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Option Tips - Option writers bet on Bank Nifty staying flat

Discussion in 'Stock Market Discussions' started by Harish, Dec 1, 2015.

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  1. Harish

    Harish New Member

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    Option tips - Having discounted a 25 bps interest rate hike at the US Federal Reserve meeting on December 15-16, options traders here are initiating a strategy to pocket substantial premiums received from selling Bank Nifty options amid limited risks in hopes that the index would trade in a limited range. Called an iron butterfly, the strategy involves selling a December expiry 17500 Bank Nifty call and put for a combined Rs 800 a share and using Rs 250 from this to purchase 18300 and 16700 index call and put to limit any potential loss if the index swings more than expected.
     
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