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									Strategies For




           Using Nifty Futures & Options
        Arbitrage between Futures & Cash Market

Index Badla Strategy (Have money)

                             Nifty BeES Nifty Futures Dec 27th
    December 21, 2001        105.09       1055.45
    December 27, 2001        102.00       1020.00

  Nifty Futures is quoting at a premium to Nifty BeES
  Sell December Nifty Futures at 1055.45 worth Rs.2,11,090 (200
Nifties)
  Buy Nifty BeES worth @ 105.09 Rs.2,11,126 (2009 units)
  On Dec 27, 2001, expiration of Nifty contract, sell Nifty BeES at 102
and close Nifty Futures at 1020
  Payoff, Loss on spot (Rs.3.09*2009 = 6131), Gain on Futures
position (Rs.7090), Net Gain of Rs.959
        Arbitrage between Futures & Cash Market

Index Undha Badla (Own Nifty BeES)

                             Nifty BeES Nifty Futures Dec 27th
     December 21, 2001       105.09       1042.72
     December 27, 2001       102.00       1020.00
   Nifty Futures is quoting at a discount to Nifty BeES
   Buy December Nifty Futures at 1042.72 worth Rs.2,08,544 (200
 Nifties)
   BeES, Sell Nifty BeES @ Rs. 105.09 worth Rs.2,08,499 (1,984 units)
   On Dec 27, 2001, expiration of Nifty contract, buy Nifty BeES at 102
 and close Nifty Futures at 1020
   Payoff, Gain on spot (Rs.3.09*1984 = 6131), Loss on Futures position
 (Rs.4544), Net Gain of Rs.1587
         Arbitrage between Futures & Cash Market
Using Nifty BeES for Writing Covered Call Options
(Own Nifty BeES)
This strategy can be used to earn additional income from holding Nifty
BeES
                          Nifty BeES Nifty Options Dec 27th
 December 21, 2001        105.09       1060 @ 20 premium
 December 27, 2001        106.00       1060.00
 Nifty December European Options 1060 @ 20
 You hold 2000 Nifty BeES and don’t expect the price to move very
much.
 You sell 200 Nifty Options @ Rs.20 and receive Rs.4000 as premium
and take on an obligation to deliver 200 Nifties @ Rs.1060.
 Nifty Index closes at 1060, hence the option expires worthless

								
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