Technical Analysis of Indian Equities by Nooresh

Reliance Inds – Option Strategy

Please read the whole post before taking a position. Also be ready with the risks involved.

 

Option Strategy

Short Strangle: Reliance September 960 call, 880 put

Recommended Strategy:

Sell Reliance Sept 960 call @ 14-15, also Sell Reliance Sept 880 put @ 14-15

Currently, September 960 Call and 880 Put options of NIFTY are

Hovering around Rs 15 and Rs 15 respectively, giving a total premium

inflow of Rs 30.

We recommend profit booking when total premium falls drastically to almost zero levels , with a stop

loss of Rs 45. The expected ROI (not annualized) from the strategy

is 10%, with an investment of Rs 75000 per lot (both sides

combined).

As per our derivative proprietary models, we expect Reliance to trade in

the zone of Rs 850 and Rs 990 during the September series.

Moreover, the profit zone for the above mentioned strategy is Rs

880 to Rs 960.

Pay off Matrix:

P/l = Profit or Loss

Expiry Price

Call P/l

Put P/l

Net P/l

P/l per lot

1020

(45)

15

(30)

-7500

990

(15)

15

0

0

960

15

15

30

7500

920

15

15

30

7500

850

15

(15)

0

0

820

15

(45)

(30)

-7500

Article by Nooresh Merani

Nooresh has written 2570 articles.

You can follow Nooresh Tech on Facebook and Twitter here.


{ 5 comments… add one }
  • Ratnesh Jain September 1, 2010, 23:33

    Nooresh,

    this is a good strategy, one can hold on to both positions till th expiry as well.

    Regards,

    Ratnesh Jain

    Reply
  • well wisher September 8, 2010, 20:27

    reliance is going up and up.
    what foolish strategies are you suggesting??
    how do you call yourself technical analyst??

    Reply
    • nooresh September 9, 2010, 02:16

      Hi Mr Well Wisher,

      Please take the efforts to read the strategy and the risks involved. It does not suggest on Reliance going up or going down. Btw its still in profit

      Reply
  • wellwisher September 21, 2010, 21:44

    why dont you let my comment come on the site??
    hypocrite..
    if we write good things you will post it..
    no probs…
    i am gonna create a facebook page “fake analyst nooresh”

    Reply
    • nooresh September 21, 2010, 23:11

      Hi Mr Wellwisher,

      If you would love to stick to your things of Reliance then have a re-look into the strategy it had a stoploss also.

      I dont need to prove myself

      Regards,

      Nooresh

      Reply

Leave a Comment