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Bullish strategy de tunnel on Terra by the change de tendency
The information that provides the technical analysis to us can be very useful at the time de raising a strategy with derivatives, mainly when a change de tendency is detected.
At the time de making decisions it is important to follow you rule de investment that vary following the prdeile de the investor.
For example, for the strategy de this week, we are being based on the technical analysis and the annual graph de the chosen value, Terra Networks. This analysis indicates a change to us de direction, to the surpassed salary the important resistance de the 5 Euros and to break the bearish tendency de the line drawn up from the 22 de March de this year in 9,20 Euros and the 18 de July in 7,20 Euros.
While the quote de the company stays over the level de support de the 5.00 Euros, we see less risk the loss and only in the case de finding us below this level we would recommend to close this position and, in our particular case, to come to annul this risk.
The strategy
The value de this week, Terra, it is through what we developed to our strategy using the options de the market de derivatives. The chosen one for this week is going to be the denominated bullish tunnel.
We think that the quote de Terra in the date de victory, in our case we have chosen next the 21 de March de 2003, will be superior to 6.00 Euros. In case the forecasts are not exact, we covered ourselves underneath until the 5.00 Euros.
This strategy works like a bought future, reason why very it is adapted for this situation about which we thought that the tendency de Terra in means term is going to be bullish but, in addition, allows us to protect to us before falls de underlying de a little more 7.4%.
For the construction de the position we bought one call and we sell one put de Terra de price de exercise inferior. In our case, we bought call 6.00 de March to 0.49 Euros and sell put 5.00 de March to 0,47.
Consequently, for this strategy we would pay to a net premium de 2 Euros by each bullish tunnel (0.47 - 0.49) multiplying x 100).
The payment that requires this position is de little quantity, since we practically compensated in its totality the premium paid by call with the premium received by the sale de put. It is necessary to remember that we must deposit 106 Euros for guarantees.
Both premiums and the calculation de we took them to guarantees according to the prices from closing from MEFF from Thursday 28 from November.
Victory
Arrived the victory, if the price de Terra stays between 5 and 6 Euros stay the 2 paid Euros de net premium.
Over ours they break-even (6,02), point which we entered benefits, these, as with a bought future, are limitless and they increase as the price de the underlying one raises over the price de exercise de ours call.
Over 6.02 Euros 1 Euro by each tunnel and each penny de Euro will gain more that has raised the action.
Below 5, our losses will be increasing and no longer they will be limited the paid premium.
to occur this case, we could limit our risk the loss selling a future de Terra or using another product that could compensate our strategy like, for example, the sale de calls that would limit our zone de losses thanks to the displacement the loss de our deadlock to the victory.
The changes de volatileness and the passage de time practically do not affect our strategy, since we are buying and selling volatileness simultaneously in the same victory, which neutralizes the effect.
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