NIFTY
Algo Strategy Protective Put is an options strategy where a trader is still Bullish about a Stock but uncertain about near term fluctuations in market . So he buys a ATM PUT to protect the downside .
Strategy :
Long Shares Reliance Shares 1000
BUY ATM PUT
Reliance Share Price : 2700 Quantity : 1000 Shares
BUY ATM PUT Strike 2700 : Premium Paid Rs. 58
If Reliance Stock Increase to 2800
Maximum Profit : (2800-2700 ) X 1000 ( Quantity of Shares )- 58 X 1000 = Rs. 100 X 1000 -58 (Premium Paid ) X 1000 = Rs. 42000
Formula for Maximum Profit : Price of Underlying – Purchase Price of Underlying – Premium Paid
Maximum Profit : Price of Underlying > Purchase Price of Underlying + Premium Paid
If Reliance Stock Decrease to 2600
Loss : 58 X 1000 + (2700 – 2700) X 1000 = Rs. -58000
Maximum Loss : Premium Paid + Purchase Price of Underlying – Put Strike + Commissions Paid
ALGO Strategy BULL CALL Spread : Algo Strategy : Costless Collar
Reliance Options Chain Website : https://www1.nseindia.com/marketinfo/companyTracker/mtOptionKeys.jsp?companySymbol=RELIANCE&indexSymbol=NIFTY&series=EQ&instrument=OPTSTK&date=-
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