Chance to buy Reliance Natural below Rs.40?

Naked Put Option Selling Strategy:
Risky strategy provided you wish to own the stock one lot of 1788 stock around 40 rs. thats about an investment of Rs.80,000 in case the naked put is called upon.
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It had been an interesting month of Jan 2009 for Reliance Natural. It swung between Rs.50-65 in the month of Jan 2009 & on option expiry date last thursday closed around Rs.49.
What strategy can be taken for February 2009?

Are you interested in buying RELNAT below Rs.40? Try selling a naked put of 40 of RELANT above Rs.2 for February 2009 option expiry.

Most probably you may own the stock around Rs.40 by February one lot. If that does not work out option premium of about Rs.3600 is yours pocketed safely.

Sathyam Pays-SATCOM

A few days back I wrote about covered call on sathyam - SATCOM. Yesterday SATCOM zoomed past 38 and hovering around 39. So if one had written covered call it would have been a nice profit of Rs. 10 on stock of Rs. 23 times lot of 600 thats about 6000 rs on investment of 13,800/- Rs. in 5 trading sessions.

Look out for more such ideas!

Cheers

JK

Satyam Computers Covered Call

Satyam Computers- SATCOM is in the news for quite some time and making ripples in NSE. Its hovering between 22-27 trying to break below or above not knowing which direction it should take.



SATCOM one lot is 600 shares. If you can try to get SATCOM stock around 23 or below and able to write a covered call of 30 expiry Jan 2009 for Rs.3 or above there is a possibility for nice profit of 50% in less than 10 trading days!

These are the possible scenarios:

• If the stock closes below 30 by Jan 29th expiry your cost of holding is about Rs.20.
• If closes above 33 on expiry date exit the stock and pay for the covered call and you can make profit of Rs.10 per share (33-23) = 6000 on an investment of 13800/- initial cost of purchase of 600 stock of SATCOM. Not bad a profit of 50% in ten days which is annualized profit of tons!

When going gets tough tough get going. See if this works!



Cheers

JK

HCLTEC An opportunity again

A few days back HCLTEC was at about 110 and it rose to 130+. Yesterday its back again at about 110 (Plunged day low of 102 & high of 133) on Chaos selling on account Sathyam episode.

Is there an opportunity again for HCLTEC to gain again if one invests lows of 100?

Try again for a covered call opportunity if exists buy about 650 shares (1 lot of HCLTEC) and sell covered call of 115 beyond 13 rs for Jan 2009.

A good opportunity for covered call again with 18 Rs. profit on 110 investment about 15% return in a month's time.

Cheers
JK

Where is NIFTY Headed?

Come Jan 2009 there appears an enthusiasm pervading the air. Market last friday 2nd Jan 2009 closed about 3050 NIFTY. Thats wonderful. Is not it? When compared to downside of 2500 NIFTY seeing 3050 NIFTY looks attractive.

So where is likely market heading in Jan 2009?

Pundits predict it will see 3250 in a couple of weeks. Wow if so our subdued stocks will go up?

OK Where ever it may go - that is what an unknown figure - by Jan end can it cross 3350 NIFTY? If so what is the probability?

Such a probability is what is told in terms of Delta of an option. The current delta of 3350 Nifty is about 0.20. Which means there is about 20% chance that by Jan 2009 Last Thursday it can cross 3350. But will it cross really? Well If I know that I would be the king.

Apart from that as the probability is low - delta is low there is a chance here for selling NIFTY 3350 CALL say about Rs.50 if exists we can definitely hit that by selling 3350 CALL Jan 2009!

What is the risk of this? If Market crosses 3400 (3350+50) we lose 1 rs for every one point increase. Well if Market crosses 3400 I am really happy my stocks go up.

If you have such view try selling 3350 NIFTY beyond Rs.40 and there is a great DELTA working in your favour which can help you realizing a good amount if Market does not cross 3350!

JK

HCLTEC an opportunity missed

On the day I wrote for HCLTEC Covered call it was at about 110 Rs. And the chance of covered call sale of 115 beyond 10 Rs. never existed as no takers.

