OPTION CALL PUT STRATEGY
.
Nifty is being
trading in a range bound session since a long time, a break out is at this point. We suggest nifty strangle
strategy is as follows
.
NIFTY STRANGLE STRATEGY
LEG1: BUY NIFTY 5200
PUT @ 70
LEG2: BUY NIFTY 5400 CALL
@ 45
COST =115
RISK PER LOT = 5750
RETURN = UNLIMITED
UPPER BREAK GIVEN POINT=5515
LOWER BREAK GIVEN POINT=5085
Pay off table
Strike Price
|
Call Option Price
|
Strike Price
|
Call Option Price
|
Strike rate
|
Closing price
|
Lot size
|
net investment
|
Total Investment
|
Payoff
|
5400
|
45
|
5200
|
70
|
50
|
4550
|
50
|
5750
|
5750
|
26750
|
5400
|
45
|
5200
|
70
|
50
|
4600
|
50
|
5750
|
5750
|
24250
|
5400
|
45
|
5200
|
70
|
50
|
4650
|
50
|
5750
|
5750
|
21750
|
5400
|
45
|
5200
|
70
|
50
|
4700
|
50
|
5750
|
5750
|
19250
|
5400
|
45
|
5200
|
70
|
50
|
4750
|
50
|
5750
|
5750
|
16750
|
5400
|
45
|
5200
|
70
|
50
|
4800
|
50
|
5750
|
5750
|
14250
|
5400
|
45
|
5200
|
70
|
50
|
4850
|
50
|
5750
|
5750
|
11750
|
5400
|
45
|
5200
|
70
|
50
|
4900
|
50
|
5750
|
5750
|
9250
|
5400
|
45
|
5200
|
70
|
50
|
4950
|
50
|
5750
|
5750
|
6750
|
5400
|
45
|
5200
|
70
|
50
|
5000
|
50
|
5750
|
5750
|
4250
|
5400
|
45
|
5200
|
70
|
50
|
5050
|
50
|
5750
|
5750
|
1750
|
5400
|
45
|
5200
|
70
|
50
|
5100
|
50
|
5750
|
5750
|
-750
|
5400
|
45
|
5200
|
70
|
50
|
5150
|
50
|
5750
|
5750
|
-3250
|
5400
|
45
|
5200
|
70
|
50
|
5200
|
50
|
5750
|
5750
|
-5750
|
5400
|
45
|
5200
|
70
|
50
|
5250
|
50
|
5750
|
5750
|
-5750
|
5400
|
45
|
5200
|
70
|
50
|
5300
|
50
|
5750
|
5750
|
-5750
|
5400
|
45
|
5200
|
70
|
50
|
5350
|
50
|
5750
|
5750
|
-5750
|
5400
|
45
|
5200
|
70
|
50
|
5400
|
50
|
5750
|
5750
|
-5750
|
5400
|
45
|
5200
|
70
|
50
|
5450
|
50
|
5750
|
5750
|
-3250
|
5400
|
45
|
5200
|
70
|
50
|
5500
|
50
|
5750
|
5750
|
-750
|
5400
|
45
|
5200
|
70
|
50
|
5550
|
50
|
5750
|
5750
|
1750
|
5400
|
45
|
5200
|
70
|
50
|
5600
|
50
|
5750
|
5750
|
4250
|
5400
|
45
|
5200
|
70
|
50
|
5650
|
50
|
5750
|
5750
|
6750
|
5400
|
45
|
5200
|
70
|
50
|
5700
|
50
|
5750
|
5750
|
9250
|
5400
|
45
|
5200
|
70
|
50
|
5750
|
50
|
5750
|
5750
|
11750
|
5400
|
45
|
5200
|
70
|
50
|
5800
|
50
|
5750
|
5750
|
14250
|
5400
|
45
|
5200
|
70
|
50
|
5850
|
50
|
5750
|
5750
|
16750
|
5400
|
45
|
5200
|
70
|
50
|
5900
|
50
|
5750
|
5750
|
19250
|
5400
|
45
|
5200
|
70
|
50
|
5950
|
50
|
5750
|
5750
|
21750
|
5400
|
45
|
5200
|
70
|
50
|
6000
|
50
|
5750
|
5750
|
24250
|
5400
|
45
|
5200
|
70
|
50
|
6050
|
50
|
5750
|
5750
|
26750
|
5400
|
45
|
5200
|
70
|
50
|
6100
|
50
|
5750
|
5750
|
29250
|
5400
|
45
|
5200
|
70
|
50
|
6150
|
50
|
5750
|
5750
|
31750
|
5400
|
45
|
5200
|
70
|
50
|
6200
|
50
|
5750
|
5750
|
34250
|
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.