F&O strategies for Infosys, BHEL: Shubham Agarwal

Check out a few F&O strategies from Shubham Agarwal of Motilal Oswal Securities

INFOSYS

Strategy: Call Ratio Spread

 
BUY 1 LOT NOV 1160 CE

SELL 2 LOTS NOV 1200 CE
 

Target Profit: Rs 4500

Stop Loss: RS 1700

 

Option Composition indicates expectation of  limited downside due to heavy Put writing. Along with it lack of shorts in futures indicates a Neutral to Bullish outlook. Hence a Call ratio spread is created to trade the view as it augurs well in case of time decay before an upward move

 

BHEL

Strategy: Put Ratio Spread
 
BUY 1 LOT NOV 180 PE

SELL 2 LOTS NOV 170 PE

 
Target Profit: Rs 4000

Stop Loss: Rs 1300

 

Stock is in a Short-Short unwinding cycle. Unwinding in Puts has created expectation of deeper cuts. Considering the drop already in place, there could be breather before further fall. Such an expectation can be traded with a Put Ratio Spread to counter Time Value decay in Premium  

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.

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