Derivatives strategy by HDFC Securities: Buy Manappuram Finance Jan Futures

Stock price has broken out on the daily chart by closing above the resistance level of 181.5 to close at all time high with higher volumes

Bull Spread strategy on MANAPPURAM FINANCE

Buy Manappuram Finance January 185 Call at Rs 5.25 & simultaneously sell 200 call at Rs 1.25

Lot Size 6,000

Cost of the strategy Rs 4 (Rs 24,000 per strategy)

Maximum profit Rs 66,000 If Manappuram Finance closes at or above 200 on January expiry.

Break even Point Rs 189

Rationale:

-- Long build up is seen in the Manappuram Finance Futures’ where we have seen rise in the Open Interest with price moving up by 4%.

-- Stock price has broken out on the daily chart by closing above the resistance level of 181.5 to close at