F&O strategies for Nifty, TCS

Nifty Hedge:

Buy 7800 PE

Sell 2 Lots 7500 PE

Buy 7200 PE

 

Target Profit: Rs 4500

Stop Loss: Rs 1000

Rationale:

Considering the increment in Call writing in Nifty in strikes as near as 7900 and upwards, it looks like we may see a halt in the up move. Considering relatively high implied volatility it makes sense to keep a hedge in place in case if Nifty reverts back from here



TCS Call Ratio

Buy 2600 CE

Sell 2 Lots 2700 CE


Target Profit: Rs 4000

Stop Loss : Rs 1500

Rationale:

TCS is placed near the lower end of the options indicated trading band. The stock has not added any significant longs but the futures open interest trend is not negative. Considering the lack of long evidence it makes sense to trade with prudence hence Call ratio spread could suit well.
 

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 and its associates have a financial interest in the securities mentioned above however they do not have actual/ beneficial ownership of 1% or more securities of the subjecct company at the end of Jan 2015. The spokesperson or his relatives, do not have a financial interest.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.

Shubham Agarwal is a head of Quantitative Research, Motilal Oswal Securities