F&O strategy: Bull Call Spread Strategy on M&M by HDFC Securities

The stock price of M&M has broken out on the daily chart where it closed at highest level since 22-Sept 2022

M&M draws aggressive 6-year plan for auto and farm equipment segments
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Nandish Shah Mumbai
BULL SPREAD Strategy on M&M
 
Buy M&M (24-Nov Expiry) 1,300 CALL at Rs 42 & simultaneously sell 1,340 CALL at Rs 25

Lot Size 700

Cost of the strategy Rs 17 (Rs 11900 per strategy)

Maximum profit: Rs 16,400 if M&M closes at or above 1,340 on 24 Nov expiry.
 
Breakeven Point: Rs 1,317
 
Approx margin required: Rs 43,000
 
Rationale:
  • We saw long build up in the M&M futures on Thursday, where we saw 45 per cent addition (Prov) in Open Interest with price rising by 1 per cent.
     
  • The stock price has broken out on the daily chart where it

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First Published: Oct 28 2022 | 7:48 AM IST

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