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Here is a Bull Spread Strategy on Divi's Lab by Nandish Shah of HDFC Sec

Short covering was seen in the Divi's Lab Futures' where we have seen 1 per cent fall in the Open Interest with price rising by 3 per cent

The stock price of Divi's Lab has broken out on the daily chart with higher volumes
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The stock price of Divi's Lab has broken out on the daily chart with higher volumes

Nandish Shah Mumbai
Bull spread Strategy on Divi's Lab

Buy Divi's Lab Dec 3850 Call at Rs 105 & simultaneously sell Dec 4000 Call at Rs 53
 
Lot Size: 200 

Cost of the strategy: Rs 52 (Rs 10400 per strategy)

Maximum profit: Rs 19,600 if Divi's Lab closes at or above 4,000 till 31 Dec expiry.

Breakeven Point Rs 3,902

Rationale:

  • Short covering was seen in the Divi's Lab Futures' where we have seen 1 per cent fall in the Open Interest with price rising by 3 per cent.
     
  • The stock Price has broken out on the daily chart with higher volumes where it closed at all

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First Published: Dec 18 2020 | 7:20 AM IST

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