Call- Put Option Strategy for Infosys

Call- Put Option Strategy for Infosys

Infosys has a history of tremendous price fluctuation prior to the result. So a good Call- Put Option strategy can reap good results. Presently the stock Infosys is around Rs.2880 and since the Stock market is expecting good results chances are that it can hit Rs.3000 prior to the results.

So my strategy would be to buy a Call for Infosys of Rs. 2900 at around Rs.100 and to be on the safe side and Put of Rs. 2600 or Rs.2700 at Rs.20- Rs.30. So it is likely that Infosys will cross over Rs.2900 before the result, so you would be making profit on the Rs. 2900 call and if the result is good than you can double your investment in just a day or so.

Now you must be thinking, what if the results are not in line with the street expectation, and what then? This is where you need to use the stop loss facility. Since the call option is pretty expensive, you need to put a strict stop loss prior to the results, so that if the result is bad you won’t loss much. Say you put a stop loss of Rs. 70 and Infosys tumbles to 2700 or below than the put you have in your armory will rise to action. Even if Infosys stumbles to 2700 after the result the put you bought may rise to 50-60, so in both case if the price rises or falls, you can reap profit with the call –Put strategy in option.

I am not an expert of any kind but I have been observing the market scenario for quite some time and so thought of sharing my opinion. I am surely gonna try it this result season and hope it pays good dividend.