Friday, September 30, 2011

Trading Idea: Sell Oct Nifty 5400 Call at Rs. 15

Traders can sell October contract of NIFTY 5400 Call at the current market premium of Rs. 15. Considering the global economic headwinds NIFTY is unlikely to go past 5400 by 25th October 2011 when the contract is due for expiry. Hence the option seller will be able to pocket entire premum received. Also this month has very few trading sessions due to festive season and hence the time premium will erode fast.

Return from the trading strategy:

Assuming trader writes 2 lot of NIFTY (1 lot = 50 NIFTY) at Rs. 15
Total premium collected = 100 * 15 = Rs. 1500
Margin money required: Rs. 37,800 (7% of total call value)
Total return = 3.9 % in 25 days
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1 comment:

  1. Amit AgarwalOctober 26, 2011 at 9:52 AM

    The trade went successful as Nifty couldn't surpass the 5400 levels in the October expiry series.

    Congartulation to all who executed this trade.


    Regards
    Amit Agarwal
    Founder InvestorZclub

    ReplyDelete

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