In this series we began with two PUT spreads, one in RELIANCE and another in ASIANPAINTS.
RELIANCE gave an opportunity and we took it to book a profit of Rs. 6363 on Monday.
The status of the other trade in ASIANPAINT is shown here:
For the last two sessions this stock is going down after having made new 52 week high. That implies that we are getting the benefit from the trades even though the trend has reversed a bit.
We will remain profitable even if the stock falls to Rs. 1980 ( current price Rs. 2017 ). Let us wait and watch today.
Only 7 days are left to September Series expiry. The premiums are now reflecting that. It will not be possible to get very good profits but we take whatever the market gives.
We set up a trade in INFY.
Based on yesterday’s prices these would be the likely trades:
Buy PUT 990 @ Rs. 25.00
Sell PUT 980 @ Rs. 19.50
Sell PUT 960 @ Rs. 10.50
Initial Credit —- Rs. 4.00 i.e Rs. 4800.
If INFY price ends up above Rs. 990 at expiry, we get to keep this Rs. 4800. If the trend changes and the price gets lower, we do not make a loss till the price gets to Rs. 950.
These are indicative prices and actual prices will vary but we will try for a credit of about Rs. 4.00.
Trade cautiously, trade profitably.
Disclaimer: This post and examples are for teaching purpose only and are not meant as advice/suggestion to trade in these stocks. Trading in Futures and Options can lead to big losses and should be done with appropriate knowledge and advice only. Mentioning the stocks here does not imply that I have a trading position or likely to take a trade in these stocks.