Option strategy for exporters with lock downside risk for March 2020

Abhishek Goenka IFA Global

The given strategy is beneficial for the exporters who want to lock downside risk while at the same time want to gain an upside participation upto a certain extent.

Risk reversal strategy for Exporter (April 2020 expiry)

Buy Put 75.00 strike @0.70

Sell Call 76.50 strike @0.60

Net premium to be paid 10 paise

Scenario analysis for month end expiry

Expiry below 75.00 = Rate locked 74.90
Expiry between 75.00 – 76.50 , Rate will be spot – premium paid (10 paise)
Eg: if expiry rate is 76.00, your outright rate will be (76.00-0.10) = 75.90
Expiry above 76.50= rate locked 76.40

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Author

Abhishek Goenka

IFA Global

Mr. Abhishek Goenka is the Founder and CEO of IFA Global. He pilots the IFA Global strategic direction with a focus on relentlessly improving the existing offerings while constantly searching for the next generation of business excellence.

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