Financial Daily from THE HINDU group of publications
Tuesday, May 10, 2005
Financial Daily from THE HINDU group of publications Tuesday, May 10, 2005 |
|
|
|
|
|
Markets
-
Derivatives Markets Columns - On the hedge Outlook may turn negative for ICICI Bank, SBI, M&M futures B. Venkatesh
THE following strategies are based on Monday's trading in the derivatives segment on the NSE: ICICI Bank: The May futures contract closed at 377.40. The outlook may turn negative if the May contract trades below 372.55. The downside target is 345. Sell May futures after it trades below 372.55. Initiate the position with a protective stop at 382. Trail the stop to control the upside risk. The margin on the futures position is approximately 19 per cent of the contract value. The minimum order size is 700 units. The open interest position is about 15 per cent of the market-wide limit. No alternative strategies are available, as options on the stock are not actively traded. SBI: The May futures contract closed at 621.50. The outlook may turn negative if the May contract trades below 617.15. The downside target is 575. Sell May futures after it trades below 617.15. Initiate the position with a protective stop at 628. Trail the stop to control the upside risk. The margin on the futures position is approximately 17 per cent of the contract value. The minimum order size is 500 units. The open interest position is about 15 per cent of the contract value. Traders can alternatively construct a bear-put spread. This position can be initiated with long May 620 puts and short May 580 puts. The spread can be set up for a net debit of 9-10 points. The position will pay off 30-35 points if the underlying reaches the price target of Rs 580 or if the futures reaches the target of 575. Note that constructing a ratio spread is not optimal because the short options carry high time value. Besides, the 580 puts will be in-the-money if the stock reaches the downside target. M&M: The May futures contract closed at 476.30. The outlook may turn negative if the May contract trades below 472.55. The downside target is 435. Sell May futures after it trades below 472.55. Initiate the position with a protective stop at 484. Trail the stop to control the upside risk. The margin on the futures position is approximately 17 per cent of the contract value. The minimum order size is 625 units. The open interest position is about 5 per cent of the contract value. No alternative strategies are available, as options on the stock are not actively traded. (The opinion expressed in this column is based on technical analysis. There is risk of loss in trading).
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|