Ranbaxy:how can ppl miss this hedge?....

#1
........or am i missing something very basic here

Ranbaxy closing prices
Spot price - 522
September futures - 386
September call - strike - 380 price - 142

so basically if i sell the above call and buy futures
then i am hedged till 380-142 = 238

all the above futures and options contracts are liquid
and there are other sept and august calls with 500 strike prices

considering the open offer and its impact on stock price, why are ppl not taking advantage from this trade....i have been observing this for the last 4 days and the gap is not closed.

am i missing something basic here? can you pls explain?

Thanks,
Vishal
 

bandlab2

Well-Known Member
#2
yes you are missing something. that is options in stocks are american type - they can be excerised. please visit derivatives section, there is a thread on this with views from several posters
 
#5
I am short on ranbaxy from 400 levels ( 10 lots of sept futures) this was my first trade in futures, my broker told me for sure that the price will surely go to 370-375 levels but right now it is 415. Should I hold or should i book my losses and quit my position?

(This is my first post of www.traderji.com so need the advise as to what to do?)
 

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