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Strategies For. Using Nifty Futures & Options. Arbitrage between Futures & Cash Market. Index Badla Strategy (Have money). Nifty Futures is quoting at a premium to Nifty BeES Sell December Nifty Futures at 1055.45 worth Rs.2,11,090 (200 Nifties)

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Strategies For

Using Nifty Futures & Options


Arbitrage between Futures & Cash Market

Index Badla Strategy (Have money)

  • 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 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 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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