Options Strategies for a Range-bound Market

Options Strategies for a Range-bound Market
Case Code: FINC173
Case Length: 5 Pages
Period: 2019-2020
Pub Date: 2021
Teaching Note: Available
Price: Rs.200
Organization: Magnus Returns Private Limited
Industry: Financial Services
Countries: India
Themes: Financial Options & Derivatives
Options Strategies for a Range-bound Market
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case study brings out the alternatives available to Ritu, an MBA summer intern at Magnus Returns Private Limited (Magnus Returns), as she tries to study the Indian stock market before selecting option strategies for Surendra, a client of the company. Surendra wants to take a month-long position at the start of February 2020. Ritu has to submit a report to the portfolio managerswithin three days with a scenario analysis based on the three different scenarios given in the case study.

Issues

The case is structured to achieve the following teaching objectives:

  • Understand the difference between speculation using options and option strategies.
  • Understand the various option strategies that can be implemented in range-bound market conditions.
  • Learn how to select the best option strategy in the given market conditions.

Contents

Keywords

Option Strategies; Short Straddle; Short Strangle; Long Butterfly; Long Condor; Call; Put; Range-bound Market; Short-Term Investment Horizon; Derivative Strategy; Risk Management;Strike Price; Call Premium; Put Premium; Volatile Market

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