Trade safe calls with an excellent risk reward ratio by Narendra.Nainani.
NIFTY REALTY INDEX DOWN BY 14% OVER PAST ONE MONTH
BSE Sensex (54835.58) and Nifty (16411.25) closed respectively last week. ITC and IOC added Interest in MAY series. A Huge position was building up at TATACOMM call Option Strike Price 1040. A Good build up was also seen at BRITANNIA call Option Strike Price 3360.
CHANGE IN OPEN TNTEREST % CHANGE
CHOLAFIN 4,897 52.49
CANBK 5,121 21.85
TRADING STRATEGIES F&O
(1) GSPL (258.50) Lot size 1700 shares
Buy one lot MAY future@258.50
Sell one lot MAY call option 260@9.60
Premium Received = 9.6*1700 = 16320.00
Maximum profit = 260.00 - 258.50 = 1.50*1700 = 2550.00 + 16320.00 = 18870.00
Maximum loss = Unlimited
(2) ITC (266.65) Lot size 3200 shares
Buy one lot MAY call option 265@5.35
Sell one lot MAY call option 270@4.05
Premium Paid = 5.35*3200 = 17120.00
Premium Received = 4.05*3200 = 12960.00
Net premium paid = 17120.00 - 12960.00 = 4160.00
Maximum Profit = 270.00 - 265.0 = 5*3200 = 16000.00 - 4160.00 = 11840.00
Maximum Loss = 4160.00
Break even = 266.30
TRADING IDEA
(1) ABBOT INDIA (16984.30) Buy this stock in decline and trade.
(2) TATACOMM (1037.75) Buy this stock in decline and trade.
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