Bull Spread strategy on Colgate Palmolive by Nandish Shah of HDFC Sec

The stock price of Colgate has broken out on the daily chart where it closes at all time high levels

Bull spread Strategy on COLGATE

Buy COLGATE 1760 CALL at Rs 29 & simultaneously sell 1800 CALL at Rs 17

Lot Size 350

Cost of the strategy Rs 12 (Rs 4200 per strategy)

Maximum profit Rs 9800 If Colgate closes at or above 1800 on 29 July expiry.

Breakeven Point Rs 1772

Rationale:
 

We have seen long build up in the Colgate Futures where we have seen 4 per cent (Prov) rise in the Open Interest with price rising by 1.3 per cent.

The stock price has broken out on the daily chart where it closes at all time high levels