Wednesday, January 04, 2006

ITC For The Day

4th January 2006

Today we have an interesting trade in ITC. This was it know as the ratio back spread. The assumption is ITC will move up.

The trade is as follows:

Market Lot of ITC 2250

Tuesday close price 143.1

The trade:

Sell 1 ITC Jan 145 Call @ 3.75

Buy 2 ITC Jan 150 Call @ 1.90

The total risk with this strategy is Rs 313

The Maximum profit possible is unlimited

Good Luck!

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