USDINR has broken its crucial resistance area of 50 last week and is continuously trading above. From these levels we expect that upside will continue in USDINR pair and on higher side it can test 51.50-51.70 levels in short term.
The strategy consists of buying 10 lot of USDINR 50.75 Call option Nov. at Rs0.3800 and selling 10 lots of USDINR 51.25 and 51.75 Call option at Rs0.1800 and 0.0800 respectively.
The premium outflow in this strategy would be Rs.0.1200. Initial outflow is estimated to be Rs1200 at the time of initiation of strategy.
Profit and Loss Matrix
Maximum profit of Rs3,800 if USDINR closes between 51.25 and 51.75 on expiry. However, one needs to hedge this strategy if pair goes above 52.1300 by buying 10 lots in futures.
Buy 10 lots of USDINR Nov. 50.75 Call around 0.3800
Sell 10 lots of USDINR Nov. 51.25 Call around 0.1800
Sell 10 lots of USDINR Nov. 51.75 Call around 0.0800
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Technical Project Manager - MSD, Singapore