RPL ratio spread Strategy:

Strategy:

Buy 1 Lot 180 CA RPL (May) @ INR 9.

Sell 1 lot 190 CA RPL (May) @ INR 5.4.
Sell 1 lot 200 CA RPL (May) @ INR 2.9.


This would result in a Net Outflow of INR .7 in premium or INR 1172 (.7 * 1675 being the lot size) per set of the strategy deployed.


The RISK:

If RPL moves below our break-even limits of 180.7 it would result in a loss of INR .7 in premium or INR 1172 (.7 * 1675 being the lot size) per set. If RPL moves above 209.3 it would result in a loss of INR 1675 per rupee gain the stock per set.

The reward:

The strategy would make money in the range when RPL remains in a range of INR 180.7 – 209.3 with maximum profits coming in at price Range of 190 to 199.3. The maximum profit here is INR 15575 per set


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