How to play "Infosys results:? | Stocks and Commodities

July 14, 2016
Time: 9.10 am

How to play "Infosys results:?

1. Infosys results are due by 9.15 am tomorrow morning.
2. So there will be gap up or gap down in that counter based on the results.
3. Some people want to buy options in order to capture the trend.
4. What usually people will do, since they do not know in which direction markets will be moving, they will buy both Put and Call options.
5. Now by looking at the option prices, Infy looks very bullish.
6. Infy closed at 1192 yesterday but 1300 Call commanding more premium than 1100 Put.
7. Since last results in April, this counter is down by about 5%.
8. So the probability of Infy moving higher is high.
9. Now if any one wants to buy both 1200 Call and Put, the combined premium is Rs 78.
10. So you make profit only if Infy moves more than 6% on either direction.
11. In my opinion, that may be difficult.
12. Instead, I suggest the following method, but you can not do huge volume as you have to pay margin money.
13. I intend to buy one lot 1200 Call, sell one of 1240 Call and 1280 Call. 
14. In case, if Infy falls my loss will be only Rs 3 per share and Rs 1500 per lot.
15. In case if Infy trades between 1200 and 1280, which is highly likely, I will make very good profit.
16. But for this method, you need to pay margin money close to Rs 1 Lakh.