1. Daily Derivatives Outlook
29 November 2012
Short Strangles & Straddles
Nifty( Nov, Dec and Jan)
Highest Call OI at 5800 Bullish Call Option Trades
Highest Put OI at 5600
Equilibrium at 5700
Buy Raymond 440 CALL at 4
Sell Calls & Sell Puts Simultaneously
5700C & 5700P
Buy Bharti 320 CALL at 3
5800C & 5600P
5900C & 5500P Buy Sun TV 400 CALL at 1.75
6000C & 5400P
6100C & 5300P Buy HDFC Bank 680 CALL at 4.25
6200C & 5200P
6300C & 5100P Buy Bajaj Auto 1850 CALL at 12.5
Buy Bata India 940 CALL at 10
Bank Nifty(Nov & Dec)
Highest Call OI at 11700
Highest Put OI at 11500
Equilibrium at 11600
Bearish Put Option Trades
Sell Calls & Sell Puts Simultaneously
11600C & 11600P
11700C & 11500P Buy IDBI 100 PUT at 0.25
11800C & 11400P
11900C & 11300P Buy Tech Mahindra 880 PUT at 5
12000C & 11200P
12100C & 11100P
Buy Powergrid 120 PUT at 1.25
USD/INR(Dec)
Highest Call OI at 56
Highest Put OI at 55 Buy NTPC 160 PUT at 1.75
Equilibrium at 55.75
Sell Calls & Sell Puts Simultaneously Buy ONGC 250 PUT at 2
56C & 56P
56.5C & 55.5P
57C & 55P
57.5C & 54.5P
58C & 54P
Keynote Capitals Ltd.
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The Ruby, 9 Floor, SenapatiBapatMarg, Dadar (W), Mumbai, India – 400028. Tel: 3026 6000 / 2269 4322

2. NOTES ON OPTION STRATEGIES :
1. Advantages of Options – Profit from Trading range Markets, High Leverage, Built-in
Stop Loss, Higher Probability of Profit using Spread Trades and Increase in trading
opportunities due to multiple legs.
2. Stop Loss : Use 50% stop loss for bought options and 100% stop loss for sold options.
3. Profit Taking : Book profits at 100% for bought options and 50% for sold options.
4. Put Call Ratio ( Open Interest) is bullish at levels between 0.8 to 1.2 and bearish
between 1.75 to 2.
5. Equilibrium strike is with equal Call and Put Open interest with Highest Call Open
interest strike as resistance and Highest Put Open interest as support.
6. Long Call (+C) and Long Put (+P) (OTM, ATM and ITM) are Limited Risk and Unlimited
Reward strategies.
7. Short Call (-C) and Short Put (-P) (OTM, ATM and ITM) are Unlimited Risk and Limited
Reward strategies.
8. Long Synthetic (+C-P) and Short Synthetic (+P-C) (OTM, ATM and ITM) are Unimited
Risk and Unlimited Reward strategies used instead of futures to save margin. They are
useful during expiry week and for long dated options.
9. Long Straddle(ATM +C+P), Long Strangle(OTM +C + P) and Long Guts(ITM +C+P) are
long volatility strategies ahead of events/results etc.
10. Short Straddle(ATM –C-P), Long Strangle(OTM -C - P) and Long Guts(ITM –C-P) are
Short volatility strategies when range-bound action is anticipated.
11. Protective Put (+F+P OTM, ATM, ITM) and Protective Call(-F+C OTM, ATM, ITM)
protect futures positions by buying options. They involve limited risk and unlimited
reward.
12. Covered Call/Ratio Call Write Put (+F-C or -2C OTM, ATM, ITM) and Covered Put/Ratio
Put Write (-F-P or -2P OTM, ATM, ITM) cover futures positions by selling options. They
involve unlimited risk and limited reward.
13. Bull Spread (+C-C), Ratio Bull Spread (+C-2C) and Bull Ladder(+C-C-C) involve buying
a lower call option and selling upper call options.
14. Bear Spread (+P-P), Ratio Bear Spread(+P-2P) and Bear Ladder(+P-P-P) involve
buying a upper Put option and selling a lower Put option.
15. Long Term Options can be used to create investment grade positions using spreads,
synthetics and covered /protective positions.
Keynote Capitals Ltd.
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The Ruby, 9 Floor, SenapatiBapatMarg, Dadar (W), Mumbai, India – 400028. Tel: 3026 6000 / 2269 4322

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