Derivative strategy on Nifty by Motilal Oswal Securities

Derivative strategy on Nifty by Chandan Taparia, Derivatives & Technical Analyst at Motilal Oswal Securities:

NIFTY - BULL CALL SPREAD

BUY 1 LOT OF 10350 CALL @ 70

SELL 1 LOT OF 10450 CALL @ 30

BEP: 10390

MAX RISK: 40 POINTS (Rs. 3000/-)

MAX REWARD: 60 POINTS (Rs. 4500/-)

RATIONALE:

1) It has been holding the gains above 10300 strike

2) Fresh Put writing at 10300 strike could support the stock on decline

3) Intact Call writing at 10500 and 10400 could restrict its upside momentum

4) Thus a range bound, Bull Call Spread is recommended.

Disclaimer: The analyst may have positions in any or all the stocks mentioned above.