Covered Strategy for Future & Options

Cairns Ind ( Nse Fut 150.90 ) - Lot size 1250
1)Buy (1 lot) Fut Cairns of December Month @ 150.90 Rs
Approx. Margin Paid = 150.90 *1250 *15% = 28293.75 Rs
2)Sell ( 1 lot ) Call Option Cairns of December Month Strike Price 150 @ 8.95
Premium Received = 1250 * 8 = 11187.50 Rs

Net Margin Paid = 28293.75 - 11185.70 = 17106.25 Rs
Maximum Profit in this strategy = Net Premium received = 11187.50 Rs
Loss from the strategy = Fut Buy Rate - Call Premium = 150.90-141.95 = 141.95
* Imp : In this strategy no loss till Cairns falls below 141.95.

Breakeven = 141.95

Note : Cairns Ind is looking good for short term delivery. Buy at cmp for target 160-177-184 for short term. In the above strategy maximum profit will be earned if Cairns moves up till expiry. Also no loss till 141.95. All the rates above are without brokerages, so net profit / loss will vary accordingly.

Cairns Ind, Covered Strategy for Future Options, In The Money Option
12/12/08

100% Profit in Strategy For option Players of RPL