Options Pain Analysis - July

Analysis to interpret the Nifty closing price at the end of the July 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 4400 Put and 4600 Call (Nifty @ 4568 now)how much profit or loss you will make. According to Max Pain the nifty should end at or around 4400. The analysis is to find whether this strategy works out.

Difference in spot and pain was high so sold 4400 PE and 4600 CE.

Proposed Position (taken on 24-Jul-09)

Sell 4400 Put Price - 20

Sell 4600 Call Price – 60



Look how flat Nifty was... Range 4513 to 4572... my position was a risk one must have sold 4700 CE to be on safer side. But Nifty closed below 4600 and m profit was 80 points.



Thanks

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