Tuesday, 1 April 2014

TATAMOTORS STRANGLE STRATEGY

Buy Tatamotors 430 call @4.5
Buy Tatamotors 380 put @4.5
COST =9
RISK PER LOT = 9000
RETURN = UNLIMITED
UPPER BREAK GIVEN POINT=439
LOWER BREAK GIVEN POINT=371
Pay off table:...

Strike Price
Call Option Price
Strike Price
Call Option Price
Closing price
Return from call
return from put
Payoff
430
4.5
380
4.5
350
0
30000
21000
430
4.5
380
4.5
360
0
20000
11000
430
4.5
380
4.5
370
0
10000
1000
430
4.5
380
4.5
380
0
0
-9000
430
4.5
380
4.5
390
0
0
-9000
430
4.5
380
4.5
400
0
0
-9000
430
4.5
380
4.5
410
0
0
-9000
430
4.5
380
4.5
420
0
0
-9000
430
4.5
380
4.5
430
0
0
-9000
430
4.5
380
4.5
440
10000
0
1000
430
4.5
380
4.5
450
20000
0
11000
430
4.5
380
4.5
460
30000
0
21000
430
4.5
380
4.5
470
40000
0
31000
430
4.5
380
4.5
480
50000
0
41000
430
4.5
380
4.5
490
60000
0
51000
430
4.5
380
4.5
500
70000
0
61000
430
4.5
380
4.5
510
80000
0
71000
430
4.5
380
4.5
520
90000
0
81000
430
4.5
380
4.5
530
100000
0
91000
430
4.5
380
4.5
540
110000
0
101000
430
4.5
380
4.5
550
120000
0
111000



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