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Anup Menon

INDEX options: Trading interest in index calls continued to decline during the week. No new contract managed to find a place among the list of top 10 traded calls. In contrast puts were placed better. However, in comparison to last week, puts also lost interest with just one new contract finding its way into the list of top 10 traded contracts.

The April 1120 call on the Nifty was actively traded clocking aggregate volumes of close to 289 contracts during the week. It was last priced at 32.10 points. It is ITM. Investors can consider buying the option. The probability of the trade being profitable works out to around 48 per cent.

The April 1180 call also attracted some market interest with aggregate volumes of close to 279 contracts. The option was last priced at 3.90 points. It is OTM. The premium consists of purely time value and works in favour of the seller. Investors can consider selling the option. The probability of the trade being profitable works out to around 63 per cent.

Investors can also consider trading in index put options. Selling the April 1100 put could be a profitable strategy. It clocked aggregate volumes of around 83 contracts.

It was last priced at 1.25. 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 67 per cent.

Investors can consider buying into the April 1160 put on the Nifty. The option is ITM. It clocked aggregate volumes of around 77 contracts. It was last priced at 18.85 points. The probability of the trade being profitable works out to around 48 per cent

Investors can also consider buying a strangle using the April 1180 call and the 1140 put on the Nifty. The probability of the trade being profitable works out to around 83 per cent.

Performance of recommendations

As recommended last week investors who had sold the April 1180 call on the index would have gained around 0.10 points, putting the cumulative gain on the position over the last two weeks at 4.95 points. However, investors who had sold the April 1160 call would have seen their position lose value by around 0.85 points. Investors who had sold either the April 1100 put or the April 1120 put would have seen their positions gain 2.25 points and 5.75 points respectively.

Stock Options - Calls and Puts

Among the actively traded stock options were contracts on Satyam Computers, Digital Equipment and Infosys Technologies.

Options on Satyam Computer were fairly active during the week. For instance, the April 280 call on Satyam Computers was among the most highly traded calls clocking aggregate volumes of close to 3371 contracts. It is marginally OTM. It was last priced at 8.65 points. Investors can consider buying the option. The probability of the trade being profitable works out to around 35 per cent.

Investors can also consider trading in the April 300 calls on Satyam Computers. The contract clocked volumes of 491 contracts. It is OTM. It was last priced at 3.05 points. The premium consists of time value and works against the buyer. Investors can consider selling the contract at current levels. The probability of the trade being profitable works out to around 66 per cent.

Investors can also consider trading in put options on Satyam Computers. The April 240 put was active with close to 953 contracts being traded during the week. It is OTM. It was last priced at 0.90 points. The premium consists of purely time value and works in favour of the seller. Investors can consider selling the option. The probability of the trade being profitable works out to around 92 per cent.

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