Derivative strategy on Nifty Bank by Motilal Oswal Securities

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 19,500/19,000 indicating support zone

 

Any unwinding in 20,000 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 : Above 21,350

 

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.