4 Options Strategies - The Collar

I have already posted by bullish view on DivisLAB at http://www.trendgurus.in/2012/10/free-weekly-stocks-divislab.html and I am now posting Bullish THE COLLAR options Strategy for next week

I will open this trade next week in following manner.

Buying 1 Lot (Lot size 500) October Future at CMP 1145
Selling 1 Lot (Lot size 500) OTM (Out the Money) Call 1200 October Series at 9.5
Buying 1 Lot (Lot size 500) OTM (Out the Money) Put 1100 October Series at 12

Limited Profit Potential = Max Profit = 57.50 * 500 = Rs 28750
Limited Risk = Max Loss = 42.5 * 500 = Rs 21250Break Even Point = 1145 (Purchase Price of Underlying) +2.5 (Net Premium Paid) = 1147.5

Disclosure/Disclaimer and FAQ

*If you have any questions, queries or need more explanation, leave comments below also please don't forget to LIKE my page. Our commitment to you: we want to make money with you, not from you. We execute all trades that we share with members at our personal account. If you lose we lose too. If you profit, we profit too. Contact us at [email protected] if you have any questions.
 
people like this. be the first of your friends.

FREE SUBSCRIPTION

4 comments:

  1. how u calculate Limited Profit Potential & Limited Risk please explain it if possible.
    thank you

    ReplyDelete
  2. @ Manoj - Here is the calculation behind it.

    Limited Profit Potential : The formula for calculating maximum profit is given below:

    Max Profit = Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received

    Max Profit Achieved When Price of Underlying >= Strike Price of Short Call

    Limited Risk : The formula for calculating maximum loss is given below:

    Max Loss = Purchase Price of Underlying - Strike Price of Long Put - Net Premium Received

    Max Loss Occurs When Price of Underlying <= Strike Price of Long Put

    I hope you understand Underlying, Strike price, Calls and PUTs. Let me know, if you need more explanation.

    ReplyDelete
  3. Divis Lab Future CMP 1177...Approx 15K profit..Enjoy!!!

    ReplyDelete
  4. Divis Lab Future CMP 1215...Approx 35000 Profit in this call..Enjoy!!!

    ReplyDelete

Thanks for giving your valuable inputs, TRENDGURUS

OUR EXPERTISE

We provide expert in our field. Over 5+ years of experience we will ensure that you are always getting good guidance from the top people in the industry.

Thought of the day

"The man who has minted money with both hands in the Indian stock market says wealth is important but is not the source of all happiness.", Rakesh Jhunjhuwala

SUBSCRIBE US

Latest News

1) PM Modi fires back at the opposition, forcefully defend demonetisation 2) Nirav Modi to Stay in Jail for at least 28 more days.

By Using this website\Blog, you agree to the Disclaimer provided at Disclaimer -|- Designed by Tritan Solutions Pvt. Ltd -|- Copyright © 2019 -|- All rights reserved

ERP MLM Ecommerce Algo Software Development Company in Delhi | Digital Marketing | Algorithmic Trading | Ecommerce website