SBIN: Chart setup & Strategy

STATE BK OF INDIANSE

Description

⋅ Jul 10, 2020 4:31 AM

SBIN
CMP 201

Observation

- the stock is having support around 192 levels

- resistance is seen around 218-220 levels

Given the setup one may consider Short strangle strategy for SBIN

Consider selling SBIN 30 July expiry

220 Call Option between 4.5 - 5 ( CMP 4.5)
& also

185 Put Option between 4 - 4.5 ( CMP 4)

Lot size 3000

Profit potential Rs 25500/ - to Rs 28500/- ( total premium collection 8.5- 9.5) per lot as per CMP
Yield potential of 12.75% - 14.25%

Loss in strategy if closing on 30 July 2020 is below 176.5 or above 228.50

Take care & safe trading...!!!

Comments

KonHe

⋅ Jul 29, 2020 3:21 PM

Thank you sir again good profit.

rahul5275

⋅ Jul 11, 2020 1:08 AM

Nice strategy but an exit plan should also be there, in case the strategy fails... Great effort..

Sriram1987

⋅ Jul 10, 2020 8:23 AM

Sir i bought SBIN 190 PE & 220CE... (July expiry) is this fine ?

indiamarketoutlook

⋅ Jul 10, 2020 9:17 AM

@cf6a10555aea4015961d694f9b7f21,

It all depends on what your view is? And your comfort level with risk::reward ratio involved in the trade.

If your view is SBIN would close either below 178 or above 232 by 30th July, & if it actually does then ur strategy would break even at those levels.

At the same time any closing price between 190-220 on 30 July would make your Options completely worthless. So that would be your risk.

As long as you understand what your risk is and what the reward potential is and u are okay with what ever the outcome is, then your strategy is fine.

UmeshMishra

⋅ Jul 10, 2020 10:03 PM

@Sriram1987, buying OTM option will erase yr capital , you need huge one sided movement to make money with option buying.