Derivative strategy on Bank Nifty from Motilal Oswal Securities

Here is Nifty derivative strategy by Sacchitanand Uttekar, Equity Technical Analyst  & PFA at Motilal Oswal Securities:

Option Strategy: Bank Nifty 29 Dec 2016 Ratio Call Spread

Buy: 19,000 CE 1 lot       

Sell: 19,500 CE 2 lots

Target: 6,000  

Stop Loss: 1,500        

Hedge: Above 19,800
 

Rationale:

1. Bank Nifty is in Short – Short Unwinding cycle.

2. Proximity to highest Put concentration (18000) raises expectation of pull back. Any Short covering in CE could provide momentum push

3. Since we are attempting to play a pullback it makes sense to keep downside limited. Thus Ratio Call Spread is recommended

Disclaimer: Motilal Oswal Securities ( MOSL ) is regulated by the Securities and Exchange Board of India ("SEBI") and is licensed to carry on the business of broking, depository services and related activities. MOSL is in the process of getting registered under SEBI - Research Analyst Regulations. MOSL, the spokesperson or his relatives, do not have financial interest in the securities mentioned above. The spokesperson has not served as a director, employee or officer at the subject company in the last 12 months. MOSL or its associate might be involved in market making for the subject company or have potential conflict of interest.

Sacchitanand Uttekar is an Equity Technical Analyst at Motilal Oswal Securities