F&O strategies for HDIL, BPCL

HDIL Long Put Butterfly

LONG PUT BUTTERFLY

BUY 55PE 1 LOT at 4.25

SELL 50PE 2 LOTS at 2.7

BUY 45PE 1 LOT at 1.5

Target Profit: Rs 2500

Max. Loss: 700

Rationale:

The stock is in short - short covering cycle.

Trading below the lower band opens up the immediate downside of about ~20%.

Considering the high volatility it makes sense to trade with a Put Butterfly.

 

BPCL OTM Bull Call Spread

BUY 880 CE 1 LOT

SELL 900 CE 1 LOT

Target Profit: Rs 6500

Stop Loss: Rs 3000

Rationale:

BPCL future still remains in Long-Long Unwinding cycle.

Heaviest Put still remains at 840 indicating expected floor around here.

Bargain hunting in 860 Call on Friday indicates bargain hunting attempts.

Considering the market set up it makes sense to be nimble footed and trade with OTM Bull Spread.

Shubham Agarwal is a head of Quantitative Research, Motilal Oswal Securities

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 and its associates have a financial interest in the securities mentioned above however they do not have actual/ beneficial ownership of 1% or more securities of the subjecct company at the end of Jan 2015.  The spokesperson or his relatives, do not have a  financial interest.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.