25-04-2012, 12:46 PM
TRADING STRATEGIES IN DERIVATIVES
BUY CALL
When market is down, buy just out of money Call.
BUY PUT
When market is Up and correction is due, buy Put.
BUY FUTURE AND SELL CALL
When you are bullish but at the same time you want to cover any downward.
BULL SPREAD
When market is in narrow range, buy “IN THE MONEY” CALL and sell “OUT OF MONEY” CALL.
CALENDER SPREAD
When you want to take TEJI POSITION for the next month, Sell Current Month CALL and Buy Next month Call.
STRANGLE
When you are not sure in which direction the market will go, Buy CALL & PUT of the same strike price.
STRADDLE
When results are expected and you do not know in which direction the stock will move, Buy “OUT OF MONEY” Call and “OUT OF MONEY” Put.
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STOCK INSURANCE
Buy Future and Buy PUT to cover down side.
SELL CALL & PUT
In the last days of the Contract Period, Sell naked “OUT OF MONEY” Call & Put.