29.12.09

buy nifty 5100 put of january series

buy nifty put of 5100 strike price of january series and alternately sell nifty put of 5000 series total difference is 25 points .
the total cost will be 25 points ,
as the nifty will move towards 5000 5050 the difference will become bigger that will be the profit
and if the nifty moves higher towards 5300 the difference will become less .and that will be our loss .
in this type of trade profit and loss are limited .maximum loss will be the total premium paid that is 25 points.and the maximum profit will be 100 points which is the difference of strike prices in which we trade.this trades are not much affected by time decay because we have bought and alternately sold options .one thing is sure shot chances of making profit in these types of trades are nearly 85/90 %

No comments: