Option Letter

Option Letter (for 3rd July 2008)

While trading options we will always buy either calls or puts. We are going to trade only in liquid calls and puts so that we are able to exit at the earliest. Always trade in options of the current month. (All prices of Call or Puts are updated daily before sending to you. Any question do email us back)

New trader may only trade in Nifty options. Depending on your capital you may go on increasing your exposure.
The target price will be 50% return on your investment, for you to exit out of option, if not otherwise mentioned. If by exercising the option at closing , the targets are met, then exercise the options.
The stop loss will be two days closing below the buying price of the options, if not otherwise mentioned.

Even though market has taken a support at 4000 nifty, but it is still very volatile. Buy below mentioned hedged options as per the instructions.

Take the position at	Share Name	Lot Size	Type (C/P)	Strike Price	Stop Loss
Call
If Reliance spot is above 2150 after 10.15 am	Reliance	75	Call	2100	Two days closing below buying price.
Put
If SAIL Spot is below 138 after 10.15 am	SAIL	1350	Put	130	Two days closing below buying price

We are holding the below mentioned options

Take the position at	Share Name	Lot Size	Type (C/P)	Strike Price	Cost Price	Initial Invest.	LTP on 2nd July	Current Invest.	% Profit and Loss	50% profit target	Remarks
2.14 pm on 2nd July 08	Nifty	50	Call	4100	112	5600	158.10	7905	+41.2%	168	Two days closing below buying price.

Tata Steel put was bought on 1st July 08. Target was met on 2nd July 08. Review of the put given below.

Take the position at	Share Name	Lot Size	Type (C/P)	Strike Price	Cost Price	Initial Invest.	Quitting price as on 2nd July.	Liquidated Investment	% Profit and Loss	High Price	Remarks
12.52 pm on 1st July 08	Tata Steel	382	Put	720	49.25	18814	69	26358	+40.1%	74	Target was met at 10.41 am on 2nd July 08.

Review of the put : Initial Investment Rs.18814, Liquidated Investment Rs.26358 Profit Rs.7544

A sideways market does not give good moves but the moment market starts moving the returns turn out to be quite good. In the long run we will find that playing the full momentum of a stock or Index gives better return on our investment though in sideways market we feel the pinch of it.