Monday, 1 January 2018

RELCAPITAL STRANGLE STRATEGY FOR JAN 2018

"BUY 1 LOT RELCAPITAL 620 CALL @ 26
AND
BUY 1 LOT RELCAPITAL 580 PUT @ 19"
PAY OFF TABLE :-

Monday, 11 December 2017

HOW TO WRITE OPTION WITHOUT "RISK"

One of the less risky option strategies is called “covered call writing.” For example, you own a stock that has increased in price but you don’t want to sell it because of the capital gains tax or some other reason. However, you also think the market may be going down and it could affect the stock price. So, you sell a call option against your stock and receive a premium for that option. If the stock does go down, then the option will probably expire worthless and you keep the premium. However, if the stock goes up in price, you may have to sell the stock if the buyer of the call option exercises his right. Before that happens, you can buy back the option and keep your stock, so your only cost was the difference in the initial premium received and the amount you had to pay to buy back the option.
Now let’s say you sell a naked call option on XYZ stock when the price of the stock is Rs100 but you think the price is going down. Someone bought that option from you because they thought the price was going up. So, before the option expires, the stock moves to Rs120. Now the buyer uses his call option to buy the stock from you at Rs100. You then have to go into the market and buy it for Rs120 and sell it to him for Rs100. You've lost money obviously, but the stock could have moved much higher so the potential for loss is unlimited. If you had owned the underlying stock and sold that option, you could just deliver the stock to the buyer of the option as we discussed in the covered call writing example above.

Trading options is not easy and should only be done under the guidance of a professional who not only has the knowledge but also the experience in this area. 

Thursday, 30 November 2017

Tuesday, 28 November 2017

NIFTY OPTION STRIP STRATEGY FOR NOV. EXPIRY 2017

"BUY 1 LOTS NIFTY 10400 CALL @ 37"

"BUY 2 LOT 10350 PUT @ 17"
PAY OFF TABLE :-
Strike Price
Call Option Price
Strike Price
Call Option Price
Strike rate
Closing price
payoff
10400
37
10350
17
50
10000
46980
10400
37
10350
17
50
10050
16980
10400
37
10350
17
50
10100
13230
10400
37
10350
17
50
10150
9480
10400
37
10350
17
50
10200
5730
10400
37
10350
17
50
10250
1980
10400
37
10350
17
50
10300
-1770
10400
37
10350
17
50
10350
-5520
10400
37
10350
17
50
10400
-5520
10400
37
10350
17
50
10450
-1770
10400
37
10350
17
50
10500
1980
10400
37
10350
17
50
10550
5730
10400
37
10350
17
50
10600
9480
10400
37
10350
17
50
10650
13230
10400
37
10350
17
50
10700
16980
10400
37
10350
17
50
10750
20730
10400
37
10350
17
50
10800
24480
10400
37
10350
17
50
10850
28230
10400
37
10350
17
50
10900
31980
10400
37
10350
17
50
10950
35730
10400
37
10350
17
50
11000
39480
10400
37
10350
17
50
11050
43230
10400
37
10350
17
50
11100
46980
10400
37
10350
17
50
11150
50730
10400
37
10350
17
50
11200
54480
10400
37
10350
17
50
11250
58230
10400
37
10350
17
50
11300
61980
10400
37
10350
17
50
11350
65730
10400
37
10350
17
50
11400
69480
10400
37
10350
17
50
11450
73230
10400
37
10350
17
50
11500
76980
10400
37
10350
17
50
11550
80730
10400
37
10350
17
50
11600
84480
10400
37
10350
17
50
11650
88230
10400
37
10350
17
50
11700
91980