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Anup Menon

ON the last day of the week, the spot market ended on a negative note on Friday. Consequently, select call options lost value during the day's trading at the derivatives segment of the NSE.

Here are some trading recommendations based on Friday's trading.

Options on the Nifty were fairly active during the day. The May 1200 call was the most active call option clocking volumes of around 500 contracts. It is OTM. It was last priced at 0.40 points. The premium consists of purely time value and works in favour of the seller. Traders can consider selling the option. The probability of the trade being profitable works out to around 98 per cent.

Alternatively, traders can consider selling the May 1140 call on the Nifty. It is also OTM. It clocked volumes of around 80 contracts. It was last priced at 2.25 points. The probability of the trade being profitable works out to around 90 per cent.

Put options on the Nifty were also actively traded. The May 1100 put was the most active index put clocking volumes of around 230 contracts. It is ITM. It was last priced at 12.60 points. Traders can consider buying into the option. The probability of the trade being profitable works out to around 48 per cent.

Alternatively, traders can consider selling the May 1060 put on the Index. It clocked volumes of around 37 contracts. It was last priced at 2.30 points. It is OTM. The premium consists of purely time value and works in favour of the seller. The probability of the trade being profitable works out to around 81 per cent.

Traders can also consider selling a strangle using the May 1200 call and the May 1060 put. The probability of the trade being profitable works out to around 72 per cent. Traders should note that selling strangles is comparatively risky.

Options on Satyam Computer were active, as usual. The May 260 call was actively traded during the day clocking volumes of around 775 contracts. It is OTM. It was last priced at 2.85 points. Traders can consider selling the option. The probability of the trade being profitable works out to around 81 per cent.

Traders can also consider buying into the 260 put. As recommended on Thursday, traders who had bought the May 280 puts could have closed out their position profitably. However, the May 260 put seems to offer better value given current valuations. It is ITM. It was last priced at 20.8 points. Traders can consider buying the option. The probability of the trade being profitable works out to around 47 per cent.

Traders can also consider a call spread by buying the May 240 call and selling the May 220 call. The probability of the trade being profitable works out to around 68 per cent.

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