Options Pain Analysis - June

Analysis to interpret the Nifty closing price at the end of the contract using Option Pain. There are 5 trading days to expire and 7 days in all to expire. If you take a position now, that is, if you sell 4100 Put and 4400 Call (Nifty @ 4250 now)how much profit or loss you will make. According to Max Pain the nifty should end at or around 4300. The analysis is to find whether this strategy works out.

Proposed Position (taken on 18-Jun-09)

Sell 4100 Put Price – 42

Sell 4400 Call Price – 48

Nifty traded in the range of 4242 and 4313. Net profit is 90 points.

Thanks