Infy strategy

INFOSYS LTDNSE

Description

⋅ Oct 23, 2017 6:37 AM

Infy
Cmp 934

- Infosys record date for buying back shares has been set on 01 Nov 2017

- Buy back price Rs set at 1150 for each share

- Total amount set aside by Infy for buyback Rs 13000 Crore

- Amount set aside for retail category who are holding shares worth Rs 2 lakhs or less on record date - Rs 1950 Crore (15% of total amount)

- As on March 31st 2017, as per Co filings 2.87 Cr shares are with retail category

- The Co will buy back 1.69 Cr shares from retail category

- Expected acceptance ratio can be between 55-59%

Buy 200 shares at cmp

With results set to be announced tomorrow on 24 Oct 2017 one may consider

Buy Infosys 900 October Put option at cmp 3.8

This will protect any major reaction on the negative side if results are bad

-Tender shares in Buyback on 01 Nov 2017

- After confirmation of exact number of shares accepted in buyback, Sell remaining shares at Market price

- Expect profitability to be around 10-13%

Hope this helps

Take care

Happy & safe trading...!!!!

Beyond Technical Analysis INFY

Comments

hotpot64

⋅ Oct 23, 2017 7:11 AM

Hi
Thanks for your guidance, pls inform do we need to keep the put with SL of 0 ?
Thanks

indiamarketoutlook

⋅ Oct 23, 2017 8:08 AM

@hotpot64,

Yes, its without Stop loss

October Expiry is on 26th October 2017
&
Infy Q2 result is on 24th

Buying Put option is only for protection purpose and not the main purpose. Infy has a tendency to give big movements on result day and the idea is not to get badly affected due to any adverse results if any...

Compared to investment of Rs 1.86lakh + in cash buying of Infy shares we are suggesting to buy 900 Oct Put option with a premium investment of Rs 2000 approximately.

If Infy tumbles after result we will not be effected by down slide in stock price as a fall below 900 and Put option will become profitable

In % terms Approximately 1% additional amount is giving protection to main capital investment of Rs 1.86 lakhs....

If it reacts positively or remains sideways the trade is still profitable in cash and will not effect our profitability by more than 1.5% c. We just have to reduce Rs 2000 that we paid for buying protection from overall profit which will not be much...

Works as an insurance... :-)

hotpot64

⋅ Oct 23, 2017 8:28 AM

@indiamarketoutlook, Thanks for your wonderful and detailed explanation as always :-)