Option Trading Call Option

Adani Power :- Put - LTP - 1. 30/Strike Price - 52. 50/ expiry Aug. Now for profit Adani Power have to be traded in atleast (52. 50 + 2.35 = 54. 80), now Adni power traded in 53. 30, suppose it go till 53. 80 wht will be then, am I book profit or I loss my whole premium, any guidance in option trading is also helpful.

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since you have not mentioned if you purchased or sold the PUT option, iam assuming you bought it.

if that is the case, your breakeven calculation is incorrect.  Assuming you have purchased ADANIPOWER PUT strike 52.50 at rs. 2.35;

your breakeven at expiry would be 50.15 and not 54.80 as you mentioned.

Now the scrip is at 53.55.  Looking at charts there does not seem to be any support nearby.  so, assuming the drowntrend to continue.

Now, looking at option chain for ADANIPOWER:

it depends on what you want to achieve from your trade:

  • book loss;
  • wait for the move to happen
  • repair the trade to minimise loss or maybe breakeven.

a) debit spread :you could sell 1 lot 50 strike PUT for re .50 /- to bring your cost down to 1.85; max loss = 1.85 and max profit would now be capped at 2.50 should the scrip close below 50.

b) credit spread: you could sell 55 strike for 2.50, but your would get a net of 15 paisa for a risk of 2.50.  But if you have turned bullish, this might be a possibility.

c) ratio : sell more 2 or more lots a further strikes; extremely risky and not advisable.  make it into butterfly 52.50; 50.00 and 47.50 strikes; here you have 52.50 at 2.35; sell 2 lots of 50 strike at 50 paise each fetching rs.1; buy 1 lot of 47.50 at 20 paise.  cost = 2.35 - 1 + .20 = 1.55

all the best.

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