SBI Trade for results

Dharam Chand Sethia Uncategorized Leave a Comment

SBI Long Straddle 340 @ 26.

Sbin will see good activity next month due to –

  • RBI/Federal reserve rate decision and
  • It’s own results.

The dates are not yet announced but mostly it’s announced in the 2nd -3rd week of august.In past few weeks SBIN has seen some sharp moves too.Let’s see how the month of august holds for SBIN.

 

 

A straddle involves buying Call and put of same strikes. The expectations remain to enjoy the upside of volatility.Straddle gains value in case of rise in volatility and falls due to time value.

In case of sbin buying 340 call and put of august expiry will cost almost Rs 26.An investment of Rs.26*3000(lot size)= Rs.78000 will be required to initiate this trade.The pay off of this strategy looks like this –

We’re putting in this trade as the volatility is not yet at elevated levels, and expect a rise in volatility in coming days.

 

 

Disclaimer – This post is for educational purpose only.Talk to your financial advisor before taking action.

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