I have already posted by bullish view on DivisLAB at http://www.trendgurus.in/2012/10/free-weekly-stocks-divislab.html and I am now posting Bullish THE COLLAR options Strategy for next week
I will open this trade next week in following manner.
Buying 1 Lot (Lot size 500) October Future at CMP 1145
Selling 1 Lot (Lot size 500) OTM (Out the Money) Call 1200 October Series at 9.5
Buying 1 Lot (Lot size 500) OTM (Out the Money) Put 1100 October Series at 12
Limited Profit Potential = Max Profit = 57.50 * 500 = Rs 28750
I will open this trade next week in following manner.
Buying 1 Lot (Lot size 500) October Future at CMP 1145
Selling 1 Lot (Lot size 500) OTM (Out the Money) Call 1200 October Series at 9.5
Buying 1 Lot (Lot size 500) OTM (Out the Money) Put 1100 October Series at 12
Limited Profit Potential = Max Profit = 57.50 * 500 = Rs 28750
Limited Risk = Max Loss = 42.5 * 500 = Rs 21250Break Even Point = 1145 (Purchase Price of Underlying) +2.5 (Net Premium Paid) = 1147.5
Disclosure/Disclaimer and FAQ
*If you have any questions, queries or need more explanation, leave comments below also please don't forget to LIKE my page. Our commitment to you: we want to make money with you, not from you. We execute all trades that we share with members at our personal account. If you lose we lose too. If you profit, we profit too. Contact us at [email protected] if you have any questions.
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Disclosure/Disclaimer and FAQ
*If you have any questions, queries or need more explanation, leave comments below also please don't forget to LIKE my page. Our commitment to you: we want to make money with you, not from you. We execute all trades that we share with members at our personal account. If you lose we lose too. If you profit, we profit too. Contact us at [email protected] if you have any questions.
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how u calculate Limited Profit Potential & Limited Risk please explain it if possible.
ReplyDeletethank you
@ Manoj - Here is the calculation behind it.
ReplyDeleteLimited Profit Potential : The formula for calculating maximum profit is given below:
Max Profit = Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received
Max Profit Achieved When Price of Underlying >= Strike Price of Short Call
Limited Risk : The formula for calculating maximum loss is given below:
Max Loss = Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received
Max Loss Occurs When Price of Underlying <= Strike Price of Long Put
I hope you understand Underlying, Strike price, Calls and PUTs. Let me know, if you need more explanation.
Divis Lab Future CMP 1177...Approx 15K profit..Enjoy!!!
ReplyDeleteDivis Lab Future CMP 1215...Approx 35000 Profit in this call..Enjoy!!!
ReplyDelete