DERIVATIVES

TERM PAPER
ON
INDIAN OIL CORPORATION(IOC)
STOCK

By
M. Abishek(131245)
Harjas(131313)
Salma Farooqui(131335)
Ramesh
Sachin

Indian Oil Corporation Ltd., established in the year 1959,

is a Large Cap company operating in Petroleum sector.
Indian Oil Corporation Limited is India's flagship national
oil company with business interests ranging from refining,
pipeline

transportation

and

marketing

of

petroleum

products to exploration & production of crude oil & gas.

The market capitalization of IOC Rs 80425.93 Cr.

The Company is the market leader, with an overall share

of (53.1%) among the PSUs.
In 2014 the Companys total income from operations
grew by 5.75 % to Rs. 4,88,344.93 Cr. as against Rs.
4,61,779.67 Cr. in 2013.
For the same period, net profit went up by 92.06 % to
Rs. 6,966.58 Cr. as against Rs. 3,627.30 Cr. in FY
2013.

FUNDAMENTAL ANALYSIS
BETA = 0.616
MARKET CAPITAL =RS. 80304.0CR

March 14

March 13

EPS

28.9

20.61

P/E

17.02

15.36

TECHNICAL ANALYSIS
The Relative Strength Index (RSI) is a momentum
oscillator that measures the speed and change of
price movements. RSI oscillates between zero and
100. Traditionally, and according to Wilder, RSI is
considered overbought when above 70 and oversold
when below 30.

By analyzing RSI, we generate following signals:

Overbought and Oversold Zones.
Bullish and Bearish Divergences.
Support-Resistance Zones.
In the chart ,IOCoversold and overbought levels are
shown. 65-70 RSI act as oversold levels, whereas 25-30
RSI act as overbought levels. We also see that 50-60
RSI levels act as resistance for IOC. For each stock,
Also note that, a stock can remain oversold in an
uptrend.

Price just got below it's 50-day simple moving average which is a
negative signal. Price just got below it's 20-day simple moving
average which is a negative signal. According to simple moving
average analysis, ioc is in a strong downtrend. Major resistance
levels are 337.2225, 338.702, 341.3595.

Price just got below it's 50-day simple moving average which is
a negative signal. Price just got below it's 20-day simple moving
average which is a negative signal. According to simple moving
average analysis, ioc is in a strong downtrend. Major resistance
levels are 337.2225, 338.702, 341.3595.

OPTION STRATEGIES USED

WHEN VIEWPOINT IS MODERATELY BULLISH
Short put
Covered Call
Bull Spread Strategy using call

Covered Call

Maximum Loss: Initial

Cost
Maximum gain: (K-S)+P
BEP: S-P

Bull Spread Strategy Using

Calls

Maximum Loss:
Unlimited
Maximum gain: Higher
K-lower k-cost
BEP: Lower K+Cost

ADVANTAGES & DISADVANTAGES OF

BULL CALL SPREAD
Advantages of Bull Call Spread
The loss is limited to initial investment.
If the share price fails to rise beyond the strike price of the outof-the-money sold call option, the profit yield will be greater
than just buying call options.
Disadvantages of Bull Call Spread
There will be no more profits possible if the share price rises
beyond the strike price of the sold out-of-the-money call option.

ADVANTAGES OF BULL CALL

SPREAD OVER COVERED CALL
The maximum potential
profi t for the bull call
spread is only slightly
lesser than the covered
call but the covered call
has a potentially
unlimited downside risk
Profi t potential when you
have a covered call
position is limited to the
strike price