The Hindu Business Line : Sell HPCL 260 put

SELECT call options gained value during the day's trading in the derivatives segment on the National Stock Exchange. Top traded options included Satyam Computer, Reliance Industries, HPCL and BPCL among others.

Options on HPCL were actively traded during the day. Traders can consider using the May 260 calls for trading. As recommended on Tuesday, traders with a long position in the option could have closed their position out profitably. The option clocked volumes of around 62 contracts. It is ITM. It was last priced at 35.25 points. Close to 90 per cent of the option value consists of intrinsic value. Traders can consider buying the option. The probability of the trade being profitable works out to around 43 per cent.

Alternatively traders can also consider selling the May 260 put on HPCL. It clocked volumes of close to 31 contracts. It was last priced at 1.25 points. As recommended on Tuesday, traders who had sold the option could have closed out their positions profitably. It is OTM. The premium consists of purely time value and works in favour of the seller. The probability of the trade being profitable works out to around 94 per cent.

Traders with a penchant for risk can consider taking a short position in the May 320 call. It clocked volumes of around 65 contracts. It was last priced at 2.60 points. It is OTM. The premium consists of purely time value and works against the buyer. The probability of the trade being profitable works out to around 90 per cent.

Traders can also consider creating a call spread by buying the May 280 call and selling the May 260 call. The probability of the trade being profitable works out to around 71 per cent.

Options on Satyam Computer were actively traded. The May 300 call was active clocking volumes of around 102 contracts. It is OTM. It was last priced at 1.65 point. The premium consists of purely time value and works in favour of the seller. Traders can consider selling the option. The probability of the trade being profitable works out to around 92 per cent.

Traders can also consider trading in Satyam puts. For instance, the May 240 put was relatively active clocking volumes of around 72 contracts. It was last priced at 2.30 points. It is OTM. Traders can consider selling the option. The probability of the trade being profitable works out to around 84 per cent.

Alternatively traders can consider buying into the May 300 call on Satyam. It is ITM. One potential problem is the relatively low liquidity in the contract. It clocked volumes of just 12 contracts. It was last priced at 36.85 points. The probability of the trade being profitable works out to around 51 per cent.

Traders can also consider creating a put spread on Satyam Computer by buying May 280 puts and selling the May 300 put. The probability of the position being profitable works out to around 70 per cent.

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