Futures Trading Strategy for Reliance Power

ravalsb · #1 9th February 2008, 02:34 AM

Hi,

Grey Market premium as of today 8th Feb is 125-150. So the price works out around 575-600.

Now since generally listing is 100 odd rupees above grey market premium, it should get listed between 675-700.

I would be trading in futures segment. Permitted lot size is 450 shares.

Heres my strategy to trade reliance power on the day of listing. I intent to short sell and cover position on the same day.

Sell Futures above 685 and cover below 640 on the same day.

Gross gains inculding brokerage and other costs: 45 x 450 = 20250

Please let me know your views.

Thanks & Regards

hari09omkar · #2 9th February 2008, 02:55 AM

Ap khayali polau achhe pakate hai sahab.

oxusmorouz · #3 9th February 2008, 07:25 AM

What if ??

Quote:

Originally Posted by ravalsb

Hi,
Sell Futures above 685 and cover at 730 on the same day.
Permitted lot size is 450 shares.

Gross loss inculding brokerage and other costs: 45 x 450 = 20250

uasish · #4 9th February 2008, 08:52 AM

Guessing on Air (as there is no data) is akin to gambling not Trading.

ravalsb · #5 9th February 2008, 08:27 PM

Guyz!! Thanx a ton for grounding me safely.

You all really think it to sustain 685 above levels, 'cos i personally dont think so.

Secondly, i totally agree that it is easier said than done...kind a khayaali pulao....but not impossible though...

Thirdly, was indicating at the strategy to go short at higher levels and cover later at reasonable lower levels....and not price band per say...'cos price levels are subjected individual opinion.

Its my personal opinion that REL Power would not be able to sustain 685 and above levels for which i have given somewhat ammateur justification with whatever data I have....its certainly not without any basis, probably you may think otherwise, and your views are welcomed.

Would appreciate if you comment me on the strategy as well as price levels that one should expect to trade within. I am open to criticism guys...have a go at me...if i am wrong somewhere....

awaiting your response...

ravalsb · #6 11th February 2008, 09:46 PM

Hi Guys!

Went short on Rpower @ 440 and recovered @ 400.50

Thanks and Regards

MaxBombay · #7 12th February 2008, 02:27 PM

wow reliance power is trading at 350.

VasanSuccess · #8 12th February 2008, 02:46 PM

Quote:

Originally Posted by MaxBombay

wow reliance power is trading at 350.

It will go back to 250-300 level, as earnings are only after 2012. and Earning expected at 2012 by Rel power is less or same as NTPC current earning.

So the value of this stock is same as NTPC, whose CMP is 190

Just imagine, A company who has earning today is available at better price, You choose.

Still, I don't deny the fact, some of Reliance MUtual fund will actually try to buy these shares to make this stock a green in some days, wait for that day and sell, If you have some shares.

oxusmorouz · #9 12th February 2008, 05:51 PM

Quote:

Originally Posted by ravalsb

You all really think it to sustain 685 above levels, 'cos i personally dont think so.

It is a capital mistake to theorize without data. Neither Mr.Asish or I offered any view as to how the IPO will open and at what price it will sustain. Since you were guessing on the levels, with the data you have given us (i.e, had it listed at 685, no other data was provided), here is the possible price range (considering a 10% volatility on opening day):

HTML Code:

http://img240.imageshack.us/img240/9420/relpowfd2.gif

The average pay off from trading each of the simulated prices is, yes that's right, zero.

Besides, the predicted price of listing was incorrect. Infact, the IPO listed at 40% below the price you have mentioned. That is some way off to be called merely a random fluctuation.

Quote:

Originally Posted by ravalsb

Its my personal opinion that REL Power would not be able to sustain 685 and above levels for which i have given somewhat amateur justification with whatever data I have....its certainly not without any basis

Based on what data?

oxusmorouz · #10 12th February 2008, 05:59 PM

Quote:

Originally Posted by ravalsb

Hi Guys!

Went short on Rpower @ 440 and recovered @ 400.50

Thanks and Regards

Rather than the outcome itself, it is how the outcome was achieved and to what extent is governed by randomness or lack of it that is of prime importance.

As Taleb mentioned in Fooled by Randomness, a janior winning a lotter ticket for a million, and a dentist who earns the same after three decades of practice can afford to buy a house of equal value. However, if the janitor was to relive his life a million times, only one out of the million lives he's lived would have earned him a million bucks. The rest of the lives, he would be wasting his money on countless lottery tickets, thus averaging his payoff to zero.
Whereas the range of dispersion for the dentist is far smaller.