Derivative strategy on Nifty Bank by MOSL

Derivative strategy on Nifty Bank by Sacchitanand Uttekar, Equity Technical Analyst & PFA at MOSL:

Strategy:  Nifty Bank  (Ratio Call Spread)
 
Buy 20500 CE 23FEB’17 1 lot

Sell 21000 CE 23FEB’17 2 lots
 
Rationale:
 
Nifty Bank is in long-long Unwinding Cycle

Option data shows highest put concentration at 19500/19000 indicating support zone

Any unwinding in 20000 CE could lead to option trigger thereby fuelling the momentum towards 20,500-21,000

Considering falling volatility, Ratio Call Spread is recommended
 
Target: Rs 15,000 around 20,800

Initial Outflow: Rs 3,000

Hedge: