk should be managed

The stock market is known to swing from one extreme to the other. A few days ago, the situation had become so desperate that noted traders like P. R. Sundar and Bandi Shreyas announced suspension of trading.

"I'm going to take a break for a while, need to reset from all the stress and frustration," it was stated. Several other traders also reported big losses in their trading (see Extreme volaility in market causes traders to suffer heavy losses. Some decide to suspend trading).

However, happy days have now returned to Dalal Street. Traders are again reporting mammoth MTM gains.

Trader Ghanshyam led from the front with an earning of 1,62,29,417.50 on the expiry day of 7th July 2022.



He emphasized at the outset that these gains are the result of his hard-work and experience over the past several years are not an overnight phenomenon. Newbie traders should not attempt to replicate these traders as they may risk their capital.

He also pointed out that it is a fallacy to believe that gains are made by a strategy or a setup. Instead, gains are made by the mindset and psychology of the trader as well as his ability to manage risk and money.

"पैसा रणनीति से नहीं बनता है। यह मानसिकता और मनोविज्ञान द्वारा बनाया गया है," he said.

He also advised new traders to focus on learning and predicting what the market would do instead of being obsessed with making money.

"आपको न केवल अपनी रणनीति के बारे में पता होना चाहिए, बल्कि आपको इस बात का भी ध्यान रखना चाहिए कि दूसरा व्यक्ति क्या सोच रहा है। यदि आपको इस बात का अंदाजा नहीं है कि बाजार में क्या करने की संभावना है, तो आप जीत नहीं सकते, ("You have not only to be aware of your strategy but you must also be mindful of what the other person is thinking. If you have no idea of what the market is likely to do, you cannot win"), he emphasized.

"Keep things simple". Ghanshyam elaborated that many traders are in a confused state of mind because they following multiple indicators, which give conflicting signs.

"चीजों को यथासंभव सरल रखें। आपका व्यापार लाभदायक रहेगा। आप इसे जितना जटिल बनाएँगे, यह उतना ही कठिन होगा," he said.

As regards the planning and execution of the trade, Ghanshyam explained that he had foreseen that if the Bank Nifty bridges the gap and closes above 34120, it would move up to a level of 34,450 and 34,880.

When the Index moved as anticipated, Ghanshyam bought his quota in installments. He bought one tranche of 12000 number of 34200CE at one level and the other tranche of 12000 of 34300CE when the up-move was confirmed. If there would have been a dip, he would have added more. He also added more as and when the market looked ready for an up-move. The stop loss was placed a little below the support level.

The total quantity of Bank Nifty options bought was about 44000 and the capital deployed in the trades was about Rs 2 crore.

Thereafter, as the market moved up, he began to judiciously book profits because he was aware that the markets are volatile and can reverse swiftly. Also, on expiry day, there is also a grave danger of the options premium eroding substantially. So, one must book profits without hesitation, he said.

Ghanshyam also fairly disclosed that he had also bought some Put options, which resulted in a loss. The net profit at the EOD was Rs. 1.62 crore.

He emphasized that any trader who can learn to read the charts and who approaches the market with a sensible mindset and risk management can emerge a winner.

6 Points That Will Make You a Successful Bank Nifty Option Buyer !! “बढ़ता वही है जो बदलता है।”

Trader Ghanshyam has also painstakingly distilled his learning on how to trade the Bank Nifty into six easy-to-understand points.