SmartInvestor : Ranbaxy has been firming up in the past few sessions. The stock is active in the options segment today. What is your take on the pharma major for Dec options expiry?
Shshank Mehta : We observe strong resistance in RANBAXY at 460 levels; traders with a bearish can go for a Bear Put Spread; this can be done by Buying 1 lot (in-the-money) Put at 460 strike for Rs24.80 (CMP at 1.35 pm) and Selling 1 lot (out-of-the-money) Put 420 strike for Rs8.15 (CMP at 1.36 pm). The spread has a net cost of Rs16.65 (or Rs8325 per spread). Maximumgain that can be expected in case the counter tests 420 levels on the downside will be Rs23.35 (or Rs11,675 per spread).
SmartInvestor : Reliance Capital is also witnessing activity in the options segment today. What strategy can one deploy for Dec options expiry?
Shshank Mehta : We observe that Stock Options in RELCAPITAL are trading at highers IVs (Implied Vols); Selling a strangle can be a profitable proposition; we recommend traders can Sell 1 lot Call at 420 strike and Sell 1 lot Put at 360 strike. The spread is safe till the counter trades within the range 352 to 428, during the Dec'13 expiry. The gain will be about Rs16 (Rs 16,000 per spread). However, outside the range the spread is prone to loss risk.
SmartInvestor : SunTV is witnessing activity in the futures segment. The stock has firmed up today after being in a downtrend for the past few sessions. Is there build-up of fresh longs in the stock and what is your strategy for Dec futures expiry?
Shshank Mehta : We observe strong resistance in RANBAXY at 460 levels; traders with a bearish can go for a Bear Put Spread; this can be done by Buying 1 lot (in-the-money) Put at 460 strike for Rs24.80 (CMP at 1.35 pm) and Selling 1 lot (out-of-the-money) Put 420 strike for Rs8.15 (CMP at 1.36 pm). The spread has a net cost of Rs16.65 (or Rs8325 per spread). Maximumgain that can be expected in case the counter tests 420 levels on the downside will be Rs23.35 (or Rs11,675 per spread).
SmartInvestor : Reliance Capital is also witnessing activity in the options segment today. What strategy can one deploy for Dec options expiry?
Shshank Mehta : We observe that Stock Options in RELCAPITAL are trading at highers IVs (Implied Vols); Selling a strangle can be a profitable proposition; we recommend traders can Sell 1 lot Call at 420 strike and Sell 1 lot Put at 360 strike. The spread is safe till the counter trades within the range 352 to 428, during the Dec'13 expiry. The gain will be about Rs16 (Rs 16,000 per spread). However, outside the range the spread is prone to loss risk.
SmartInvestor : SunTV is witnessing activity in the futures segment. The stock has firmed up today after being in a downtrend for the past few sessions. Is there build-up of fresh longs in the stock and what is your strategy for Dec futures expiry?
Click here for more...
You’ve reached your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%