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| Discuss strategy at the Derivatives within the Traderji.com - Discussion forum for Stocks Commodities & Forex; Any more expert strategy? Thanks,... |
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#12
12th October 2007, 12:19 PM
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Re: strategy
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your strategy is good but what do you think about collar strategy?  
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#13
12th October 2007, 12:22 PM
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Re: strategy
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#14
14th October 2007, 02:21 AM
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Re: strategy
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Collar Strategy If u think the share price will rise but you are concerned of a possible fall below the strike prcie A. Your objective is the protect the capital value of your sharesas you have the right to sell your at any time at the strike price A. You pay for this protection by selling the call at B. Depending on the strike prices you choose this could be done for zero cost or even a net credit.CONSTRUCTION Buy 150 Reliance as a underlying shares @ 2560 Buy 1 lot Put at Strike 2490 @ 51 Sell 1 lot Call at strike 2600 @ 91.7 Net Cr. Rs 40.7 Spot Call Put Spot Net Net Price Sell Buy Premium PNL Strike 2600 2490 2560 40.7 2400 0 90 -160 40.7 -29.3 2450 0 40 -110 40.7 -29.3 2500 0 0 -60 40.7 -19.3 2550 0 0 -10 40.7 30.7 2600 0 0 40 40.7 80.7 2650 -50 0 90 40.7 80.7 2700 -100 0 140 40.7 80.7 Risk: Limited Profit: Limited Volatility: You are not affected by volatility. The collar strategy is best used for investors looking for a conservative strategy that can offer a reasonable rate of return with managed risk and potential tax advantages. The key to implementing the collar strategy is selecting the appropriate put and call combination that allows for profit while still protecting the downside risk I have tried my level best to make it simple and understandable. Please get back to me still if any one having a doubt. Regards Ankit Jain Last edited by Ankit Jain; 14th October 2007 at 02:32 AM.
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#15
14th October 2007, 07:41 AM
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Re: strategy
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