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