IDEA - Merger - 26% up - Now What?

30 янв. 2017 г.

Personally,

I am entering into a long strangle.
This is an option strategy,
which is non-directional.

CMP - 97.6
Buying - 95 Put - @5.95
Buying - 100 Call - @5.35

Total Buying Cost - 11.30

I'll explain in detail in the comments after market hours.

30 янв. 2017 г.

Заметка

Ok, so here is the reasoning.

My fellow new traders in learning mode, who have less idea about how options and option strategy works, should definitely search and read about this strategy. { in short, I don't care if it moves up or down, I just care about it moving. I'll make money if it does, I'll lose money if it doesn't . the expected result is that the gain of option (call/put) will be more than the loss in the other option(call/put) } A lot more detailed the strategy is, I just explained you in short.

Coming to this idea,

So, now that we have news, coming of merger and budget, and regulatory issues; I expect the stock to move good.

straddle ( another similar strategy) would have been more expensive and riskier.

Hence, bought this combo.
Thanks.

My timeframe is around 2-10 days depending on how it plays out.

I'll exit once it becomes unattractive.

30 янв. 2017 г.

Заметка

For educational purpose only. Please don't trade options until you gain full understanding.

31 янв. 2017 г.

Сделка активна

CMP - 104.1
95 Put - @4.00
100 Call - @8.75

Total buy - 11.3
Total now - 12.75

1.45 increase per lot (7000)

31 янв. 2017 г.

Заметка

To all value of options - 13.1 . Trading active.

31 янв. 2017 г.

Сделка активна

So it moves. 16% up.
100 Call - 14.3
95 Put - 2.2.

Total -16.5 now
I.e. 5.3 × 7000 increase

31 янв. 2017 г.

Сделка закрыта: достигнута тейк-профит цена

100 Call - 14.1
95 Put - 2.2

Total 16.3

Buying done yesterday closing @ 11.3.

Total buy value - 11.3x7000 = 79,100
Total sell value - 16.3 x7000 = 1,14,100
Profit = 35,000 . Or around 40%

Was a safe trade moreover.

Cheers !!

31 янв. 2017 г.

Заметка

Fellow traders and followers, you saw this trade and saw how we profited from it. We were hedged on both sides.

So I would encourage you to read up on option strategies and particularly 'strangle' to greatly benefit from such events with very less risk.

Regards.

31 янв. 2017 г.

Заметка

Indicator update ( ADX Color Easy )

Wow !

It has surpassed even the green zone and is above 60.

usually adx doesnt hold these levels and should fall.