STRAP OPTION STRATEGY FOR JULY'2016

"BUY 2 LOTS TATASTEEL 350 CALL@ 5.80" 

&

"BUY 1 LOT TATASTEEL 330 PUT@ 7.90"
Pay off Table

Strike Price	Call Option Price	Strike Price	Call Option Price	Closing price	Return from call	return from put	gross return	payoff
350	5.8	330	7.9	300	0	60000	60000	16605
350	5.8	330	7.9	305	0	50000	50000	6605
350	5.8	330	7.9	310	0	40000	40000	-3395
350	5.8	330	7.9	315	0	30000	30000	-13395
350	5.8	330	7.9	320	0	20000	20000	-23395
350	5.8	330	7.9	325	0	10000	10000	-33395
350	5.8	330	7.9	330	0	0	0	-43395
350	5.8	330	7.9	335	0	0	0	-43395
350	5.8	330	7.9	340	0	0	0	-43395
350	5.8	330	7.9	345	0	0	0	-43395
350	5.8	330	7.9	350	0	0	0	-43395
350	5.8	330	7.9	355	20000	0	20000	-23395
350	5.8	330	7.9	360	40000	0	40000	-3395
350	5.8	330	7.9	365	60000	0	60000	16605
350	5.8	330	7.9	370	80000	0	80000	36605
350	5.8	330	7.9	375	100000	0	100000	56605
350	5.8	330	7.9	380	120000	0	120000	76605
350	5.8	330	7.9	385	140000	0	140000	96605
350	5.8	330	7.9	390	160000	0	160000	116605
350	5.8	330	7.9	395	180000	0	180000	136605
350	5.8	330	7.9	400	200000	0	200000	156605

STRAP OPTION STRATEGY FOR JULY'2016

"BUY 2 LOTS TATASTEEL 350 CALL@ 5.80" 

&

"BUY 1 LOT TATASTEEL 330 PUT@ 7.90"

TIMING IS ESSENCE WHEN BUYING CALL OPTION

Timing is of great essence in the stock market. Same applies to the derivatives market too, especially since you have multiple options. So when do you buy a call option?
To maximize profits, you buy at lows and sell at highs. A call option helps you fix the buying price. This indicates you are expecting a possible rise in the price of the underlying assets. So, you would rather protect yourself by paying a small premium than make losses by shelling a greater amount in the future.

You thus anticipate a rise in the stock markets, i.e., when market conditions are bullish.

Timing is of great essence in the stock market. Same applies to the derivatives market too, especially since you have multiple options. So when do you buy a call option?

To maximize profits, you buy at lows and sell at highs. A call option helps you fix the buying price. This indicates you are expecting a possible rise in the price of the underlying assets. So, you would rather protect yourself by paying a small premium than make losses by shelling a greater amount in the future.

You thus anticipate a rise in the stock markets, i.e., when market conditions are bullish.

BANKNIFTY WEEKELY EXPIRY STRANGLE STRATEGY

BUY 1 LOT
"BANKNIFTY 17800 9 JUN CALL@ 110"
"BANKNIFTY 17400 9 JUN PUT@ 107"
KEEP READING FOR TARGET UPDATES...

RELIANCE COMBO STRATEGY UPDATE

"RELIANCE FUTURE BOOK PROFIT 990"
KEEP READING FOR NEXT UPDATE

RELIANCE FUTURE & OPTION COMBO STRATEGY FOR JUNE'2016

"BUY 1 LOT RELIANCE FUTURE @ 970"

"1 LOT RELIANCE 960 PUT @ 19 "

"1 LOT RELIANCE 980 CALL @ 21"

FOR FURTHER UPDATES KEEP READING....

HINDALCO FUTURE & OPTION COMBO STRATEGY PROFIT BOOKING

HINDALCO FUTURE OPTION STRATEGY GIVEN IN LAST POST
"BOOK HINDALCO FUTURE @ 89"
"BOOK HINDALCO 92.5 PUT NEAR 6"
 CONTINUE TO HOLD CALL

FUTURE & OPTION COMBO STRATEGY FOR MAY'2016

"SELL HINDALCO FUTURE @ 92.5" 

"BUY HINDALCO 92.5 CALL @ 4"

"BUY HINDALCO 92.5 PUT @ 4"

FOR TGT UPDATES KEEP READING...

PALIN VANILA OPTION 2 STEP STRATEGY

"BUY 2 LOTS TATAMOTORS 420 CALL @ 5 "

FOR TGT UPDATE KEEP READING....

OBLIGATIONS OF AN OPTION SELLER

UNDERSTANDING ASSIGNMENT RISK

Option sellers collect a cash premium. That's the primary reason that investors sell an option. When that option expires worthless, the cash premium represents the option seller's profit, but it does involve some risk of losing money. Pretty simple stuff.

Similarly, traders may sell an option as part of a spread position. Once again, collecting a cash premium drives the sale. However, this time, the cash collected is used as a hedge, or a trade that offsets the risk of owning another position. Hedging is a bit more complex than simply selling an option. For example, when you buy one call option (hoping for the stock to rally), you can sell a different option, collect some cash, and reduce the sum of money at risk -- just in case your expected rally does not occur. The concept is easy to understand once you learn to understand how options work.) About options for beginners will help.

Options do not always expire worthless, and it is essential that every option trader understands what happens when the option does not expire worthless.

Whenever you sell (write) an option that you do not already own, you become legally obligated to honor the terms of the option contract sold.

WHAT ARE THOSE OBLIGATIONS?

The call seller agrees to sell 100 shares of the underlying stock to the call owner. The trade occurs at the option strike price.  This obligation remains in effect until the option expires.

The put seller agrees to buy 100 shares of the underlying stock from the put owner. The trade occurs at the option strike price.  This obligation remains in effect until the option expires.

 WHAT TRIGGERS THE OBLIGATIONS?

The obligations are only theoretical until something happens that triggers the process. Call owners have the right to force the option seller to honor his/her obligations by exercising those rights. As soon as the call owner instructs his/her broker to exercise, the option seller's obligations are triggered.  Note that the option seller cannot force the option owner to exercise. That decision rests entirely with the option owner who bought the option and paid cash to own the right to exercise.