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Saturday, Jun 08, 2002

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Selling Satyam 240 call may be profitable

Anup Menon

THE spot market ended Friday on a negative note as investors still seemed to be unsure on how the political scenario will evolve over the next few days. Traders who were long on put options would have seen their position gain value during the day.

The following recommendations for the day were based on closing prices at the derivatives segment on the NSE.

  • The June 240 call on Satyam Computer was the most actively traded call option on the company. It clocked volumes of around 3,084 contracts. It was last priced at 5.70 points. It is OTM. The premium consists of purely time value and works in favour of the seller. Traders can consider selling the option. The probability of the trade being profitable works out to around 77 per cent.

  • Alternatively, traders can consider buying into the June 220 call on Satyam. It was the second most actively traded call on the stock clocking volumes of around 2,034 contracts. It is ITM. It was last priced at 14.85 points. Close to 55 per cent of the premium consists of intrinsic value. The probability of the trade being profitable works out to around 40 per cent.

  • Traders can also consider using the put options on Satyam Computer. The June 220 put on Satyam was the most actively traded put clocking volumes of around 3,336 contracts. It is OTM. It was last priced at 7.50 points. The premium consists of purely time value and works against the buyer. Traders can consider selling the option. The probability of the trade being profitable works out to around 76 per cent.

  • Alternatively, traders can also consider selling the June 200 put on Satyam. It clocked volumes of around 618 contracts. It is OTM. It was last priced at 3.35 points. The probability of the trade being profitable works out to around 72 per cent.

  • Traders can also consider buying into the June 240 put on Satyam Computer. It is ITM. It clocked volumes of around 606 contracts. It was last priced at 18.50 points. Close to 65 per cent of the option value consists of intrinsic value. The probability of the trade being profitable works out to around 40 per cent.

  • Traders can consider creating put spreads on Satyam Computer by buying the June 230 put and selling the June 240 put. The probability of the trade being profitable works out to around 57 per cent.

  • Traders can also consider selling a strangle on Satyam Computer by selling the June 260 call and the June 200 put. The probability of the trade being profitable works out to around 62 per cent.

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