Approx. Margin Paid = 21.20 *1970 *30% = 12529.20Rs
2)Sell ( 1 lot ) Call Option IFCI of Jan Month Strike Price 25 @ 1.05
Premium Received = 1970 * 1.05 = 2068.50 Rs
- Net Margin Paid = 12529.20 - 2068.50 = 10460.70 Rs
- Maximum Profit in this strategy = 25- 21.20 + 1.05 = Rs 4.85 *1970 = 9554.50 Rs
- Loss from the strategy = Fut Buy Rate - Call Premium = 21.20-1.05 = 20.15
- * Imp : In this strategy no loss till IFCI closes below 20.15 on expiry.
- Breakeven level = 20.15
Technical View : IFCI is looking good for short term. Last 2 days the stock saw a stiff correction from a high of 26.75 to low of 20.25. The stock likley to move up from Cmp. Buy the stock with short term view with a strict stop of Rs 17.50 on closing basis. Expected target 28-32-36.
The above strategy is good for trending markets. In this case we Buy FUT & Sell OUT OF THE MONEY CAll expecting the stock to move. Also if you buy more than 1 lot, then you can also partially sell AT THE MONEY CALLS & OUT OF THE MONEY CALLS to reduce risk & maximise your profits. In that scenario the profits & loss will vary accordingly.
Maximum profit will be earned if IFCI Fut moves up till expiry. All the rates above are without brokerages, so net profit / loss will vary accordingly.
Point to Remember : To trade in Options you need to have a clear view of the markets ( UP /DOWN/FLAT ) & knowledge about the Moneyness, Stike Price, Time Value & its logics.