Wednesday, August 15, 2012

Accepting the loss


Tata motors didn’t show high volatile movements after the results. Overall, the results were positive however forex losses spoiled the party. There is much dependence on the international markets and they are lacking volumes in the domestic markets.

The stock corrected for two consecutive days however, yesterday there was a reversal.  PE 230 had shown some positive momentum earlier for two days, but now it has lost significant value due to the reversal in trend. There is some buying happening in TM, however CE 260 seems to be far a target. Therefore, the positions should be closed. The p/l stands at INR -2600.
Strangle strategy has a high range barrier to cross to yield profits and if the stock stuck in the range, it is better to exit. Don’t forget you are long on options and out of the money options have no intrinsic value, just the time value which one is losing every day.

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