Financial Daily from THE HINDU group of publications
Wednesday, May 15, 2002

News
Features
Stocks
Port Info
Archives

Group Sites

Markets - Derivatives Markets
Columns - On the hedge


Selling VSNL 200 call may pay

Anup Menon

THE spot market ended on a bearish note on Tuesday with the Nifty closing down marginally over Monday's close. Consequently, put options gained value in the derivative segment during the day.

Here are some trading opportunities that traders can consider.

  • Options on VSNL were actively traded during the day. The 180 call was the most actively traded contract on the stock with volumes of 236 contracts. It is ITM. It was last priced at 6.65 points. The entire premium consists of intrinsic value. Traders can consider buying the option. The probability of the trade being profitable works out to around 54 per cent.

  • Alternatively, traders can consider selling the May 200 call. It clocked volumes of around 139 contracts. It was last priced at 2.25 points. It is OTM. The premium consists of entirely 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 87 per cent.

  • Trading in VSNL put options could be fruitful. The May 170 put presents some trading options. However, volumes were relatively thin with only around nine contracts being traded. Traders with a penchant for risk can consider selling the option. The probability of the trade being profitable works out to around 75 per cent.

  • Traders can also consider a call spread by buying May 180 call and selling May 170 call on VSNL. The probability of the trade being profitable works out to around 85 per cent.

  • Alternatively, traders can also consider selling a straddle on VSNL by using the May 200 call and the May 170 put. The probability of the trade being profitable works out to around 77 per cent. Traders should note that selling a strategy is relatively risky.

  • Options on HPCL were also actively traded. The May 320 call was active clocking volumes of around 106 contracts. It was last priced at 4.5 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 87 per cent.

  • Traders can also consider trading the May 280 put on HPCL. It clocked volumes of around 23 contracts. It was last priced at 3.05 points. It is OTM. Traders can consider selling the option. The probability of the trade being profitable works out to around 86 per cent.

  • Traders can also consider a put spread by buying the May 300 put and selling the May 320 put. The probability of the trade being profitable works out to around 66 per cent.

    Send this article to Friends by E-Mail

  • Stories in this Section
    Overseas investment will boost MFs: Report


    Decision soon on redemption of UTI: Bajpai
    StanChart MF awaits approval
    Mild bear domination
    BSE enhances incentives to market makers
    Genesys gains surprise players
    Speculative share deals: I-T panel report likely by May 23
    Thermax jumps on good performance
    Selling VSNL 200 call may pay
    HLL, MTNL pull down Sensex; PSUs weak


    The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
    Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

    Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line