Wednesday, July 10, 2013

Straddle in INFOSYS

Infosys is coming out with its first quarter results tomorrow.
Last 4 quarters we have seen that the share price moving up/down by more than 10% on results day. So the premiums of calls and puts are very high and I am going with a short straddle.

Selling Infosys 2500 call and put would give us an initial credit of 300 rupees.
So we would be in profit as long as the share price stays between 2200 and 2800 on expiry.
We will get a maximum profit of 37500 if Infosys stays at 2500 on expiry.

But remember the loss will be unlimited if Infosys goes below 2200 or above 2800 and hence it is a very high risk trade.

People who feel that Infosys will go above 2800 or below 2200 can consider going for a long straddle. ie,. buying Infosys 2500 call and put.


6 comments:

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  2. I feel there would be a 1% growth in the revenue and Murthy taking over , I dont feel the CMP of the stock will go down drastically as we have seen in the past.

    So decided to sell July-2050-PUT @ 19.15

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    Replies
    1. Good one.. Your loss will start if infy closes below 2030.75. Maximum profit of around 2400 can be made as long as Infy stays above 2050. Please keep posting your strategies.

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  3. Booked loss of 12500.. This loss is covered by naked puts and naked calls in Infy. This would have given a profit of 25000, if the positions are squared off on last wednesday.. Anyway WE SHOULD NEVER REGRET ABOUT THE PAST TRADES...

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