Peace of Mind with Collar
The collar trade allows you execute trades at very low risk and still generate good returns. In certain situations it can be a no risk trade or even generate a guaranteed return. Correct application of this trade could generate descent returns and will require little maintenance.
SBIN
Buy 1 lot SBIN futures @ 2433
Buy 1 lot SBIN Put Oct 2400 strike @ 50.30
Short 1 lot SBIN Call Oct 2550 strike @ 25.75
Cost = 2458 + expenses
Maximum risk = 25 points + expenses
Maximum gain = 92 points - expenses (Target 2550)
Margin required = 60000
Will monitor this and make adjustments if necessary in due course.
Present Position
SBIN futures LTP 2384 (Loss 49 points)
SBIN Put Oct 2400 strike LTP 71.80 (Profit 21.50 points)
SBIN Call Oct 2550 strike LTP 15.50 (Profit 10.25 points)
Net Loss = 17.25 points.
Adjustment to be made
Book profit in SBIN put Oct 2400 strike @ 71.80
Book profit in SBIN Call Oct 2550 strike @ 15.50
Buy 1 lot SBIN Put Oct 2350 strike @ 49.80
Sell 1 lot SBIN Call Oct 2500 strike @ 25.00