Option Strategy-Feb17(Post RBI Policy)

Hello Friends

After the RBI decision of rates unchanged, its time to take fresh view on markets & create option opportunity.

View: Nifty is overstretched and now chances of profit booking may arise at any point of time in the current series. To utilize and hedge the long portfolio once can go with following trade with downside bias:

Action: Buy 8700 Put@40 ; Sell 8900 Call@40

Net Premium paid: Zero

Upper Break Even Point: 8940
Lower Break Even Point: 8700

Risk: above 8940 is unlimited theoretically( traders can keep Stop Loss of 9030 levels around 70 points)

Reward: Unlimited( traders can expect 100/150/200 points can gain)

BUdget Strategy Update

                           
Hello Friends

I had given  budget option strategy  on 31st Jan.

In the strategy we had created Short Strangle( Sell 8300 Put@50 & Sell 8900 Call@35) with total premium inflow of 85 points is now trading at @45 hence generating profit of 40 points in just 2 days.

Aggressive traders can book partial profits, rest can carry the trade for Expiry.

IDEA Option Trade-Feb Expiry

Hello Freinds..!!

After the much awaited Budget Event, now lets focus on stock specific opportunities.

Idea in the past 10 trading sessions has rallied more then 70% to the 115 zone. Participants who are Bullish for the stock & would like to buy if it comes again to a attractive lower level can have one Option Strategy. Traders who are least risk tackers can go with following Trade:

View: Stock looks to be ib Bulls grip, chances of correction from 110 to 80 zone(27%) in the current series is least probable. On extreme side if it comes to 80 level then it becomes good opportunity to BUY the stock. at that point of time 80 Put Option Sell trade will create losses but at the same time you are buying stock at very attractive buying levels.

Action: Sell 80 Put@0.35; Lot Size: 7000; Premium Inflow: 2450/- per lot

Risk: Below 79.65 levels only.
Reward: 0.35 if settles above 80 zone in Feb Expiry.
Holding Period: 21 days
Investment: 2Lacs (assuming 25% margin blocked)
Expected Profit: 2450
Absolute Return: 1.22%( for 21 days)

Aggressive traders can go with further option sell in the premium range of 0.35-0.7, due to any fall in stock prices.