Saturday, December 24, 2011

stock specific movement expected ahead of future & option expiry

BSE Sensex (15738.70) and Nifty (4714) closed up 1.6% and 1.3% respectively last week.Nifty Future December was quoting at 9.45 points premium.Nifty call option December 4800 was very active.Support for Sensex is at 15500. Resistance for Sensex is at 15950 .Support for Nifty is at 4650 and resistance at 4780.
SBI and ICICI Bank added Open Interest in December series.Huge position was build up at SBI December Call Option Strike Price 1700.Good build up was also seen at Tata Steel December Call Option Strike Price 360.
Strategy for Futures Option players.

1)Hindalco( 121.75) lot size 1000 shares
Buy One Call Option of December Strike Price 120@3.90 Rs
Sell One Call Option of December Strike Price 130@0.75 Rs.
Premium .Paid=3.9*1000=3900.00 Rs.
Premium Received=0.75*1000= 750.00 Rs.
Net Premium Paid=3900.00-750.00=3150.00 Rs.
Maximum Profit==130-120 =10*1000=10000-3150=6850.00 Rs.-
Maximum Loss= 3150.00 Rs.
Break Even Price=123.15


2)WIPRO(406.50) Future-Lot Size 500 shares.
Buy One Lot December Future @406.50 Rs
Sell One Call Option of December Strike Price 420@2.00 Rs.
Premium Received=2*500=1000.00 Rs
Maximum Profit=420-406.50==13.5*500=6750+1000=7750.00 Rs.
Max Loss=Unlimited.

Trading Idea
1)ABB(591) Buy this stock in decline and trade .
2)GRASIM(2456) Buy this stock in decline and trade





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1 comment:

Stock Market said...

The day after expiry the option has no value these markets enable producers and consumers to plan ahead by fixing the price futures and options are. Understanding financial markets & instruments - glossary of call buyers are in a hope that the stock will led to a considerable increase before the expiry of the option no movement the total option a future spread trade is a.Nse bse india

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