Very purpose of this blog is to find out low risk trades with promising risk reward ratio.
As per trading strategies in options, second week should be dedicated to bear spread and bull spread strategies.
Since there is no anxiety and speculation about rate cut now, one can expect profit booking in next week in banking, auto and real estate. Based on this assumption, below are two bear spread strategies on rate sensitive stocks.
DLF:
Buy DLF 230 PUT of May expiry around 10.50 and SELL DLF 220 PUT of May expiry around 6.50.
Maximum loss Rs. 4000 and maximum profit potential Rs. 6000/-
To reduce loss (if any) sell 180 PUT of DLF @ .90 and Sell 280 Put of DLF @ 1.00. One would get Rs. 2000 and this will bring down potential loss to about 2000/-. Also it would increase possibility to maximize profit to around Rs. 8000/-. Total investment could be about Rs. 100000/- for next 20/25 days.
TATAMOTORS:
BUY TATAMOTORS 280 PUT of April expiry around 8/- and SELL TATAMOTORS 270 PUT around 4.80-5.10.
Maximum loss could be Rs. 3000/- and maximum profit potential Rs.7000/-
To reduce possible loss of Rs. 3000/- sell Tatamotors 330 CALL of May expiry at 1.25. So maximum loss could be Rs. 1750/-. This will also increase possibility to increase maximum profit up to Rs. 8250/-. Total investment could be around Rs. 100000/- for next 20/25 days.
However, one should exit if profit is around Rs. 2000 in these strategies next week, 2% gain within a week.
Risk reward ratio is very good.
Disclaimer: This blog does not take any responsibility of your profit/loss.
As per trading strategies in options, second week should be dedicated to bear spread and bull spread strategies.
Since there is no anxiety and speculation about rate cut now, one can expect profit booking in next week in banking, auto and real estate. Based on this assumption, below are two bear spread strategies on rate sensitive stocks.
DLF:
Buy DLF 230 PUT of May expiry around 10.50 and SELL DLF 220 PUT of May expiry around 6.50.
Maximum loss Rs. 4000 and maximum profit potential Rs. 6000/-
To reduce loss (if any) sell 180 PUT of DLF @ .90 and Sell 280 Put of DLF @ 1.00. One would get Rs. 2000 and this will bring down potential loss to about 2000/-. Also it would increase possibility to maximize profit to around Rs. 8000/-. Total investment could be about Rs. 100000/- for next 20/25 days.
TATAMOTORS:
BUY TATAMOTORS 280 PUT of April expiry around 8/- and SELL TATAMOTORS 270 PUT around 4.80-5.10.
Maximum loss could be Rs. 3000/- and maximum profit potential Rs.7000/-
To reduce possible loss of Rs. 3000/- sell Tatamotors 330 CALL of May expiry at 1.25. So maximum loss could be Rs. 1750/-. This will also increase possibility to increase maximum profit up to Rs. 8250/-. Total investment could be around Rs. 100000/- for next 20/25 days.
However, one should exit if profit is around Rs. 2000 in these strategies next week, 2% gain within a week.
Risk reward ratio is very good.
Disclaimer: This blog does not take any responsibility of your profit/loss.
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