Lets Get Down To Trading

Finally its time to trade. The scenario is that the index, that is the nifty in this case, is caught in a wide sideways range. Roughly between 2460 and 2360 range. It can break-out either way soon.

Here is our trade:
We are using the nifty November options. The last traded price is our initial entry price.The Nifty closed at 2418.

Long 1 Nifty 2450 Call @ 57 at a debit of Rs. 5700

Short 1 Nifty 2400 Call @ 80 at a credit of Rs. 8000

Short 1 Nifty 2400 Put @ 72 at a credit of Rs. 7200

Long 1 Nifty 2350 Put @ 53 at a credit of Rs. 5300

Our Total Credit is Rs 4200. Our maximum potential loss is Rs 800 and our maximum profit is Rs 2400. Do Correct me if I have got the numbers wrong anywhere.

Margin requirements differ per broker so Im not mentioning that.

We will follow and evolve this trade as the market moves.Our aim is to minimize our losses and maximize our profits.