Wednesday, 7 December 2011


OPTION CALL PUT STRATEGY


SBIN is extremely volatile these days. We expect this volatility to continue. To encash this volatility we suggest u strangle strategy in SBIN.



The long strangle, also known as buy strangle or simply "strangle", is a neutral strategy in options trading that involve the simultaneous buying of a slightly out-of-the-money put and a slightly out-of-the-money call of the same underlying stock and expiration date.



The long options strangle is an unlimited profit, limited risk strategy that is taken when the options trader thinks that the underlying stock will experience significant volatility in the near term. Long strangles are debit spreads as a net debit is taken to enter the trade.



SBI STRANGLE STRATEGY



LEG1: BUY SBIN 2000 CALL @ 32

LEG2: BUY NIFTY 1800 PUT @ 28

COST =60

RISK PER LOT = (32+28)*50=7500

RETURN = UNLIMITED

NOTE: This is closing rate as on 07/12/11



1 comment:

  1. GOOD BLOG.option call put strategy given helps a lot for trading.keep it up

    ReplyDelete