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| Good opoprtunity to earn a big in Reliance Communication. | Views: 383 |
| Nov 28, 2007 9:25 am | | Good opoprtunity to earn a big in Reliance Communication. | # |
Rajkumar lodha | | Dear all,
its time to catch on some of the opportunities available in the market.
Because of dispute over the spectrum allocation RCOM & Bharti Airtel is having tug of war in the stock market. Thus this provide the opportunity in the market for building another option stratergy.
RCOM currently trading at 680 with all time high of 815Rs. Buy 50 shares of RCOM at the current price level. Also at the same time,
SELL call 860 Dec. 07 option at the price of 8.5Rs.
Now lot size is 700, Thus the equation becomes as follows,
(570 - 680) - profit 0 - 5950
(680 - 860) - Profit 5950 - 14000
(860 - 880) - PROFIT 14000 - 0
This is calculated till end of Dec. 07
RCOM has maxmimum probability to lie between the values of 775 - 825 in the coming month if the spectrum issues are resolved, otherwise it will stay in the region of 700 - 725.
Thanks
Rajkumar LodhaPrivate Reply to Rajkumar lodha |
| Nov 28, 2007 11:13 am | | re: Good opoprtunity to earn a big in Reliance Communication. | # |
Shrinath Navghane | | Raj,
Reliance is always a good stock for both long term and short term investors. Lets also try and talk about other stocks which members of PEN can pick up to hold for a 6-12 month period. Can you suggest any?
Cheers!Private Reply to Shrinath Navghane |
| Dec 05, 2007 5:19 am | | re: Good opoprtunity to earn a big in Reliance Communication. | # |
Rajkumar lodha | |
Dear all,
lets take the review of our stratergy in RCOM. Is it fetching some profit??
Yes,
we have sold RCOM call 860 dec. 07 option at 8.5,
now RCOM call 860 dec. 07 is trafing at 6.5, Thus we have earned a profit of 2*700 = 1400/-
Also we have purchased RCOM at 680 & Rcom is trading at 720Rs.
Thus we are at 40rs. profit per share, so total profit is
40*50 = 2000/-
Thus total profit is 3400/- at current price.
As the time we move the option price which is at 6.5 will drop & at maturity if RCOM is below 860 it will become zero. Thus more profit will come. Private Reply to Rajkumar lodha |
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