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Traders can consider initiating a bear put spread in options of NTPC’s February series. This option strategy can be set by buying 150 put options and by selling 140 put options. These options were trading at Rs 2.20 and Rs 0.65 at the end of Wednesday session. Since it is a bear put spread there will be an initial inflow which in our case comes at around Rs 1.55 (Rs 2.20 minus Rs 0.65). This will also be the maximum loss from this strategy.
The maximum profit from this strategy will come around Rs 8.45 (Rs 150 minus Rs 140 minus Rs 1.55)
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