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 |
Nooresh Merani - An IT engineer by qualification and Advisor/Trainer by profession.