Today (4 days later) HCLTEC Crossed 124 Rs. This is about 14 *650 = 10,000 Rs. return on 65000 Rs. if one had bought 650 shares of HCLTEC at 110 and exited today at about 124 Rs.

Some times covered calls missed also give such rare opportunites. This is really a marvellous return of 14 Rs. on 110 for 4 days If some calculates the percentage p.a I think its really a great percentage

Watch out for such info.

JK.

RELNAT Zooms Beyond 60

A few days back I wrote of naked put selling. There was an opportunity on that day to sell put 45 at about 3 rs beyond.

Today the market zoomed and RELNAT zoomed beyond 60 Rs.

If one had sold a put of 45 at 3 and squared today about Rs.1 its 2 Rs. for 1788 = Rs.3500 approxmately in 3 or 4 days.

Is not this a decent gain in down markets? Good Luck try next time for such opportunities.

JK

HCLTEC at 112 an opportunity for covered call

HCL Technology has been doing good in terms of price. Recently its 52 week low was about 102 rs. Currently trading around 110-113. There is a good covered call opportunity available for this stock. The covered call jan lot is 650 stocks. if you can invest about 110*650 = about 72,000/- rs and sell the covered call of 115 at about 5 Rs. one lot = 650*5 = 3250 Rs. If HCLTEC closes above 120 by Jan month end you get to gain about 10 Rs. per share thats about 120% p.a. return.(Assuming you bought at 110 Rs.) If the stock lies below 115 by Jan Month end your stock cost of acquisition would be about Rs.105.

How to Buy Reliance Natural at Rs.38

Reliance Natural (ICICIDIRECT Code - RELNAT).I was fascinated by the price 52 week low of 36 about and high of about 250 about of Reliance Natural. I wish I had bought at 36. The current Market price is about Rs.53 as of 26th December 2008. I wish I could buy at 36 around....Do you really want to buy at about these prices say around 38 Rs.? Is that sounding crazy when current market is about 53 how I can get for Rs.38?Yes its possible - or I should say may be possible. If you are really sure that you will buy around 38 then only experiment about this step. Means when it goes to zero also you should be willing to pay Rs.38 per share. Its crazy?The strategy is Naked Put Selling. Its risk involved. But you are really interested and want to give a try = Here is the way.The current RELNAT Put of 40 strike price is about 1.5-2. If market sinks try selling this put above Rs 2 for January 2009 Put 40 strike. If by January 2009 Last thursday RELNAT is below 40 you are sure to get what you wished for.Good Luck.JK.

Option Strategy for January 2009

This strategy is a covered Call Option on Reliance Natural - ICICIDIRECT Code RELNAT.The current Stock Price of RELNAT is Rs.52. Buy 2000 shares of RELNAT. Investment = 52*2000 = 104,000 Rs. The following calculation is made with out consideration of Brokerages.RELNAT 1 Option Lot is 1788 Shares.Cost of Buying RELNAT 1788 Shares = 1788* 52 = 92976 = approx 93,000/-Using the above shares as Margin Sell a covered call of RELNAT 55 Strike Price. Current Option Price = 5 approx. So you will receive 5*1788 = 8940 Rs. as option premium as call seller. approx 9000/-At January Month end if the stock closes above 60 You can Sell Your stock at month end price & pay off the Covered Call sale.This would give a profit of(60-52= 8) 8*1788 = 14304 Rs on an investment of Rs.93,000/- ie., ie., about 15% Return for one month. = 180% return p.aIf the stock closes below 55 You get to retain 8940 full and between 55 & 60 you pay between zero to 8940. If the stock closes below Rs. 55 by January Month end your cost of holding the stock will be 52-5 = 47 which is really good. Isnt it?

Welcome To JK Options

Welcome to JK OptionsThis site is for sunset people. Who wish to enhance their monthly income through simple techniques of options trading.Vision of the site : Enrich the knowledge of the folks on sunset times to have a better income for better living.

JK