Web exclusive: NTPC can witness some smart bounce back from lower levels

Check out the F&O trends and strategies for select stocks with Chetan Jain, Deputy Manager Derivatives Desk at Anand Rathi

Check out the F&O trends and strategies for select stocks such as NTPC, Hindalco, Ranbaxy and Zee with Chetan Jain, Deputy Manager Derivatives Desk at Anand Rathi:


SmartInvestor : Markets continue to remain weak for the third straight day. The Nifty has been hovering around 5,250-60 levels so far. What is your take on the benchmark for Dec futures expiry?

Chetan Jain : Nifty future after hitting the life high zone has entered into consolidation phase with sideways move being seen, however looking at the option concentration data 6200 should act as strong support zone and any dip till these levels can be taken as good buying opportunity. Option traders can simply go with plain vanilla call option buy of 6400 strike price around @30 with limited downside risk. PCR OI is sustaining above psychological one levels indicating that put writers are getting more aggressive as compared to call writers despite market falling suggesting comfort among put writers for no major downside for this series.
 

SmartInvestor : NTPC has been among the active stocks in the options segment today. What is your call on the stock for Dec options expiry?

Chetan Jain : NTPC can witness some smart bounce back from lower levels and to play the pullback we are advising Bull Call Spread strategy. NTPC : BULL CALL SPREAD : BUY NTPC 140 CALL @ 3.20 AND SELL NTPC 145 CALL @ 1.40 | BEP : 141.80 | MAX RISK : 1.80 (RS.3600 PER LOT) | MAX REWARD : 3.20 (RS. 6400 PER LOT) -- PLAY THE BOUNCE BACK MOVE WITH STRATGEY WITH LIMITED RISK..


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