ShortOnly

What I'll be doing is writing Nifty calls instead of a pure future position.

I'm also getting rid of Bharti, Cairn and ZeeL - they haven't done much. Pantaloon Retail, HDFC and ICICI have done excellently, so they'll stay and have quantities increased a bit.

Reliance - again, writing call options zone for now. Will replace Unitech with another real estate company, details tomorrow.

Additions: Educomp, Tata Motors and a few real estate stocks are candidates. Will post more tomorrow.

ICICI Bank: I've halved the quantity, as there are results tomorrow. Tuesday will tell if it needs to be increased.

Nifty: I've shot down the quantity to 400. The index may not do much, and there's ample time to add more.

All others remain the same in quantity, and I reiterate the shorts in there.

I've added three stocks. ZEE Electronics, after seeing weakness, and this post by Sunil Saranjame.

Pantaloon Retail, after weak results and a P/E of 20 even now - with weakness showing in the discount the stock retains. Plus, it's big retail - not a great time.

Reliance, after fairly bad results.

See the full status and transactions here. Returns are now at 17% since August 08, not too bad, but nothing to brag about.

Disclosure: No current personal positions (hey, I'm moving!). I may add them when I feel the need to.

Note: This is my strategy, not my recommendation. Do not follow this. It is not advice. If you follow this even by mistake, I'm not responsible for any losses. This is education only. For me.

Have a good one!

Now, it's time for results and a lot of positions will emerge after results and weakness thereafter. The positions in Bharti and Nifty remain.

At this point, we're still doing a 10% return, over four months. Not exciting but I need to really understand weakness - it will be in individual stocks, not the index.

We are still at 11.87% on the SoS, for about four months. The next year should be good for shorts. Am eagerly awaiting results season.

Happy New Year everyone. Shall make a fresh post tomorrow. Meanwhile, stay safe.

I'm also "virtually" rolling over this month to Jan. This is an early rollover, and in the process I will add a few fundas.

First, I keep the Nifty position the same - a short strategy must have some kind of short on the Index. Implied volatilities on options are attractively low but the time to expiry is still too high (for Jan), so I might do puts in early Jan.

I'm stopping out of DLF. My mental stop was 320, but I should have maintained a trailing stop - after all, the stock was at 190! If I'd done a 20% trailing loss, like I did with HDIL, it would have saved some grief. As a penance of sorts, I'm getting out of DLF, though I continue to be bearish on the real estate sector. I'll take this short again later when the stock shows weakness.

I'm cutting position sizes on HDFC and Bharti. HDFC hasn't gone up or down, but a trailing stop would have helped - at this point it's got to be around 10% - or 1700. For Bharti, since I got in around 650, I'd keep the SL at 740; very close, but I have only one contract on.

I'm adding Satyam. It's a small position, just one contract. I'm bearish on IT for the short term, and Satyam is by far the weakest in the pack - it is likely to get impacted by any sort of negative US/Europe news, any issues with customers it will face due to the Maytas fiasco, any regulatory action. Positives for it are a buyback news, and any takeover attempt - have to cut losses quickly on this: Stop loss, 190.

Here it is then. It's done about 10% since inception, nothing dramatic, and unleveraged. The drawdown from the peak (which was +22%) is now nearly 12% - not good, and I must improve on it.

Disclosure: Don't take this as advice, please. The strategy is not something I expect anyone else to follow. It is only virtual and I have no positions on the above, other than some system-based positions on the Nifty which are both long and short. I am not responsible for any losses if you do follow this - and you shouldn't be, please do your own research. (There is enormous risk in shorting)

It was up 20% very recently so this is about 8% drawdown. (Drawdowns are peak to lowest point after that).

Not worried, I still think these stocks have some serious issues. The markets may go up to 3200 meanwhile; and the next wave of selling is likely to hurt even more so a short strategy should do good.

I'm looking closely now at the diversified players, IT and anyone that still has a reasonably high P/E. I have wanted to short Naukri for a while but there is no liquidity in the future; no point doing something that can't be replicated in real life.

Disclosure: No personal positions as of now. But I might take some in my next position, coming up really soon.