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Derivative strategy on Coal India by Motilal Oswal Securities

Maximum Put OI at 250 strike could support the stock

Chandan Taparia  |  Mumbai 

coal

Option strategy on by Chandan Taparia, Derivative & Technical Analyst at Motilal Oswal Securities:

Strategy:

- BULL CALL SPREAD

BUY 260 CALL
SELL COALINDIA 270 CALL
BEP : 263.50

MAX RISK : 3.50 POINTS (Rs.5950)
MAX REWARD : 6.50 POINTS (Rs.11050)

Rationale:

1) It has bottomed out after the weakness of last six months
2) Managed to hold above 250 zones
3) Given the highest daily close in last eight weeks
4) Call unwinding at 260 strike suggests an up move
5) Maximum Put OI at 250 strike could support the stock
6) Thus Bull Call Spread is recommended to trade the positive to range bound move

Disclaimer: The analyst may have positions in any or all the stocks mentioned above.

First Published: Tue, September 19 2017. 08:16 IST
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